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Energy Audits and Disclosures–New Law (1 Comment)

Entry by JoeDerhake

When you buy a car, the fuel efficiency is on the window.  Well, in California starting January 1, 2010 the same will be required of buildings. California commercial buildings will be benchmarked by the Energy Star Standards as required by California Law, Assembly Bill 1103.    After January 1, 2010 building owners will be required to disclose the building’s energy efficiency rating to buyers, lessees, and lenders.

Commercial building owners are mandated to participate in the Federal Energy Star’s Portfolio Manager program.  Energy Star has been around since 1992 and is a well recognized brand that is seen on anything from kitchen appliances to HVAC equipment.   Energy Star rates buildings on a scale from 1 to 100.  The scale rates the building against buildings within its class.  The rating system adjusts for climate and occupancy.   Buildings within the top quartile are eligible to be recognized as an EPA Energy Star Building and can use the “ENERGY STAR Label” to communicate its energy efficiency to tenants, lenders, and other stakeholders. 

The benchmarking data will show the building’s relative energy consumption performance compared to similar buildings within its class.  These data will be available online on a monthly basis to building owners and their utility companies. 

Property owners will be burdened with disclosure requirements, but can also benefit from ananlysis of the energy usage data.  For energy efficient buildings, the property owners will be more likely able to capture a “Green Premium” when the property sells or rents.  These data will yield opportunities of energy savings and ultimately improvement of net operating income.  If the property is in the top 25% of similar buildings on a national basis, then the building can be recognized as an Energy Star Building.  Receiving Energy Star recognition is a good way to communicate to tenants, buyers, and lenders that the building is an efficient building.