Building Energy Ratings: Driving the Market Toward Efficiency
What if someone buying or leasing a commercial building could see an energy rating, like the miles-per-gallon sticker on a new car, or the energy-cost label on a new appliance? Would that encourage prospective buyers to consider energy costs more seriously? Would it encourage owners to make their buildings more efficient? Andrew Burr thinks so.
As director of the Building Energy Rating Program for Institute for Market Transformation, Burr provides technical guidance to policymakers and government agencies, outreach to stakeholders in the real estate and utility sectors, and advocacy for legislative and regulatory policy on building ratings and disclosure. He has presented on building labeling policy in the United States, Europe and China, and is a member of the International Code Council.
In this podcast interview with the Institute for Building Efficiency’s Craig Isakow, Program Director of Global Energy & Sustainability at Johnson Controls, Burr spoke about energy ratings policies. Following is a summary of the interview, or listen to the full podcast.
IMT works on in broad areas to promote energy-efficient buildings.
Burr: We do a lot of work on building codes. We are the United States for a new ClimateWorks Foundation project called the Global Buildings Performance Network. That project is looking into energy code compliance and enforcement, which is a big issue all over the world. We do a lot with energy efficiency financing, seeking ways to encourage the flow of capital toward energy retrofits.
Building energy ratings and disclosure are simple tools, not yet applied widely.
Burr: Rating and disclosure policy is an effort to help get building performance information to key stakeholders, including operators and owners of buildings and consumers of buildings – tenants, investors and banks. Right now, very little of that information is available to consumers. Rating and disclosure policies require owners of buildings to compare the performance of their properties in the same way that you have an MPG sticker on your car. A lot of governments that have these policies use the U.S. EPA ENERGY STAR ratings. More than 20 billion square feet of U.S. commercial real estate has measured energy performance using the ENERGY STAR tool. However, that’s a very small percentage of the total stock.
IMT helps governments develop and implement rating and disclosure policies.
Burr: Over the last five years, a number of cities and states have enacted policies, many of which start phasing in this year. Those places include New York City, Seattle, San Francisco, Austin (Texas), Washington D.C., and the states of Washington and California.
New York City’s rating and disclosure policy appears to be creating green jobs.
Burr: The New York policy went into effect on August 1. There are 26,000 buildings in the city that have to comply. The story we are hearing from small businesses is that policy is driving a lot of new business. We talked to one firm that has doubled its payroll and added 400 clients in the last 12 months, all as a result of the policy.
IMT is promoting the sharing of best practices on ratings and disclosure.
Burr: In fall 2010, we convened all the jurisdictions that are implementing policies and asked them, “What are your challenges? How do we move forward in the most efficient way?” Ten states and cities were represented in that meeting. Our report compiles the knowledge and best practices from all these jurisdictions, and we hope other entities looking at ratings and disclosure policies can use that as a framework to create sound policies that save energy and create jobs.
Rating and disclosure policies are gaining traction around the world.
Burr: These policies have been place for quite some time in many countries. Europe enacted policies in 2003 covering all 27 member states, requiring building energy certificates and the display of energy performance when a building is sold or leased. Australia in 2010 enacted a policy requiring rating and disclosure for commercial buildings. China last year enacted a rating system that’s mandatory for government buildings and some of private stock. I think we are catching up a little bit here in the United States.
Government buildings are the best place to start with energy rating policies.
Burr: When we talk with states, we always recommend they do these measures for their own buildings before they require them for any private building. What’s good for government should be good for the private sector. The District of Columbia recently rated all of its building stock, and the results were not very good: the buildings are much less efficient than the average building across the country. But they issued a press statement basically saying: “We now know our buildings are poor performers. It’s time for us to be accountable to district taxpayers, and we are making a commitment today to increase the efficiency of our buildings and save money in the right way.” And that’s a great message.
More states and cities are likely to explore rating and disclosure policies as those already in place achieve results.
Burr: We are seeing a lot of momentum across the country for this type of policy. It’s a market-based policy. It’s feeding market players the information they need to encourage energy efficiency in buildings, and we think that’s the right type of policy for out times.
NOTE: The Institute for Market Transformation and the Natural Resources Defense Council sponsor a website on energy performance rating and disclosure at www.buildingrating.org.