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ENERGY STAR is Good for Business

Published: Mar 16, 2017 Blog Post

Each year, U.S. businesses and consumers spend more than $400 billion on powering our buildings, with up to 30 percent of that energy and money wasted on inefficiency. In some cities, the poorest performing buildings can consume up to seven times the energy of the highest performing buildings for the exact same use.  As a result, improving building energy use should be top of mind for businesses and real estate pros across the country. In many cases, however, it is shocking how little is known about these structures. The U.S. Environmental Protection Agency’s (EPA) ENERGY STAR program is an unbiased program that bridges this gap by providing technically sound performance data for a wide range of buildings.

President Trump’s 2018 budget blueprint includes the elimination of the widely supported ENERGY STAR program. While critics argue that ENERGY STAR’s benefits should not require federal participation, the government’s oversight ensures that the program and its tool are unbiased. More than 450,000 commercial properties are working with ENERGY STAR to make their buildings more efficient—a resounding vote of confidence for the Federal government’s stewardship. Removing this popular program from the federal portfolio would potentially compromise critical information that businesses across the country depend on to capture the many benefits of energy-efficient buildings.

From skyscrapers in New York to retail stores in Texas, the building owners, tenants, cities, utilities, and energy service providers we work with employ ENERGY STAR’s critical foundational data about building energy and water use to make more-informed investments. ENERGY STAR’s Portfolio Manager, a free online tool, provides a standard, trusted mechanism through which building owners can not only understand how their property is performing compared to its peers, but also can track return on investment for energy-saving initiatives. A 2012 study by the Rockefeller Foundation showed an investment potential of $279 billion with energy-bill savings of more than $1 trillion over 10 years.

ENERGY STAR reports that most organizations can achieve annual energy savings of 2 to 10 percent through better energy management, and from 1995-2005, the program saved commercial building owners and tenants over $3.8 billion in energy costs. The recognition offered by the ENERGY STAR certification increases these financial gains. Independent studies have shown that ENERGY STAR-certified buildings (which have an ENERGY STAR score of 75 on a 1-100 scale, signifying that they perform better than 75 percent of their peers) typically have lower operating costs, command higher rental rates, have increased asset value, and lease faster than non-certified peer buildings.

The energy and water use data gathered via ENERGY STAR benefits more than owners and tenants. A low ENERGY STAR score generated through Portfolio Manager can motivate building owners and tenants to improve their property’s performance, thus generating more demand for energy-efficient products and efficiency services. ENERGY STAR scores also allow cities and utilities to better focus their efficiency programs on buildings that need the most help.

Consumers benefit from efficient buildings, too. Sharing ENERGY STAR data allows tenants to better factor in the true operating costs of a space into their leasing decisions, increasing properties’ competitive value. Then there are the non-energy benefits of efficient buildings. CBRE and the University of San Diego surveyed managers of companies who had moved from standard buildings into more-efficient buildings (as qualified by an ENERGY STAR label or LEED certification). Of the respondents, 42.5 percent reported that employees were more productive after the move, and 45 percent agreed that employees were taking fewer sick days. In addition, 15 to 25 percent of respondents perceived higher employee morale, less turnover, and greater ease of recruitment in the energy-efficient buildings.

All of these benefits are in addition to the vast environmental gains associated with energy-efficient buildings. Buildings that consistently track their energy use in Portfolio Manager have reduced their emissions by over 1.8 million metric tons every year, equivalent to the emissions generated by driving 380,000 cars for a year.

Buildings remain the country’s largest energy users. Fortunately, we have the knowledge and technology needed to make our buildings vastly more efficient. Well-known and trusted, ENERGY STAR is an industry-supported platform that puts this knowledge and technology to work.

This blog post also appears on The Huffington Post.