Matt Pittinger, manager, energy & water advising at ENGIE Impact looks at the future of building performance standards.
Across the United States, building performance standards are taking shape and impacting commercial building owners and operators. The regulations look to reduce the carbon impact of the built environment, mandating that existing buildings meet GHG emissions-based performance targets. However, as the mandates continue to increase in volume, the varying requirements based on each jurisdiction creates a complex problem for the building owners and operators who oversee a nationwide building portfolio..
With 31% of U.S. emissions coming from buildings, these emerging state and local laws look to reduce municipality carbon emissions, and increase adoption of energy efficient technologies. This has resulted in more than 33 jurisdictions adopting, or planning to adopt, building performance standards in 2024.
There are actionable steps building owners can take now to stay on track compliance. Data collection, financial planning, and creating a maintenance plan to support continued progress are the foundational elements of any roadmap to guard against penalties, fines, or public disclosure of the building’s noncompliance. Each jurisdiction has different requirements, and for building owners, navigating a portfolio of various mandates requires a strategic roadmap to be compliant. Without it, building owners will face significant penalties and fines in the year ahead.
Prioritize data collection
Gathering whole building consumption data on how the building is currently performing is a necessary baseline requirement. With this information, comparisons can be made against industry benchmarks and standards to identify areas for improvement. These comparisons can be completed within ENERGY STAR Portfolio Manager, a go-to solution for businesses and building owners to measure and track energy consumption for reporting purposes.
Moving forward, energy audits or retro-commissioning are a required step for building owners in most jurisdictions, and must be repeated on a set cycle. These actions are a critical step to identify specific opportunities to improve efficiency. Additionally, they can help prioritize which measures should be implemented based on their impact to the building performance requirements.
Arrange a portfolio wide plan that makes financial sense
With the appropriate building data in hand, portfolio-wide planning can begin. Replacing equipment can be done over time, but determining which projects to tackle based on jurisdiction requirements can be difficult. Looking at priority jurisdictions and the regulation timelines alongside building data will allow for more strategic plans to come together that are financially responsible.
Developing a portfolio-wide approach requires budgeting , and collaboration with external partners can determine how to proceed in a manner that makes sense. Financing options, local incentives, and rebates may be available to building owners. The Inflation Reduction Act (IRA), for example, has allocated $1 billion to state and local governments to adopt traditional and innovative building energy codes. Applying for IRA grants is one avenue building owners can explore to increase the efficiency and resilience of their building. Identifying the eligibility requirements to fund the necessary improvements and communicating the timelines for expected ROI on those upgrades will allow for further stakeholder support.
Businesses will need to determine the operational procedures necessary to continue monitoring their energy use and emissions output and making improvements as needed. If operations at a facility change, this may necessitate a shift in implementation priorities to meet building performance standard goals.
Looking to the year ahead
Building performance standards continue to increase in adoption in jurisdictions across the country. The Institute for Market Transformation shows that more than fifty jurisdictions have either passed performance standards for buildings, or are at least committed to passing standards, as of July 2024.
Responsibility for compliance is ultimately on the building owner, and failure to comply puts companies at risk of steep penalties. Additionally, the risk for public disclosure of noncompliance can put reputational harm on the business. A lack of expertise on regulation or in-house support should not deter from initiating plans to get on track as we approach the new year.
Building a tangible roadmap for Building Performance Standard Compliance will not happen overnight. Many competing factors need to be thoroughly evaluated when prioritizing what work needs to be done.