Leveraging energy efficiency to create asset value

The first phase of the Black Desert Resort near Zion National Park in Ivins, Utah, had a soft opening in October. This development phase of the 630-acre property features a resort hotel, spa, golf course, roughly 1,000 condos, and 190,000 square feet of commercial space, including shops and restaurants.

The sustainability-minded resort used Commercial Property Assessed Clean Energy, or C-PACE, financing for installing energy-efficient HVAC systems and insulation, earthquake mitigation and water conservation measures. 

“We wanted to develop the property in an environmentally sustainable and sensitive way, one the community would be proud of,” said Jon Day, CFO at Reef Capital Partners, the commercial real estate investment company that owns the resort. "The irrigation system and water storage were constructed with water conservation as the top priority, which is especially important in a desert like Utah. We built the system with industry-leading technology and materials, and the C-PACE money helped us.”

Managing partner Patrick Manning named some of the resort’s other sustainable features: It uses low-voltage power over ethernet, “running only 10 volts to lights, security cameras and door locks across the entire property,” he said. “C-PACE helped us accomplish that [and] our water conservation measures. Because of C-PACE, we were able to finance efforts that banks wouldn’t,” Manning said, describing the experience as “seamless.”

Petros PACE Finance, which provided the project with $153 million in C-PACE financing, called the Black Desert Resort “the largest single transaction in C-PACE history” when the deal closed in October 2022. The resort secured a 30-year agreement at a 7% interest rate and a 25-year amortization period, Day said.

C-PACE is gaining momentum as a way for commercial real estate owners and operators to fund sustainability upgrades, including retrofits and energy efficiency improvement projects. In the jurisdictions where it’s available, it’s an attractive option for facilities that are seeking long-term financing with lower monthly payments, said R-Zero CEO Jennifer Nuckles. 

Features of C-PACE financing

With C-PACE, building owners and operators can typically get long-term, fixed-rate, non-recourse financing for up to 30 years for real estate projects that increase energy or water efficiency, including retrofits, upgrades and renewable energy installations. Interest rates may start as low as 7%, according to Peachtree Group, an investment firm that says it has facilitated 91 C-PACE transactions totalling $925 million.

The financing offers other advantages as well. The mechanism “looks exactly like a tax assessment. There are no covenants [like] you’d find in normal mortgage loans. There’s no additional collateral,” said Mansoor Ghori, founder and CEO of Petros PACE Finance, which has funded C-PACE transactions in 17 states and Washington, D.C., according to its website. The maximum amount of C-PACE money a project can typically secure equals about 30% of the value of that building, Ghori said. 

Also notable is that repayment is attached to the building where energy efficiency improvements are being made, not to the property owner, according to a report from Patrick Dolan and Anna Lee, partners at Norton Rose Fulbright, which represented Petros in New York City’s first C-PACE financing transaction. That transaction, worth $89 million, was for energy efficiency improvements at a Wall Street-area building and was secured in 2021. 

C-PACE financing “has gone from a niche product to a fairly mainstream financing tool. You're now reaching an institutional client base that didn't exist before, and a lot of it is due to expansion of legislation and educational resources,” said Rafi Golberstein, CEO of Minneapolis-based PACE Loan Group, which provides C-PACE financing across the U.S. 

State progress and barriers

A state or local government must enable C-PACE financing via legislation and then launch a program to make it available in that jurisdiction. Washington, D.C., and 40 states have PACE-enabling legislation, and D.C. and more than 30 states have active C-PACE programs, according to the PACENation website. 

North Carolina is among the most recent states to approve C-PACE legislation, which it did in July, on the heels of Georgia and Idaho’s enactments earlier last year.

Minnesota signed a bill into law in May extending the maximum term for C-PACE financing from 20 years to 30 years and raising the loan-to-value ratio from 20% to 30%. The revision also broadened the scope of PACE-eligible projects to include building resiliency improvements and water conservation. The state’s program now finances energy projects that include fuel-switching, and it no longer requires eligible energy projects to lower net energy consumption provided greenhouse gas emissions are reduced, Golberstein said. 

The law also removed requirements that projects be cost-effective, Golberstein said. During a Minnesota House Climate and Energy Finance and Policy Committee meeting in March, Golberstein testified that the requirement had hindered electrification and decarbonization projects in the state. 

Maryland requires an amortization schedule of no more than 20 years, which makes the mechanism less financially attractive in the state, according to Chris Nevin, mid-Atlantic regional manager of institutional real estate at First National Bank. 

When considering C-PACE financing for a particular project, “It has to make good financial sense. C-PACE can provide an important boost for a hard-to-finance project or a borrower who is in a less solid equity position — but established developers who come to the table with a strong balance sheet may not see the same benefits,” Nevin said. “In fact, there could be situations where it ends up adding costs in the long run.” 

While states like Minnesota have made strides in expanding C-PACE, New York City has faced a more challenging path. The city established its C-PACE program under the Climate Mobilization Act in 2019, but the program has seen only three deals come to fruition since 2021, according to PACE Loan Group.

One hurdle had been the requirement that all projects achieve a savings-to-investment ratio, or SIR, of 1.0 or greater. That meant “the projected energy savings had to equal or exceed the investment cost” and “projects had to demonstrate a dollar of savings for every dollar of PACE money they sought,” said Laura Rapaport, founder and CEO of North Bridge, which provides C-PACE financing to institutional commercial real estate developers across the U.S. 

In August, however, the New York State Energy Research and Development Authority updated its state guidelines to eliminate the SIR requirement for certain projects, including new construction and major renovations that qualify for C-PACE, retrofits that will completely electrify a building and those that install HVAC, ventilation or water heating systems that meet certain efficiency standards. Those changes apply across New York state; the NYC Accelerator PACE Financing Program updated its guidelines in August to reflect these changes for New York City projects.

“The SIR requirement previously limited C-PACE adoption, as many projects struggled to demonstrate immediate cost parity,” Rapaport said. “We expect to see rapid expansion of C-PACE adoption in [New York City] with the elimination of the SIR barrier and the inclusion of new construction and major renovation projects.” 

C-PACE and multi-state projects

Despite the appeal of C-PACE financing, the state-by-state nature of C-PACE programs can give pause to building owners and developers managing portfolios across multiple states. “Every state has its own tax law,” Golberstein said. A company wanting to use it to retrofit properties in multiple states would need to secure financing in each state. 

“When we think about larger [real estate investment trusts] or regional property owners with portfolios in three or four states or markets, it’s about doing a small deal and giving it a run. And, if that works, you [replicate] it across the portfolio, where applicable,” Golberstein said.

Nuckles recommends that property owners with large portfolios conduct a portfolio-wide audit to identify properties that have the potential for the highest cost savings. “I'd tailor each C-PACE transaction to the specific needs of the properties within the portfolio. Improvements can also always be implemented in phases,” she said. “It behooves the hotelier who owns four properties, as they can approach it from a portfolio perspective and then go down to the individual property level. Owners and operators can be in a scenario where benefits outpace outlays in a particular year.” 

Golberstein emphasized the similarities of the state programs. “So, if you’ve done PACE in Tennessee, it’ll be oddly similar to doing PACE in Nebraska. There’ll be some slight nuances, but [at a] high level, it’s going to be the same process. So, the real question is whether you’re in a PACE-eligible state,” he said.

Jaime Del Álamo, head of ESG value & risk Americas at JLL, sees more differences, however. 

“C-PACE works at a more regional level, and conditions vary widely by state, with differing rules, provider availability and even qualification,” said Del Álamo, who is currently involved in a couple of C-PACE financing deals. “It’s an excellent financing alternative on an individual basis, but I don’t think it’s mature enough today to be able to advise one single owner in a national scheme and say, ‘OK, we can use C-PACE to finance X amount of properties distributed throughout the country,’ because there’s a lot of nuances today per market and even in [how] the market is performing.” 

Nuckles noted the long-term benefits that can come from C-PACE program-financed improvements, including lower maintenance and operational costs and reduced energy consumption. 

C-PACE is “adaptive and cost effective,” Nuckles said. “It’s a symbol of the evolution of the real estate industry, [which] is moving much more toward a sustainable future.”

Artificial intelligence could reduce energy consumption and carbon emissions in the building sector by approximately 8% by 2050, according to a peer-reviewed paper published in July by researchers at the Lawrence Berkeley National Laboratory.

Energy use is predicted to peak in 2040 under a business-as-usual scenario without AI implementation, which considers continued technology improvement and increased shares of highly efficient and net-zero buildings in new construction and retrofits.

Introducing AI to equipment, occupancy influence, control and operations and design and construction would shorten that peak to around 2035, the researchers say. When combined with energy policy and low-carbon generation, AI-driven energy use and carbon emission reductions could grow to 40% and 90% in 2050, respectively, compared with a business-as-usual scenario, according to the authors.

If there were no energy efficiency improvements or policy support, building energy consumption would keep increasing, according to the paper published in Nature Communications.

10% savings assumption

The research, which focused on medium-sized office buildings in the U.S., forecasts AI’s potential to reduce energy consumption and carbon emissions through six scenarios. These include a “frozen” scenario that uses current building efficiency as a baseline, two business-as-usual scenarios with and without adopting AI, and three policy-driven scenarios. 

The researchers, who say they operated on the assumption that AI could cut building costs by 10%, estimate that adopting AI could generate cost savings and revenue that account for over 10% of annual on-site energy costs. AI adoption, along with robotics and Internet of Things applications, can cut building costs by up to 20%, the researchers say. 

While adopting AI in a business-as-usual scenario can cut energy use and carbon emissions by about 8%, the potential for such reductions is even more pronounced when compared with the “frozen” scenario, where the market shares of baseline buildings, or buildings with average energy efficiency, high energy efficiency buildings and net-zero energy buildings remain unchanged from their proportions in 2020, all the way through to 2050, the study suggests. Through AI adoption, building energy use can decline by 21%, while carbon dioxide emissions would be 35% lower, compared with the “frozen” scenario, according to the results of the study.  

Meanwhile, major policy measures include the promotion of efficiency technologies, implementation of building codes and energy efficiency standards, incentives, subsidies, financial assistance and government-funded programs, the study says. 

These policies were constructed based on the pathway to the Long-Term Strategy of the United States, published in November 2021 by the U.S. State Department and the U.S. Executive Office of the President, the researchers say. That paper lays out a goal of 100% clean electricity by 2035 — a crucial foundation for net-zero greenhouse gas emissions no later than 2050. 

The policy scenario spans four pathways — reduced cost premium for highly energy-efficient or net-zero energy medium office buildings, an increase in the retrofit share of existing commercial buildings to boost their energy efficiency, an increase in the share of new commercial buildings that achieve net-zero status and an increase in the share of retrofitted commercial buildings that achieve net-zero status.

Adopting AI in the policy scenario can help reduce energy consumption and CO2 emissions by roughly 19% in 2050, compared with the policy scenario without AI, the LBNL researchers say. 

When paired with policy measures, AI could reduce energy consumption by approximately 40%, compared with the business-as-usual baseline and by about 50%, when compared with the “frozen” scenario, according to the paper. 

To achieve the carbon neutrality target, the low-emission power generation scenario also assumes a decrease in carbon emission from the 2020 level to zero emissions in 2050. Adding LEPG would help achieve a near zero-emission target in 2050, providing savings of 93% and 95% from the business-as-usual and frozen scenarios, respectively.

The International WELL Building Institute underscored AI’s potential impact on building energy consumption and emissions reductions in its AI Framework for Advancing Healthy Buildings, released June. In a case study examining AI applications in building management systems, IWBI said that by implementing digital twins and AI, operators can send live feeds of data from an entire building into a computational model of the building and then draw on AI to analyze that data. 

“By continuously analyzing these data from the digital twin, the AI element can automatically open or close doors and windows, or increase or decrease the strength of fans throughout a building,” the IWBI report said

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In today's fast-paced business environment, the financial and operational losses businesses incur by delaying energy efficiency improvements, the "cost of inaction," is more relevant than ever.

Energy efficiency projects cost money, that’s obvious. However, by taking advantage of utility incentives, you can significantly reduce initial capital outlay leading to shorter payback periods that make efficiency projects smart, long-term investments. There is, of course, still a clear cost associated with any energy efficiency upgrade you may pursue; however, delaying these projects costs money month over month, too.

Identifying inefficiencies

Imagine keeping your car running constantly, even when you aren’t driving. Much of the equipment at your facility works this way. Just like you’d be spending unnecessary amounts on your car, by not operating a facility efficiently, you are spending unnecessarily on energy usage, funding the utility instead of saving for your organization.

Calculating the cost of inaction

The cost of inaction refers to the period during which you could be paying a fraction of what you usually spend on energy but are instead overpaying to run inefficient building systems.

Calculating your known costs of inaction can demand careful thought, depending on your project type, available incentives and other factors. A trusted facility consultant who understands project design as well as available incentives, rebates and financing options is a valuable partner in your journey. They can guide your team to ensure your project's proper implementation and incentive capture. Once you’ve calculated the cost, you can determine how much money could be spent elsewhere in your facilities.

The other costs of waiting

The costs of waiting for energy efficiency projects are not always easily identified and can appear unpredictably, impacting your financial stability. One significant cost of inaction is the missed opportunity to take advantage of utility incentives and special funding programs. Delaying action means potentially losing out on these valuable incentives, which can significantly offset project costs.

Another critical cost is the potential fines from carbon emissions regulations and building performance standards. As legislation increasingly comes into effect at the city and state level, commercial buildings face strict deadlines for completing energy efficiency projects. Waiting too long can result in hefty fines, adding another layer to the cost of inaction. These legislative trends are emerging throughout the country, aiming to lower carbon footprints, which means businesses must act promptly to avoid penalties.

Given these unpredictable costs, the urgency to start efficiency projects is clear. Begin by determining your measurable costs of waiting to prioritize projects that offer significant savings and quick payback periods.

Achieving rapid ROI

While energy efficiency projects do have initial costs, these can be quickly offset through the compounded effect of lower overall energy usage and more efficient operations post-completion. Incentives can vary by state or region, but for those with favorable incentives, project paybacks can be less than 3 years. When actual annual savings, installed costs, utility incentives and project ROI are clearly defined, the initial investments can become much easier for your wary executive team to sign off on.

Real-world example: LED lighting

Imagine a building that spends $100,000 annually on lighting with outdated fixtures. Upgrading to LED lighting, which is 70% more efficient, could reduce lighting costs to $30,000 annually, saving $70,000 each year. Delaying this upgrade means losing over $5,800 every month, and waiting just three months would cost over $17,000 in unnecessary utility expenses. While the initial upgrade will incur costs and have a payback period, the potential savings can quickly offset these expenses. Depending on the project's scope and engineering, the savings could cover the costs within a few years or even sooner in some markets.

Where to start

Despite the clear benefits, many businesses remain hesitant to invest in energy efficiency projects due to concerns about the project's scope and integration with existing systems. A practical starting point is to focus on low-hanging fruit—holistic, no-cost, or low-cost options that require minimal alterations to current systems. Simple actions like reviewing your building automation system (BAS) settings to ensure optimal operation times can yield significant savings without any upfront costs. Similarly, minor lighting upgrades or adding occupancy sensors are low-cost solutions that can provide immediate benefits.

Partnering for success

Partnering with a trusted energy efficiency consultant who takes the time to understand your organization's needs, concerns and current capabilities is crucial. This approach ensures that projects are not just implemented but are part of a strategic roadmap to unlocking efficiencies.

Retrofitting buildings with low-energy and passive technologies can help the building sector achieve carbon neutrality, according to a research paper authored by eight researchers from Harvard University. Their study presents a two-year dataset on an ultra-low energy office building retrofitted from a pre-1940s house. 

The 356-square-meter building, known as HouseZero, features systems like automated natural ventilation, a ground-source heat pump and activated building systems, per the paper published in Scientific Data on Aug. 28. The building’s annual energy consumption dropped 5.7% from 38.5 kilowatt hours per square meter in the first year to 36.3 kWh/square meter in the second year.

With this high-fidelity dataset, users can enhance their understanding of how such integrated low-energy and passive building technologies operate in a real building and develop advanced methods and algorithms to improve the design and operation of these systems, the study suggests. 

Sensor-based data

While comprehensive datasets consisting of factors such as energy consumption, occupancy, HVAC operations and indoor environment have been proposed, a very limited number of datasets is reported for ultra-low energy buildings with low-energy and passive technologies, the researchers said.

HouseZero has four stories, including a ground-floor basement with a large conference room, a first floor with semi-open spaces and a second floor with an open workspace designed for 16 occupants, per the paper. The third floor has one laboratory designed to conduct room-scale experiments with a functionality that represents the building’s systems and operation, as well as the capability to experiment with different facade systems, the researchers said. 

The study focuses on data from 189 sensors and meters closely related to the building’s main operational performance. Outdoor sensors include two localized weather stations and nine facade temperature sensors on the building’s facades and measure key metrics such as air temperature, relative humidity, CO2 levels and facade temperatures. Indoor sensors monitor zone-level air temperature, CO2, relative humidity and slab temperature, while a net meter validated both photovoltaic production and loads, they said. 

IT loads were the most dominant energy users in both years, followed by heating and plug loads, the paper says. During summer, IT and plug loads contributed the most to total energy demand, while cooling and other loads remained stable. During winter, heating energy consumption was the highest and varied according to slab temperatures, with IT loads as the second largest contributor, the researchers said. 

Indoor CO2 levels followed a diurnal cycle, rising during office hours and peaking in the afternoon, indicating a correlation with occupancy. Relative humidity remained stable with minor fluctuations, potentially linked to the building’s occupancy patterns, according to the study.

While monthly PV production and solar radiation followed the same trend throughout 2023, a new inverter with higher efficiency installed in early 2023 contributed to improved PV efficiency, the study noted. 

The dataset “contributes to the development of sustainable building practices,” the researchers said. Their dataset, however, is tied to unique features of the HouseZero building such as its occupancy, design and construction materials, as well as local weather conditions and sensor-specific limitations, including their location and the accuracy of their readings, the researchers noted. They cautioned that these factors could limit the generalizability of the study’s findings to other contexts, including buildings with different designs or usage patterns.

Operators can improve indoor air quality while increasing energy efficiency, but they must be intentional about decision-making and operations to overcome barriers, according to specialists from ASHRAE, the U.S. Green Building Council and the International WELL Building Institute. 

To enhance indoor air quality without compromising on energy efficiency, operators must address barriers such as insufficient accountability, split incentives and complexities in existing buildings, Seema Bhangar, principal of healthy buildings and communities at USGBC, said during a National Institute of Building Sciences webinar. 

Intentional design, planning and minimum performance standards, alongside regular monitoring, verification and efforts to ensure buildings work as designed, can help operators overcome these challenges, according to Bhangar’s presentation.

Air quality focus

For many years, efforts to boost energy efficiency have taken precedence over improving indoor quality, causing negative impacts to indoor air quality, Bhangar said, noting a correlation between lower air change rates made in response to the 1970s energy crisis and the Sick Building Syndrome, a condition used to describe acute health- or comfort-related efforts related to time spent in the building. “During the COVID-19 [pandemic], we also saw the opposite,” Bhangar said. Although many people were isolated in quarantine during the pandemic, buildings were running at maximum ventilation round the clock, wasting energy, Bhangar said.

According to a 2022 ASHRAE analysis of the International WELL Building Standard, which measures and awards buildings based on principles of healthy design and operations, individual WELL building features can impact energy use at varying levels, with some features carrying an “energy penalty” that can increase energy use by about 9%. Other WELL features, however, can generate up to 11% in energy savings. Combining these ‘energy penalty features’ and ‘energy saving features’ could increase annual energy use by 53% to 78%, or yield 20% to 28% in potential energy savings, depending on the climate and implementation, Nathan Stodola, chief engineer at the International WELL Building Institute, said in another presentation. “So that’s where it comes in to pick the strategies that achieve your goals of improving human health while also being conscious about climate and energy,” Stodola said. 

Other strategies to improve IAQ while managing energy use include right-sizing outdoor air filters, implementing demand-controlled ventilation, adopting displacement ventilation and using ultraviolet irradiation to combat mold growth in central air handling units, per Stodola’s presentation. 

Many elements of “efficient indoor air quality” exist, including ways to benchmark and compare air quality, air cleaning and baseline sensor technologies, and performance paths to minimum IAQ standards, William Bahnfleth, professor at Pennsylvania State University and presidential fellow at ASHRAE, said during the seminar. 

However, “[we] don’t have an educated workforce and this is not simply having people who can install and maintain systems,” Bahnfleth said.  “It goes all the way back to … the engineer designing the building. What does the facility manager know about the importance of [indoor quality], so they can put the correct emphasis on it?”

Operators can meet and exceed required ventilation rates, providing acceptable indoor air quality standards without having to increase energy use, Bahnfleth said. “We have … as much consensus on the need to address air quality now as we’ve ever had, but I think it’s already fading from what I hear when we get outside of academic circles.”

“So we really need to act now if we're going to do something about it, or this moment will pass,” Bahnfleth added. Historically, indoor air quality requirements have only been changed at times of high public health concern, and there are currently no national standards for design “parallel to ASHRAE Standard 90.1 in the IECC” or regulations like the Clean Air Act for indoor air, according to Bahnfleth. 

“The most serious gap is a regulatory one,” Bahnfleth said. “We make buildings for the people who will inhabit them, not to save energy. And that is consistent with what the World Health Organization said a long time ago: that free access to air and water of acceptable quality is a fundamental human right.”

“An energy declaration without a declaration related to the indoor environment makes no sense,” said Bahnfleth, quoting former ASHRAE president Bjarne Olesen, who is professor emeritus at the Department of Environmental and Resource Engineering at DTU Sustain.

Energy efficiency rules the U.S. Department of Energy finalized last year are expected to save almost $1.9 billion a year on home and business utility bills, the agency estimates.

The rules include requirements for commercial rooftop heating and cooling units, circulator pumps, dishwashers and miscellaneous refrigeration appliances, such as wine coolers. 

The standards for circulator pumps and commercial unitary air conditioners and heat pumps reflect recommendations from a federal advisory committee that includes manufacturers, utility representatives and consumer advocates. The standards for dishwashers and miscellaneous refrigeration products reflect a joint recommendation from stakeholders including the Association of Home Appliance Manufacturers, Consumer Federation of America and energy efficiency advocates.

Over 30 years, the updated standards will save Americans an estimated $33 billion on their energy and water bills, DOE said.

“Consumer, environmental and efficiency advocates came together with manufacturers of each of these products to recommend the strong standards,” said Andrew deLaski, executive director of the Appliance Standards Awareness Project.

Standards for commercial rooftop heating and cooling units will take effect beginning in 2029, resulting in energy savings of about 10% relative to products currently on the market, DOE said. For circulator pumps, compliance begins in 2028 and is expected to result in about a 33% energy savings.

Dishwasher efficiency rules will go into effect in 2027 and are expected to generate about 3% energy savings over current products. Rules for miscellaneous refrigeration products go into effect in 2029 and will represent savings of about 26%.

The new efficiency standards for dishwashers “are a significant victory for both consumers and the environment,” Courtney Griffin, director of consumer product safety at the Consumer Federation of America, said in a statement. “The standards require simple changes that will positively impact most households.” 

DOE has issued multiple final energy efficiency rules in recent months, as the Biden administration looks to complete Congressionally-mandated reviews through DOE’s  Appliance and Equipment Standards Program, which is generally required to review efficiency standards for a broad range of products every six years.

On Friday, DOE finalized new energy efficiency standards for the most common types of light bulbs. Earlier this month, DOE finalized new energy efficiency requirements for distribution transformers. In September, it finalized rules for residential gas furnaces.

“The department is catching up on overdue standards, and it needs to keep up that momentum the rest of the year to reach its targets for saving energy,” deLaski said. 

When ASHRAE released a new edition of its energy efficiency standard for existing buildings last year, it expanded its focus on building decarbonization. 

Updates in Standard 100-2024, the Energy and Emissions Building Performance Standard for Existing Buildings, include new metrics for setting greenhouse gas emissions targets, requirements to establish energy management plans and achieve energy and emissions performance goals, and a “simple compliance mechanism” for energy-efficient and low-emission buildings, ASHRAE said in a press release.  The updates align with expanding commitments by U.S. cities and states to implement benchmarking and building performance standards and to mandate energy and emissions reductions in existing buildings. 

U.S. municipalities commonly adopt the professional society’s standards as part of their building and energy codes. The new updates to Standard 100, last revised in 2017, come as building owners and operators face growing pressures to decarbonize their buildings. 

Historically, once buildings were constructed, there was no obligation to make them better, even when new building energy codes and standards were adopted. That is changing, however, as cities and states continue to mandate energy and emissions benchmarking and building performance standards, according to Marshall Duer-Balkind, director of policy programs at the Institute for Market Transformation. 

As of late 2023, “12 local and state governments have passed building performance standards that specify a minimum level of energy/climate performance for all buildings over a certain size, with fixed deadlines over the next three to 10 years. The National Building Performance Standards Coalition has more than 40 jurisdictions signed on to pass similar policies,” Duer-Balkind said in a Jan. 2 article in Smart Cities Dive. 

Standard 100 could play a role in those regulations as states integrate the standard into their own legislation and reporting frameworks. Prior to this update, ASHRAE partnered with Washington state to build a custom version of Standard 100-2018 that incorporated state-specific changes meant to facilitate an early adoption pathway for building owners and facilities managers. That custom standard, published in July 2021, followed Washington’s passage of the country’s first statewide building performance standards in 2019. 

In addition to meeting state and local mandates, building operators across the country are reducing their energy consumption and implementing renewable energy to attract tenants, satisfy occupier demands and command green premiums for commercial office space. 

“​​As the demand grows for reduced energy use and carbon emission in existing [buildings], there has been heightened interest in Standard 100 within the past year for its potential to shape building regulations on an expanded level,” ASHRAE President Ginger Scoggins said in the release. “The development of this revised standard underscores our commitment to advancing sustainability measures and responding to the evolving needs of the industry.”