The Sustainability Buzz

Trend Watch: Building Energy Benchmarking and Disclosure

Building Energy Benchmarking and DisclosureIt’s no secret that buildings are energy-hungry beasts.  They account for 40% of our total energy use in the U.S., making it pretty obvious that if we want to be serious about energy efficiency, we need to tackle our building stock.  According to the Department of Energy, our building energy consumption was 48% higher in 2009 than it was in 1980.  Clearly, we’re going in the wrong direction.

To combat this problem, five cities and two states have passed energy disclosure laws that require all buildings over a certain size make their energy consumption public.  Conventional wisdom holds that “you can’t manage what you can’t measure,” and these laws target the measurement piece of that adage.  The idea is that once you start measuring consumption, it will illuminate opportunities to upgrade systems, increase efficiency and control costs.  It’s a position that we whole heartedly support at iSpring.  It’s hard to make good decisions without adequate data.

These laws affect approximately 4 billion square feet of building space, which is more than three times the square footage of every Walmart, Target, Home Depot, Barnes & Noble and Costco in the U.S.  That may seem like a lot until you consider that the total amount of floorspace in the U.S. (as reported by the Energy Information Administration in 2003, the last time it surveyed commercial buildings) is 72 billion square feet.  It doesn’t take a rocket scientist to figure out that we’ve got a long way to go before everyone’s on board with energy disclosure.

There seems to be good reason to hop on the benchmarking bus.  A recently released study from the Institute for Market Transformation (IMT), an energy-efficiency and green building research, education and policy focused non-profit based in Washington, D.C., found that building owners, consumers and tenant businesses stand to reduce energy costs by more than $18 billion by 2020 if a national building energy rating disclosure policy were to be enacted.

It all makes sense to us.  Good measurement and reporting is key to reaping financial benefits from sustainability.  It also could be key to creating competitive advantage for those building owners who use the data to make energy-efficient building improvements.  After all, what business wouldn’t rather be in an efficient building than an inefficient one?  And if you’re looking to buy a building, wouldn’t you choose the one with lower operating costs?

It appears that this all makes sense to decision-makers in the Delaware Valley, too.  The Coalition for an Energy Efficient Philadelphia and Next Great City are making headway in pushing for Philadelphia to adopt energy benchmarking requirements.  When it happens, it’ll rank Philadelphia with New York City, Washington, D.C., Austin, Seattle and San Francisco, all of whom currently require commercial buildings to benchmark and disclose their energy consumption.  It’s not clear yet what platform they’ll be required to use for disclosure—or what size building will be the threshold for disclosure—but all current jurisdictions with policies have specified the use of EPA’s Portfolio Manager, an online energy management tool and benchmarking system that allows the user to track consumption across all buildings in their portfolio and compare to other similar buildings.

As usual, though, the devil will be in the details.  For many building owners and managers, tracking down the energy consumption data necessary to report out is difficult.  IMT reports that getting monthly consumption data from some multi-tenant buildings is nearly impossible because owners lack whole-building data access.  According to IMT, it’s the number one barrier to benchmarking, but some utility companies—not surprisingly, the ones in jurisdictions where energy disclosure laws are in place—are piloting solutions.

But with the national emphasis on energy efficiency in recent years, we think it’s only a matter of time before energy benchmarking and disclosure goes national.  Will you be ready?

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