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Energy Performance Ratings

Buildings consume 40% of our total energy requirement (heating, cooling, lighting). 

The idea of rating building energy performance has been around for many years. An effective rating system is a free market response to encouraging efficiency – as opposed to establishing minimum standards which are also being adopted in some places. 

If one were able to compare buildings on an equitable basis, and that information was made known, developers and owners would be encouraged to design, construct, upgrade, and operate their buildings more economically. There would certainly be a market disincentive to operate building systems inefficiently. Doing so would reduce tenant appeal, hold down rents, and make such properties less valuable and more difficult to finance. On the positive side, a more efficient building is one that is likely to enjoy higher valuations and lower operating costs. So, more and more building owners and buyers today are making energy consumption part of their business equation.

The Legal Imperative

Some states and municipalities have adopted energy ratings as part of their building code or other ordinances. Among these are California and Washington, and local jurisdictions such as the District of Columbia and the cities of New York, Austin, and Seattle. More regulation is pending. 

Furthermore, public utilities are moving to make such information readily available, either to assist in the implementation of public policy directives to lower energy consumption or assist in compliance with the aforementioned regulations. 

Apples to Apples

Rating energy consumption for household appliances is relatively simple. Most of us are familiar with appliance labeling and the Department of Energy’s EnergyStar program.

Rating gas mileage is also relatively simple, though one starts to get into variables that must be normalized – a car going uphill against the wind with four 300-pound passengers will get worse mileage than a car coasting downhill with a tailwind and a 110-pound solo driver.  Still, cars can be pulled off the assembly line and operated under controlled conditions. With standardized measurements, every car of a particular make and model should operate within relatively slight variation.

Buildings, however, have much more variability. Further, they are field assembled, creating variability not only in design but also in construction. And of course, operating conditions – weather, occupancy, activity type, and levels – are major factors in energy usage. 

Rating existing buildings is actually easier than rating new buildings because there already is a measure in place – bills from the utility company.  Still, arriving at a single energy factor can be difficult since there are often multiple fuels or sources of energy being used and complex rate structures to analyze and compare.

ASTM E-2797

Evaluating the efficiency of a building can be seen as a series of steps. The first of these might best be characterized as determining its energy use intensity (EUI), defined as annual energy consumed by a building per square foot of gross floor area. 

Some companies already require the calculation of energy consumption as part of a Property Condition Assessment (PCA). To date, this has been accomplished by simply reviewing the energy bills, converting all fuel usage to a common measure (British Thermal Units or Kilowatt-Hours) and reporting the results. 

However, as stated above, this can lead to glaring anomalies. The first factor to affect these values is the weather.  Beyond that, one must look at changes in occupancy or use (a building formerly used only to store records becomes a call center, for example), recent renovations, operating hours, management practices, and similar variables.

To address these variables, ASTM has published a new standard, ASTM E-2797: Standard Practice for Building Energy Performance Assessment for a Building Involved in a Real Estate Transaction. The purpose of the standard is to define the methods by which energy usage data will be collected and reported so that true comparisons can be made. The process involves a site visit, interviews, records collection, records review and analysis, and  reporting of results.  This practice is best used as part of buyers’ and investors’ due diligence to evaluate prospective real estate acquisitions.

Now You Can Compare

Having a normalized measure of energy consumption is a valuable tool.  But what does it mean?  Is it high or low?  The next logical step is to benchmark your building against those of similar function.  The Environmental Protection Agency has developed a benchmarking tool based on a survey conducted every 4 years by the Department of Energy, making it possible to compare the consumption of a particular building to others.    The rating is based on a scale of 1-100, where 50 represents the median energy consumption of all buildings of similar type and function, normalized for occupancy and weather.  Those buildings earning a 75 or more are further eligible to be awarded an Energy Star rating.

The EPA Portfolio Manager Benchmarking is most often used by managers of existing buildings to assist in allocating their assets and developing plans and strategies.  At this point, only certain types of buildings have benchmarking data, but the system is expanding.  In addition, automated benchmarking services are being introduced to assist in managing properties on an ongoing basis.

As various constituencies have recognized the need, other entities have responded by developing different systems and strategies. Among the better known are:

The ASHRAE Building Energy Quotient (EQ) is another tool for energy managers to improve building energy performance. EQ is a building labeling program for new and existing buildings based on the building’s “As Designed” and “In Operation” energy usage per square foot. The building is provided a letter grade F through A+, where A+ denotes a Net-Zero Building. A letter A denotes a High Performance building (ASHRAE Standard 189.1 - Standard for the Design of High Performance Green Buildings). The letter indicates how the building compares to a typical building and how close the building is to its technical potential.  The As Designed rating is determined by a building energy model.  The In Operation label is based on 12-18 months of actual energy usage.  

The Capital Markets Partnership Green Value Score is designed to assist underwriters in valuing assets. Although it includes energy consumption, the scale of 1-100 is a broader measure of “greenness” that also includes water usage and factors incorporated into LEED (Leadership in Energy and Environmental Design) technology, as well as the effect on the environment. It is intended to serve as an indicator of investment risk and long-term asset value.

What Next?

Once you know how much energy your building consumes and how it compares to others, what’s next? 

If your building has an Energy Star rating below 75, there are many things that can be done – and probably should be done – to improve its efficiency.  Many improvements fall in the category of no cost/low cost and require little analysis. More complex strategies require more sophisticated analysis to compute savings and return on investment. 

Regardless of outcome, the process starts with an energy audit. The American Society of Heating, Refrigeration, and Air Conditioning Engineers (ASHRAE) has defined four different levels of audit, starting with a simple walk-through and advancing to detailed computer simulations. The approach you choose depends on the complexity of design, applications, and opportunities available.

Who Can Provide These Services?

The ASTM standard is very general about who can perform this work, only requiring a “qualified consultant.”  However, much of the work involves the practice of engineering, and many firms who provide Property Condition Assessments (PCAs) may also have such expertise.  Although anyone can enter information into the Energy Star Portfolio Managers to obtain a rating, obtaining the Energy Star label (for those with a rating or 75 or above) requires the review and certification of a licensed Professional Engineer or Registered Architect.  For more advanced analysis, one may also seek out professionals who also carry the designation Certified Energy Manager (CEM).

Volume 22, Number 1

March 2011

Copyright © 2011

The Engineering Advisor is intended to enhance your knowledge of technical issues relating to buildings.  For additional information on any subject, please feel free to call us.  Our commitment is to provide you with timely, accurate information.