What You Need to Know About Building Performance Standards

Building performance standards are the latest tool being used by state and local governments to reduce energy use and greenhouse gas emissions in existing buildings.

By Greg Zimmerman, senior contributing editor  

For the last decade, benchmarking ordinances have been all the rage as one of the best tools to get existing buildings to reduce energy use. Based on the theory that you can’t manage what you don’t measure, cities and states all over country passed these measures to ensure that large commercial buildings were measuring and reporting energy use. The idea was that if facility managers and building owners were required to disclose energy use, often in the form of a 1-100 Energy Star score, they’d also immediately begin to find ways to reduce usage. One EPA study showed that simply measuring energy use resulted in operational changes that saved 7 percent and improved Energy Star score by 6 points. That’s before any equipment was upgraded or any money was spent. Simply knowing how much energy a building used resulted in strategies to reduce. 

As climate change is speeding up, however, some states and cities are taking these benchmarking ordinances to the next level. Building performance standards are the next evolution because they require particular reduction targets for energy use, greenhouse emissions, or even water use. For example, the state of Washington, which, in 2019, was one of the first to pass a building performance standard, requires all buildings over 50,000 square feet to meet a 15 percent reduction in Energy Use Intensity by 2026. There’s more to it than that, and there are some caveats depending on building type, but the gist is that all buildings have to both measure energy use, and then reduce it. 

We talked to two noted building performance standard experts, Kimberly Cheslak, director of codes for the New Buildings Institute, and Ryan Freed, senior director of policy and regulatory strategy for the Institute for Market Transformation, about the importance of these new strategies for fighting climate change. Even if a building isn’t now subject to a building performance standard, that could very well change in the near future. So now is the time to get up to speed. Here is what they had to say. What are the main differences between benchmarking ordinances and building performance standards? What are the benefits of each in terms of reducing energy use in commercial buildings? 

Cheslak: Benchmarking ordinances simply require building owners to disclose their energy use, but not make any changes. While collection and disclosure of information may get an owner to make upgrades or changes based on comparison to similar buildings in their own portfolio or locally, these laws do not require that owners do anything to their buildings. Benchmarking ordinances typically have annual compliance for this reporting.  

Building performance standards take that benchmarking data and draw a line in the sand, requiring building owners that fall below a certain threshold to make improvements to their buildings to achieve better energy or carbon performance. Building performance standards typically have 5-year compliance cycles to improve over the set threshold. Building performance standards are a policy mechanism that ensures there is reduction of energy use in commercial buildings. 

Freed: Benchmarking a building provides valuable information to building owners, managers, operators, and tenants about how the building is performing. Understanding how your building performs in relation to others can help identify opportunities for energy upgrades.   

Building performance standards go a step further and set requirements for improving the performance of buildings. While benchmarking tells you where your building stands today in terms of performance, a building performance standard requires improvements to achieve a standard at a future date. Combined, benchmarking and building performance standards are a key tool to identifying, and improving building performance. Why are building performance standards an important step for cities and states to reduce emissions and meet their goals for mitigating climate change? 

Cheslak: Existing buildings make up the majority of the U.S. building stock: There are 5.9 million existing commercial buildings in the United States comprising 97 billion square feet and the replacement rate of buildings, demolition, and new construction is less than 2 percent per year, leaving a vast amount of outdated technologies in existing buildings. The U.S. spent over $1 trillion on construction in 2015, but only about $50 billion focused on energy retrofits of commercial buildings. According to Deutsche Bank, if $279 billion were invested in existing U.S. building retrofits, it would yield more than $1 trillion of energy savings over 10 years, the equivalent to 30 percent of the total annual electricity spending in the United States. 

To date, energy codes have been the main tool to meet climate goals for buildings, and while energy codes are triggered when owners decide to make changes, it's those decision points that are few and far between to get that segment of the building population to perform better. To meet climate goals, U.S. cities and states must look at their existing buildings and direct policies that reduce emissions in that stock of buildings, in coordination with advancing their codes to address new construction. This can be through creating new decision points, like compliance cycles for building performance standards, mandatory retrofit policies, time of sale or lease policies, or updates to building codes that are specific for existing buildings, amongst other options. The power of building performance standards comes from setting the right targets that align with climate goals and drive actions at the right pace to ensure investments are focused on achieving long term compliance and emissions reductions. 

Freed: Climate change is here, and the only way to meet critical climate goals is to reduce energy use in buildings. Benefits and outcomes of building performance standards could include: 

  • Finding a way to improve more homes and workplaces faster (renovation rate). This creates the opportunity for local careers. Doing this with a community-driven planning approach will ensure that the infrastructure — in terms of people, companies, government working together locally to address climate resilience — is in place to make more improvements happen. 
  • Increase community-driven climate policy — including greater community ownership of building retrofit, design, and clean energy strategies. 
  • Health benefits: Finding a way to move capital more equitably and at scale to comprehensive renovations to buildings can have community health benefits — indoor air quality, for example. 
  • Community resilience: At the very least, solutions like local resilience shelters that can support communities to withstand power outages, could be the kind of benefit that comes into these communities. How do third-party rating systems like LEED complement building performance standards? 

Cheslak: Rating systems like LEED can, but do not necessarily, complement building performance standards. These systems award better energy performance, which has the potential to lead to better compliance, but do not require very high energy performance. LEED is considered a green or sustainable building standard, addressing many components of sustainability that are important like site selection, materials, and indoor air quality, both for new construction and their operation and maintenance certifications. This first generation of building performance standards are focused solely on direct energy consumption, so unless a building is hyper focused on the energy credits in LEED certification, pairing a LEED certification with building performance standard compliance may not be compatible. Additionally, rating systems like LEED have lagged behind the transition to building decarbonization, so a LEED building that uses fossil fuels will more likely perform poorly for a building performance standard with a carbon metric where building electrification is critical. 

Freed: Building rating systems like LEED and Energy Star are great tools to help identify problems and opportunities in buildings. Many of these ratings systems are looking at locally-adopted building performance standards and exploring ways to integrate building performance standard requirements into their rating systems. 

Greg Zimmerman is senior contributing editor for He has more than 18 years’ experience covering facility issues.   

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  posted on 8/1/2022   Article Use Policy

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