Citywide Impacts of Building Energy Ratings

Amy Hou  |  April 12, 2018   |  Energy & Sustainability  


If a tree falls in a forest and no one is around to hear it, did it really fall? Who can say, but if a building energy rating falls and no one is around to notice it, it may as well have never happened. Someone needs to hold building managers accountable for their progress on energy efficiency grades (or lack thereof), which is why several U.S. cities have introduced a new energy rating system.

Emergence of Building Energy Rating Systems

Reporting on building energy usage is not a new concept. Several cities and states across the countryhave implemented ordinances that require large buildings to track and report on energy use. However, while building managers must report this data to the city, they aren’t required to make those numbers available to the public. To make the process more transparent, cities like Chicago and New York have created their own energy ratings.

In November of 2017, the Chicago City Council votedto create the Chicago Energy Rating System, the first of its kind in the nation. The system takes existing energy data, including ENERGY STAR 1-100 scores, and translates it into an energy efficiency grade between zero and four stars. That rating will then be posted in a prominent area on the building and shared with potential tenants and buyers.

Following Chicago’s example, New York City’s largest buildings will display an A-F letter grade at the entrance starting in 2020. F grades are given only to buildings that fail to comply with reporting benchmarking data. Such a public display of energy efficiency grades seems likely to spur investment in a competitive market. After all, who would want to sell or rent out a building with a D or F grade on its front door?

Present & Future Impact of Energy Efficiency Grades

That brings us to the impact of these ratings. Benchmarking ordinances have already proven to substantially enhance energy efficiency. Chicago’s largest buildings have collectively cut emissions by 20 percentover the past two years as a result of the city’s strict enforcement of benchmarking. Buildings over 50,000 square feet make up less than one percent of the city’s buildings but almost 20 percent of the city’s total emissions. “That’s more carbon emissions than every car, every truck, every bus and every van in the city, which is why we’ve been so strict in enforcing our benchmarking ordinance,” said Chris Wheat, Chicago’s chief sustainability officer.

“That’s more carbon emissions than every car, every truck, every bus and every van in the city, which is why we’ve been so strict in enforcing our benchmarking ordinance.”

Between 2016 and 2017, the median building ENERGY STAR score in Chicago increased by five percent to a score of 64, with five percent more buildings reporting on energy use as well. With the new building energy rating posted so prominently, the hope is that building managers will heighten their efforts to improve their ENERGY STAR scores. Buildings that have raised their scores within the past two years will receive an additional star, further incentivizing energy improvements.

Concerns Raised

As with any new rating system, there is reasonable concern that the scores could be manipulated or misrepresented. A Deakin University reviewof Australia’s green star ratings questioned whether rating tools were properly audited; if not, they were more likely to promote greenwashing than any real improvements.

Notably, NYC’s mandate does include an annual spot audit of benchmarking data, independently conducted by the Department of Buildings. As more cities begin to roll out similar programs, auditing will be a crucial part of ensuring that ratings are accurately representative.

The full impact of citywide energy rating systems remains to be seen, but the outlook is positive. If tenants and buyers pay attention to the new ratings, and city governments properly audit the data, then even the quietest energy efficiency efforts can truly be heard.

To learn more about navigating energy benchmarking compliance, check out our eBook.

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About Amy Hou

Amy Hou is a Marketing Manager at Urjanet, overseeing content and communications. She enjoys writing about the latest industry updates in sustainability, energy efficiency, and data innovation.