A1 Energy

Year End Energy Benchmarking Update

11.20.18 09:45 AM By Jon

It doesn't matter if the economy is boom or bust. It doesn't matter if you are renting, selling or buying and it doesn't matter if your area of interest is commercial, residential or both. The harsh truth is that the real estate game is unforgiving and you need to leverage every advantage that you can find.

As energy costs have risen steadily across all markets, one area of particular interest is in energy efficiency. For savvy business people, energy efficiency not only equates to immediate financial savings but it is also a sign of quality construction with proper fit and finish and of older buildings being properly maintained.

Proving Energy Efficiency

The national standard for establishing your property or properties as being energy efficient structures is with EPA ENERGY STAR certifications. The EPA ENERGY STAR Portfolio Manager allows you to track the energy consumption, water use and the emission of greenhouse gases in your entire portfolio and is relatively simple to use.

Getting Started with Energy Star

The first thing you will need to do is to create EPA Energy Star account. You will be asked for some basic information; nothing too intrusive and then asked to input the water and energy data for your property(s). If you don't have the information at hand, no worries, it is simply to gather either from your files or your utility companies.

As soon as the data is entered you will see your score. Your building(s) will be rated on a scale of 1-100 with the higher scores being the best. You will need to score a 75 or better to receive an Energy Star certificate. This tells any potential investors, tenants or buyers that the property is in the top 25 percent of buildings in North America in terms of energy efficiency.

The system is designed to compensate for factors such as operating conditions, regional weather data, and other important considerations like local energy costs. So, it places your buildings on a level playing field regardless of its location.

Falling short at first is not unusual. Part of the beauty of the program is that it shows you the areas that need improving in order to meet the 75 percent goal. This allows you to develop a plan that focuses your time and efforts on the key areas that need improvement without the risk of wasting valuable resources.

Why Bother

You may ask yourself, why getting an EPA Energy Star certificate for your property is worth the effort. Consider these facts.

  • Studies have shown that Energy Star rated properties have an average operating cost that is of 35 percent less than those without a rating. Whether this entirely due to the nature of the buildings or heightened energy awareness hasn't been determined but even if you are just maintaining the property for your own use it is a financial boom.
  • If you are looking to rent out or lease your property it being Energy Star certified means you can demand higher rates due the monthly saving your building offers over other options. It also offers the potential for higher occupancy rates.
  • If you are selling your property an Energy Star rating increases its attractiveness to potential buyers and gives you a strong negotiation point when writing the contracts.

When Buying Property

When buying a property, it already having an Energy Star rating makes it more valuable and increases its earning potential. If it doesn't have a rating but appears to be one that could be easily raised to standards it can provide instant equity with minimal effort. This can make the property a financial boom and more attractive to potential outside investors.

Why 2018

Beginning in May of 2016 the EPA began looking at overhauling the Energy Star Portfolio program using data that it had gathered from the 2012 CBECS survey. The previous model was based on data from 2003. Needless to say, energy efficiency greatly improved in a 9-year span. It is expected that ratings will be 9-15 points lower under the new system.

While the EPA has no plans to resend certificates that were already issued, for people in the know the value of older certificates could be greatly diminished.