The Ins & Outs of NYC Building Energy Rating and Energy Grades

Since 2020, buildings 25,000 square feet and larger have been required to publicly post their NYC Building Energy Efficiency Rating (Energy Grade) by October 31. These energy efficiency ratings and corresponding letter grades “A” through “D” must be posted near the property’s public entrances.
 
As mandated by Local Law 95 and Local Law 33, failure to prominently display your Building Energy Efficiency Rating will result in a NYC Department of Buildings (DOB) violation and a fine of $1,250.
 
Buildings account for more than 70 percent of greenhouse gas emissions in New York City. That’s why buildings are a focal point of the city’s Climate Mobilization Act, a bold initiative to dramatically reduce carbon emissions from large buildings by at least 40 percent citywide by 2030, and 80 percent by 2050.
 
One way to help curb the city’s greenhouse gas emissions is to drive building owners and board members of condominiums and cooperatives to take measures that will improve their property’s overall energy performance. These entities can then use the Energy Grades as a tool to initiate conversation, education, and ultimately reduce energy consumption among building tenants, residents, and shareholders.
 
While the impact on your building’s “brand” – as perceived by potential unit owners, shareholders, and residents – and the effect on property valuation cannot be predicted, a “D” grade could raise uncomfortable questions when a prospective owner or tenant visits the property.
 
As your property management leader, FirstService Residential and its energy advisory affiliate, FirstService Energy, are prepared to help condo and co-op board members and multifamily rental building owners comply with the multitude of new energy laws that have been enacted in New York City. This extends to helping FirstService Residential clients identify and quantify capital improvements or retrofits that will improve their NYC building energy grades.

We also are helping to educate our unit owners, shareholders, and residents on simple measures they can take to reduce their building’s overall emissions in order to help their building comply with the stringent carbon emissions caps required by Local Law 97 of the Climate Mobilization Act.

How are building energy efficiency scores calculated?

The Environmental Protection Agency’s ENERGY STAR Portfolio Manager is used across the country to benchmark building energy consumption. This online tool generates an ENERGY STAR score ranging from zero to 100 that compares energy use in similar buildings. In New York City, the ENERGY STAR score is converted to a letter grade, ranging from A to D.

Energy Grades are based on a building’s aggregate energy consumption data. These statistics include energy consumption from individual apartment units, mechanical equipment required to operate the building, lighting throughout all common areas of the property, as well as any additional components within the property (i.e., ground floor retail, medical centers, community facilities, etc.). Simply put, it is the total energy consumed by your building divided by its total square footage.

Buildings that are exempt from benchmarking or not covered by the Energy Star program are not subject to the posting requirement and will receive an “N” grade. Properties with New Build or Demolition permits that have not been issued a temporary certificate of occupancy (TCO) in the applicable reporting year, or properties with an ownership change in the applicable reporting year, may be eligible for a temporary exemption.  
 
 

What can your building do now to reduce energy waste, costs, and greenhouse gas emissions, and ultimately improve its score?

New York City’s newest energy laws present an opportunity for buildings to educate one another, save money, reduce emissions, and improve quality of life for their residents and their neighborhoods. As a community, boards and owners can work together to promote energy efficient practices, as well as collaborate on reducing waste and cutting costs. Whether you personally care about reducing greenhouse gas emissions, saving money, or how your building is perceived by potential unit owners or shareholders, there are clear benefits to improving your building’s Energy Grade.

• Take care of the no-cost, low-cost, and high ROI projects that your building may have been putting off.
• Create a capital plan for your building that includes energy waste reduction strategies and newer technologies that help reduce the amount of energy your building consumes.
• Choose a qualified service provider to conduct an energy audit of the building and its mechanical systems and work to create an implementation plan.
• Take advantage of Con Edison, National Grid, and PSE&G incentive programs that will help reduce the upfront cost of many waste reduction/energy efficiency projects in your building. 
• Have your building staff trained on best practices to reduce energy waste. Many times, supers and operators are not aware that small adjustments made in the moment to address one problem may have a dramatic effect on the rest of your building systems and cause an energy waste situation. 
• Pay special attention to your critical systems such as heating, cooling, ventilation, and domestic hot water. These systems may be causing the largest energy waste in your building.
• Infiltration of outside air and moisture can cause uncomfortable conditions for building occupants and cause your system to work harder. Take care to address these areas by having a professional visit your building to evaluate the conditions and help create a plan. If your building is undergoing facade work identified through Local Law 11 (Façade Inspection & Safety Program - FISP) and there is a problem with infiltration, it may be a good idea to address those conditions at the same time to save money and time.

 

FirstService Residential & FirstService Energy: Working in Tandem for Boards and Owners

Since the passage of Local Law 33 in 2018, FirstService Energy has proactively provided building energy grades to each of FirstService Residential’s boards and clients. To further simplify the complex new requirements, our team of in-house experts has also provided an assortment of webinars, symposiums, customized infographics, and one-on-one consultations to help our clients understand the laws.
 
As your trusted property management leader, FirstService Residential and each of our affiliates are here to answer any questions you may have and can provide expert guidance on how to increase your building’s letter grade and eventually reduce your property’s overall carbon emissions as required by the Climate Mobilization Act.
 
Contact FirstService Residential today for more information on how we help our clients improve their NYC building energy grades, among our many other property management services.