Capital Efficiency explains what DC's BEPS requirements are and why you shouldn't pay to meet compliance.
Washington DC's Building Energy Performance Standard (BEPS) sets a minimum threshold for energy performance for buildings. Buildings that do not meet the standard for their property type will be required to improve their performance over the course of a compliance cycle and demonstrate compliance at the end.
BEPS consists of a 5-year compliance cycle with Data Analysis and Enforcement in year 6.
For now, BEPS only pertains to buildings greater than 50,000 SF, but eventually all buildings will be required to comply with BEPS.
What is benchmarking for compliance?
Each year, you have until April 1st to complete benchmarking. Benchmarking involves entering in all of your energy bills (among a few other things) into ENERGY STAR Portfolio Manager. As shown above, the requirement to benchmark is based on the gross building area (GBA) of your building:
> 50,000 sq. ft. - Began reporting in 2014 with 2013 energy bills (aka NOW!)
> 25,000 sq. ft. - Begin reporting 2022 with 2021 energy bills
> 10,000 sq. ft. - Begin reporting 2025 with 2024 energy bills
A slight nuance to the benchmarking requirements is that beginning 2023, third party data verification is required every 3 years, to check that the energy data is input correctly. By default, our licensed Professional Engineers (PE) help you meet that requirement.
Benchmarking compares your building's energy to similar buildings and calculates an ENERGY STAR Score and source Energy Use Intensity (EUI). If your building falls below the local median ENERGY STAR Score or is above the source EUI, you are deemed 'out of compliance' or 'non-compliant'.
Below is a chart of the 2021 BEPS ENERGY STAR Scores and source EUI's by property type:
If you're right on the edge of passing this round, expect to be considered 'out of compliance' or 'non-compliant' in the next BEPS compliance cycle, as the buildings that get upgraded this cycle will earn new/higher ENERGY STAR Scores, effectively lowering your current score below next cycle's local median.
What are the penalties if deemed non-compliant?
You will need to upgrade your building to be more energy efficient within the next 5 years or face substantial monetary penalties (fines), which have been proposed as the following:
As you can see, the penalties are being developed to be more expensive than the 'do-nothing' case and considering the fines the cost of doing business.
How to upgrade, if non-compliant?
Don't pay to comply! Contact us and we'll come in and provide turn-key services to upgrade your building to be more energy efficient with 100% project financing and no out-of-pocket expenses. We'll leave no stone unturned and based on your comfortability (invasiveness to the building and/or tenants) upgrade anything that has an impact on energy use:
HVAC & Controls
Lighting & Controls
Domestic Hot Water
Renewable Energy + Energy Storage
Windows, Roof, Insulation
We'll help with water efficiency too!:
Once upgraded, how to prove compliance?
There are four (4) paths for compliance:
Performance (what we do - recommended)
Rest assured, we will satisfy the performance pathway requirements of reducing site Energy Use Intensity (EUI) by 20%. In fact, we have identified energy savings of 93% on a building with an ENERGY STAR Score of 95!
You won't have to do a thing, we'll continue to populate ENERGY STAR Portfolio Manager on your behalf (again satisfying the 3-year requirement of third party data verification requirement by a licensed PE). BEPS requirements aside, we perform this service with all of our projects as part of our Measurement & Verification process.
Again, don't pay to upgrade for compliance!
100% Project Financing covers all hard and soft costs of the energy efficiency project and when provided the upfront financial capital, the project becomes a cash flow deal (you save more than you owe, i.e. the Savings-to-Investment Ratio (SIR) is greater than one). You no longer need to ask for the simple payback, Internal Rate of Return (IRR), or Net Present Value (NPV)... those financial metrics are N/A! with financing that:
Transfers with the sale of the property
Passes thru to tenants in a triple net (NNN) lease
Non-accelerating, fully amortized
BEPS requirements aside, avoid the cost of delay and continuing to pay higher energy bills. Energy efficiency increases property value and net operating income (NOI), improves health and human comfort, attracts and retains more tenants, and reduces carbon emissions.
Contact us to get started saving energy (money) today!