Energy Disclosure in California has had a bumpy road...

AB 1103, in effect from 2014 to 2015, required all sales, refinancing, and single tenant leases of an entire building, of  10,000+ sq. ft. or more was required to disclose energy usage prior to signing of any financial contract.

In October of 2015, the California Energy Commission (CEC) decided to appeal AB 1103 because utilities struggled to access energy usage data in multi-tenant buildings due to privacy laws.  All meter rate payers own their energy usage data unless they authorize its release. Thus, building owners could not access tenant data in order to produce accurate energy disclosure reports and comply with AB 1103. Further, AB 1103 did not have enforcement mechanisms in place to even guarantee compliance. 

Enter AB 802: California’s new Energy Disclosure law. AB 802 applies to all buildings over 50,000 sq. ft., including multi-family, which were not included in AB 1103. AB 802 allows utilities to download aggregate “whole building” data, including common and tenant data, into one number, effectively eliminating any privacy law concerns. 

Although the California Energy Commission (CEC) has not sent notices to building owners requiring compliance,  AB 802 is a law, and disclosure is required on an annual basis. Unlike AB 1103, AB 802 provides for enforcement mechanisms in the form of civil penalties - up to $2000/day for each day a building owner is non-compliant.(Public Resources Code, Section 25321).

Since AB 802 is a law, it would make sense to request these energy disclosures when purchasing or leasing a building, just like any other disclosure document. 

Reach out to Green EconoME to help get your AB 802 report filed before the CEC starts enforcing.

It’s never too late to get Energy Star Certified! Irvin Grant, a 101 year-old Building Owner in LA recently ENERGY STAR Certified his building with the help of Green EconoME. Irvin built Brentwood Terrace Condominiums, located at 825 S. Gretna Green Way, in the 1960s with his sister. Its eye-catching rounded front has made this building a landmark in the Brentwood neighborhood. 

ENERGY STAR is the government-backed, energy efficiency ranking system. For eligible buildings, the tool calculates an ENERGY STAR score on a scale from 1 to 100.  For a building to be labeled “ENERGY STAR” certified, it must score a 75 or above. Studies find that ENERGY STAR certified buildings command a sales price and rental rate premium of up to 16%.

Irvin’s building received a score of 93, determined by the Benchmarking Report that Green EconoME generated for the building to be in compliance with Los Angeles’ Existing Buildings Energy & Water Efficiency (EBEWE) Ordinance. With Green EconoME’s guidance, Irvin pursued the ENERGY STAR certification in order to be exempt from Phase II of EBEWE, which requires an ASHRAE Level 2 Audit and Retro-Commissioning.

To learn more about EBEWE, exemptions, or other city/state Energy Disclosure Laws visit Our Services.

To learn more about ENERGY STAR Certification click here.

Or feel free to contact us: info@greeneconome.com or 818-681-5750.

If you own and/or operate an older building, existing inefficient equipment or a lack of new-age, sustainable solutions may be unnecessarily driving up operational costs. Here are the 6 ways to make sure you’re saving money and not throwing it out the window.

1. Get Rid Of Those Fluorescent Lights

Replace all fluorescent lights with LEDs, including all parking lot lighting. Installing LEDssave up to 20% – 30% on annual operating costs.

Lighting Retrofit Case Study

2. Install Solar Already

In addition to providing a long term energy cost reduction, you’ll also utilize the available tax benefits:

  • 26% Federal Business Energy ITC (dropping to 22% in 2021 and 10% thereafter),
  • The State of CA (MACRS) accelerated depreciation, and
  • Recently added, the 100% bonus Federal tax depreciation allows eligible entities to deduct the entire allowable tax basis of the system in the first year of operation.

Taking advantage of these tax incentives reduce the owner’s tax liability and will significantly offset the cost of a Solar PV system.  These incentives can also be applied to a roof replacement if combined into one project.

Solar PVs Case Study

3. Stop Cooling An Empty Room

Replace pneumatic thermostats with digital for higher-level control and visibility. Digital thermostats allow building owners to reduce peak demand by creating schedules around when spaces are unoccupied (holidays, non-peak hours, etc.).

Thermostat Retrofit Case Study

4. Be Smarter Than The Building

An energy management system (EMS) provides real-time monitoring, energy analytics, and wireless building control. The ability to measure a building’s energy usage on a granular level allows for better management of energy consumption and “peak demand.” An EMS provides extensive energy data history, peak load notifications, detailed usage reports, and more.

Energy Management System Case Study

5. Shield Your Internal Environment

Solar window film is applied to the interior of a window in order to control solar heat absorption. The film rejects up to 79% of solar energy and 99% of harmful UV rays.  Further, the film helps reduce glare, adding to a more comfortable office environment.

Solar Window Films Case Study

6. Protect Your Expensive Equipment

EvaporCool is a dual patented technology that pre-cools outdoor air prior to flowing through the condenser coils of an HVAC system. The pre-cooled air helps reduce the amount of work that the compressor must do to cool the air flowing inside a building. By minimizing the amount of work the compressor must do, the EvaporCool system prolongs the life of HVAC units, reduces energy usage up to 30%, and saves a significant amount in energy-related costs.

Evaporcool Case Study

Before getting started with any of these cost-saving options, we suggest having your building Benchmarked.
If you’d like to learn more about any of these cost-saving options, reach out to us at info@greeneconome.com or (818) 681-5750.

In response to Covid-19, many companies have encouraged employees to work from home until further notice. The absence of tenants presents an opportunity for Commercial Office Building Owners to adjust their building’s energy output appropriately and even save money on utility bills.

Tips for Commercial Office Building Owners

Here are a few tips to ensure you don’t waste energy during this time:

  1. Make sure all lights are turned off. If lights are controlled by a timer, update the status to “Holiday” or “Unoccupied” until further notice.
  2. Turn off your thermostats.There’s no need to cool or heat unoccupied buildings.
  3. Turn off your plug-load. If you do not have a master plug-load controller, physically unplug all power cords from any active outlets.
  4. If you have solar, use this opportunity to build excess energy for utility discounts or to fill your battery.

Tips for Multi-Family Building Owners

This will have an adverse affect on Multi-Family Building Owners. Since most companies are requiring their employees to work from home, the utility bills will most likely increase. Here are some steps tenants can take to minimize the increase:

  1. Turn-off lights in unoccupied rooms. If you have not already replaced your fluorescent lights with LEDs, do so as soon as possible. LEDs do not create heat and use less energy.
  2. If possible, open a window to cool your apartment, rather than utilizing your air conditioner.
  3. Unplug any unused power cords. If an outlet is not switched off, and has a plug inserted, the outlet will still use energy.
  4. Take shorter showers. Showers should take 7 minutes or less.
  5. Turn the water off while brushing your teeth. Only turn the water on to rinse your toothbrush.
  6. Only run the dishwasher when it’s full. Use the energy-saver mode if available. Otherwise, fill the sink and wash dishes by hand.
  7. Report any water leaks. This can lead to a much larger problem.

For more tips on how to reduce utility costs CONTACT AN ENERGY SAVINGS EXPERT

Did you implement Energy Efficiency measures in your building during 2018 or prior? You may be eligible for a tax deduction and/or credit.

As of December 19, 2019 the Senate has approved the 2019 Tax Extender Bill, which extends the 179D deduction and the 45L tax credit. This  allows for the adjustment of 2018 tax returns to include qualified energy-efficiency projects from that year.

The deadline to amend 2018 tax returns is December 31, 2020. Projects from earlier than 2018 may still qualify if you have not taken advantage of available incentives. Ask Green EconoMe how you can maximize this benefit.

What is Section 179D Tax Deduction

179D was created in 2005 under the Energy Policy Act (EPACT), allowing a tax deduction from $0.30 to $1.80 per square foot for the installation of energy efficiency systems in the commercial space.

Building owners are not the only beneficiaries of this tax deduction. Tenants may also be eligible if they take on construction spending. However, deductions can only be recognized for the year that efficiency measures are up and running.

What is Section 45L Tax Credit

45L was created in 2005, providing $2,000 per dwelling unit that consumes less energy than national standards. This credit is meant for low-rise apartment developers with buildings 3 stories or fewer. Buildings 4 stories or more may qualify for the 179D deduction detailed above. The 45L credit can be applied to new construction or the refurbishment of existing units. Like with 179D, in order to be recognized for the tax credit, the new or refurbished unit must be leased or sold within the year that tax return is filed.

 

Does my Building Qualify for Tax Deduction or Tax Credit?

Green EconoME is a woman-owned, multi-disciplinary energy consulting and construction firm providing full-scale energy efficiency services to diverse public and private sector clients. Not only are we led by a former CFO who seeks all incentives available for each project, our ROI data is also 98% accurate. Contact us to see if any of your projects are eligible for these extensions!

info@greeneconome.com or (818) 681-5750

Solar PV reduces operating costs & increases building’s valuation!

Why should building owners consider Solar PV installations?

  1. Solar Energy is truly renewable. The amount of energy generated by a PV system reduces both the kWh used by a building and the building’s peak KW.
  2. The cost of solar-generated energy is much lower than the cost of energy purchased from a utility.
  3. Thanks to the longevity of solar systems (appx. 25 years), a solar PV investment will allow owners to reap financial benefits for years to come.
  4. The minute the system starts operating, Net Operating Income (NOI) increases.
  5. Stop relying on others for energy by creating your own on-site energy independence.
  6. Get Net Energy Metering (NEM) credit when excess energy gets sent back to the grid.
  7. Solar Projects are eligible for the 30% Federal Investment Tax Credit (ITC). Installation of a new roof at the same time as the solar project, allows for 30% ITC on both projects.  This Tax credit is dropping to 26% on January 1, 2020.
  8. Demonstrate to your employees, neighbors, and customers that you’re serious about  “Going Green”.

Case Study on Solar PV Savings

A hotel client invested $1.4 million into Solar PV systems to provide 27% of the hotel’s energy usage. With current tax credits and accelerated bonus depreciation, the project cost was reduced by 54%. Incredible.

Consult us today and see why a Solar PV system makes sense for all the above reasons and more!!

Within typical lease structures, landlords incur capital expenses, but see none of the cost-saving benefits, when conducting an energy efficiency retrofit.  The resulting efficiency favors the tenant, who see utility costs go down. Thus, owners hesitate to invest in improving the efficiency of their buildings. This is called the “split incentive”.

But what if there was a way to provide incentives to both owners and tenants?  The solution lies in a relatively new concept called “Green Leases”, also known as energy-aligned, high-performance or energy-efficient leasing. These leases align the financial and environmental goals of the landlords and tenants to work together to save money, conserve resources and ensure the efficient operation of buildings.

WHAT IS A GREEN LEASE?

A green lease incorporates energy and cost conscious clauses that benefit both building owners and  their tenants. It is important to engage stakeholders as soon as possible and gain buy-in on the outset of the leasing process. The earlier the parties communicate their sustainability goals, the higher probability the green lease language will remain in the final lease.

With Green Leases,  landlords can adopt a  “cost recovery clause”, also known as “cost pass-through” language, to amortize and recoup capital costs for energy efficiency improvements made to the building and common areas.  This allows owners to reap significant long-term savings while complying with local and state laws.

Ordinances like the City of LA’s EBEWE,  mandate minimum levels of building efficiency, meaning retrofit costs are inevitable in order to comply.

HOW TO QUALIFY FOR A GREEN LEASE?

Green Lease Leaders*, an association of landlords, tenants, brokers, and energy experts, has developed a best practices breakdown of what should constitute a “green lease” for commercial, “high-performance” buildings.

Levels of Green Lease qualification are broken into two tiers.  

  1. Silver (Foundational)
  2. Gold (Implementation)

To reach the Silver-level, owners must demonstrate the development of foundational policies and practices that encourage reduced energy consumption in leased spaces.  Such policies and practices must include the following prerequisites, communicated in a standard lease or corporate guidelines:

  • Provide a sustainability contact to tenants (either at the Owner’s office or a third party consultant)
  • Implement a cost recovery clause for energy efficiency upgrades benefiting tenant (same as above)

The Gold-level Green Lease requires owners to implement at least five of the following practices, constituted in the lease:

  • Track common area energy use
  • Track common area water use
  • Disclose whole-building ENERGY STAR score to tenants annually
  • Ensure brokers have energy training
  • Implement landlord energy management best practices
  • Require tenants to purchase on-site renewables if offered by landlord and competitively priced
  • Meter tenant spaces that are greater than 5,000 sf
  • Request annual tenant energy disclosure
  • Request minimum energy efficiency fit-out for tenants
  • Demonstrate innovation in leasing

Owners with existing leases not imminently up for renewal can still qualify and be recognized for a Green Lease policy so long as such Green Lease requirements are met in all negotiations going forward.

Energy Benchmarking measures and reports the energy performance of a given building, ensuring compliance with local and state laws.  It also allows for performance comparisons to other benchmarked buildings of a similar size, occupancy and climate.

1. COMPLIANCE

Benchmarking via the ENERGY STAR Portfolio Manager software is required by both city and state-wide legislature. Cities such as, Los Angeles (EBEWE), San Francisco, and Berkeley have all enacted ordinances requiring commercial and multi-family buildings to conduct an energy audit and report their annual energy usage. Most recently, the State of California has renewed a new energy disclosure law, AB 802, formerly known as AB 1103, requiring annual energy disclosure.

2. COST REDUCTION

Research shows that commercial buildings waste 30% of their energy. Building energy benchmarking empowers its owners by revealing crucial energy use data, pinpointing areas of potential efficiency improvement and cost savings. Such transparency allows owners to remain competitive and to take specific action to increase the longevity of building systems.

Owners who have benchmarked their buildings are more inclined to focus on energy efficiency and have consistently reduced their energy use by an average of 2.4% per year.

3. COMPARISON

Benchmarking is available for 21 different types of facilities and produces an Energy Star Score between 1 and 100, with 100 being the most energy efficiency. The process also calculates the Site and Source Energy Use Intensity (EUI) of the building and compares it against the National Median of CBECS data*. When comparing these scores against similar building types/uses in the software, building owners begin to understand how this performance stands in regards to energy and water efficiency. Owners can take specific steps to mitigate energy shortfalls and improve efficiency, resulting in a higher net operating income.

*  Also known as Commercial Buildings Energy Consumption Survey using 2012 survey data.

4. SMARTER DECISION-MAKING

In addition to supplying current snapshots of a building’s energy use, energy benchmarking yields data on past use as well, giving light to patterns of use over time.

Such a window grants owners the viewpoint to make smarter decisions about energy efficiency solutions and energy management and to optimize capital investments into energy-efficient technologies going forward.

Consistent energy benchmarking provides valuable insight as to the building’s performance over time which provides data for decision-making.

SUPPORT

Getting started with benchmarking can often be the biggest hurdle.

Contact Green EconoME to begin the benchmarking process, or to find out more. We have benchmarked over 1400 buildings.