Improving energy performance in commercial buildings is a sound business strategy. Organizations that improve energy management reduce operating expenses, improve tenant satisfaction, increase the asset value of their portfolios and demonstrate their commitment to the environment. For real estate practitioners committed to enhancing their properties’ competitiveness, energy benchmarking is a clear strategy for working towards that goal.
Business executives regularly use benchmarks to compare their companies and properties to their peers, the industry and their own performance over time. Until relatively recently, there wasn’t a standard benchmark for the single largest, controllable operating expense – energy – for commercial real estate practitioners. Now, with the help of the U.S. Environmental Protection Agency (EPA)’s ENERGY STAR© program and BOMA International, the benefits of benchmarking energy performance are widely available and relatively easy to measure. Benchmarking energy consumption in commercial real estate allows you to measure your performance, make informed decisions and track progress.
The EPA’s ENERGY STAR program offers easy-to-use tools and guidelines that can help building owners and managers realize significant energy and dollar savings. Portfolio Manager, www.energystar.gov/benchmark, the industry standard for benchmarking, is a free tool that can help you take control of energy consumption and costs. It provides a platform to track energy use in individual buildings and across a portfolio in a secure online environment. To date, more than four billion square feet has been benchmarked using this system.
Using Portfolio Manager
EPA’s system requires minimal inputs to generate a rating between one and 100 that can be used to establish a baseline for energy performance, and over time, to measure and verify improvements. The rating normalizes for variables such as local climate and space use, using an extensive data set from sources such as the EPA, the National Oceanic and Atmospheric Administration and the Department of Energy. To receive a rating, buildings must meet the general eligibility requirements, such as a minimum facility size of 5,000 square feet.
To begin benchmarking, access Portfolio Manager from the ENERGY STAR Web site, www.energystar.gov. Refer to the additional resources for further Portfolio Manager training.
Information Required for Benchmarking with Portfolio Manager at www.energystar.gov
- Address
- Year built
- How space is used (e.g., office space and computer data centers)
- Gross square footage
- Operating hours
- Occupant density
- Number of computers
- Vacancy
- 12 consecutive months of energy consumption and cost data for all fuel sources (e.g., electricity and natural gas)
Interpreting Your Results
The energy performance rating you receive through Portfolio Manager is an important performance metric upon which you can base decisions about investments in performance improvements. Buildings that rate between one and 25 have the greatest potential for financial and environmental savings. Cost-effective strategies might include combining low-cost performance strategies (e.g., using computer power management software and switching to ENERGY STAR-qualified lighting) with investments in new equipment to aggressively improve these properties. Buildings with ratings between 25 and 74 will also be able to achieve significant savings with low-cost measures. Additionally, apply best practices and lessons learned from high-performing properties with a rating between 75 and 100 to help lower performers improve.
In addition to helping you prioritize improvements and upgrades, the energy performance rating is also useful in building transactions. Similar to using the miles-per-gallon rating to understand a car’s fuel efficiency when making purchasing decisions, you can use the energy performance rating to help you make decisions about buying and selling buildings and leasing space. Portfolio Manager generates the Statement of Energy Performance (SEP) for each benchmarked property, which can be used as a transactional document. It contains the building’s energy performance rating, as well as other easily understandable and comparable metrics, enabling you to track energy savings and track carbon reductions. The SEP is also useful as a management report and for communicating performance results to tenants, owners and other stakeholders.
Gaining Recognition for Success
Properties that receive a rating of 75 or higher are performing in the top 25 percent of the nation, and are eligible to apply for the prestigious ENERGY STAR. The ENERGY STAR distinguishes your facility as exhibiting superior energy performance and demonstrates your company’s commitment to the environment.
To date, more than 3,200 top-performing buildings have earned the ENERGY STAR for powerful cuts to their energy usage. These award-winning buildings represent almost 575 million square feet, save an estimated $600 million annually with lowered energy bills, and prevent almost 11 billion pounds of greenhouse gas emissions per year – equal to emissions from almost 900,000 vehicles.
In addition, BOMA International recognizes top performing properties through the prestigious annual Earth Award, which recognizes excellence in environmentally-sound office building management. The best way to be recognized for your success is by sharing your benchmarked properties with the BOMA International Master Account in Portfolio Manager. For more details, see the instructions below.
Sharing Your Benchmarking Data with BOMA International
- On the “My Portfolio” page, click “Share Facilities”
- Choose the master account called “BOMA International-BOMABEEP”
- Give the account read-only access
- Select all facilities to share
Committing to Continuous Improvement
Benchmarking is just the beginning of a successful energy management program. Once you have a rating, it is important to set goals for continuous improvement and consistently update energy usage and space data. The “Set Energy Performance Target” feature in Portfolio Manager allows you to set either a target rating or percentage reduction in energy use and monitor your progress toward your targets.
ENERGY STAR offers a wealth of other resources to help you reach your performance goals, such as the Guidelines for Energy Management, Partners in Practice (which highlights industry leaders’ strategies and successes), an Energy Program Assessment Matrix and information on ENERGY STAR-qualified products. Additionally, ENERGY STAR’s Target Finder allows you to establish targets for design projects and major renovations by estimating a building’s projected energy consumption.
Focusing on energy performance benefits your bottom line and the environment. You can improve tenant and owner satisfaction by decreasing operating expenses, differentiate your company and properties from competitors and increase your net operating income and asset value. Simultaneously, you will help combat global warming by reducing energy consumption and associated pollution. Benchmarking is a vital step to reaping these benefits – it helps you understand how your facilities have performed in the past, and set targets for future performance.
Benchmarking Resources
EPA’s Portfolio Manager online training
- go to energystar.gov
- click on “buildings and plants”
- click on “online training”
Benchmarking Starter Kit and Quick Reference Guide
- go to energystar.gov
- click on “buildings and plants”
- click on “commercial real estate”
- click on “building benchmarking starter kit”
“Contact Us” in Portfolio Manager, energystar.gov/benchmark for fast, online help
BOMA Energy Efficiency Program (BEEP)
boma.org/TrainingAndEducation
The Green Resource Energy and the Environment Network (The G.R.E.E.N)
boma.org/AboutBOMA/TheGREEN
About the author: Deborah Cloutier is a principal and co-founder of JDM Associates, LLC and has 15 years of experience providing consulting services in the areas of commercial real estate, energy management, and environmental consulting. She has supported EPA’s ENERGY STAR since its inception and assisted BOMA in developing the BOMA Energy Efficiency Program (BEEP). She can be reached at dcloutier@jdmgmt.com.
