Building Energy Benchmarking and Disclosure

Local Market
Energy Efficiency

Challenge: Improving energy efficiency offers significant cost savings for building owners/operators and critical emissions reductions, but limited data on building energy use and savings potential may discourage energy efficiency efforts.

Solution: State and local leaders should consider establishing an energy benchmarking and disclosure policy that requires building owners/operators to track and publish specific performance data. By emphasizing transparency in energy use and illuminating savings opportunities, this policy can encourage efficiency upgrades at low cost to the state or municipality and lay the groundwork for friendly “race to the top” rivalries among building owners and communities.

Example: In 2013, Minneapolis became the first city in the Midwest to pass an ordinance requiring public and private commercial buildings to benchmark and disclose their energy usage. The city publishes the buildings’ energy ratings on its website, using transparency to encourage building owners to cut energy consumption. To further incentivize efficiency projects, Minneapolis launched the Building Energy Challenge in 2015, which challenges individual buildings to cut their GHG emissions by 15 percent by 2020. Buildings enrolled in the challenge receive recognition and are eligible to compete for annual awards. Consistently benchmarked buildings demonstrated a 3 percent reduction in weather-normalized energy use intensity from 2012 through 2016 in the public sector and a 3.4 percent reduction between 2014 and 2016 in the private sector.

Example: Atlanta passed the Commercial Buildings Energy Efficiency Ordinance in April 2015, becoming the first city in the Southeast to implement energy reduction targets for commercial buildings. The ordinance requires energy performance monitoring and reporting for all commercial buildings over 25,000 square feet, accounting for 2,350 buildings and 80 percent of the commercial sector. The city estimates that the policy will help create 1,000 jobs each year initially and reduce commercial energy use by 20 percent by 2030. The policy is also expected to cut 2013 carbon emissions levels in half by 2030.

Example: Demonstrating success abroad, Australia’s commercial building disclosure program stimulated cumulative net benefits from reduced energy use amounting to $44 million in value between 2010 and 2014 and potentially up to $168 million when adding in workforce productivity gains.