Policy report

The benefits of benchmarking building performance

07 Jan 2016

Today, buildings account for 40 percent of the total energy used in the United States, with building owners and occupants spending roughly $450 billion on energy bills each year. Despite the size of the opportunity for improvement, building efficiency is not highly valued in the real estate market, largely due to a lack of available information about building performance and energy use. A growing number of jurisdictions in the U.S. are passing energy benchmarking and transparency policies to address this information gap. When buildings are uniformly benchmarked—meaning their energy use is measured on a consistent basis—and that information is shared publicly, the real estate market is empowered to consider and recognize the value of energy efficiency.

The overarching goal of a benchmarking and transparency policy is to encourage the development of a strong market for building efficiency. Benchmarking brings building owners’ attention to energy efficiency, resulting in behavioral and operational changes that bring immediate and low-cost reductions in energy consumption. These policies also make building performance more visible in the marketplace, thus empowering consumers to more easily understand how buildings are performing and reward owners of efficient buildings.

Benchmarking information can inform policy and program development by allowing policymakers to craft more effective methods to address their jurisdictions’ most inefficient buildings. Similarly, utilities can use benchmarking data to target their customers that would benefit most from their efficiency programs, thereby increasing the cost-effectiveness of the utility’s efficiency investments.

The larger economy also stands to benefit: benchmarking policies that cover a substantial portion of a region’s building stock should lead to a widespread increase in the investment of building performance, including the creation of many jobs to conduct energy audits, retro-commission base building systems, and install upgraded systems and equipment.

Additionally, benchmarking polices produce environmental and quality of life benefits. Because energy benchmarking reduces energy use, it also reduces the greenhouse gas emissions associated with generating that energy. Furthermore, evidence is emerging that improved building performance can be beneficial to building occupant health, with energy efficiency being linked to reductions in incidences of respiratory illness and increases in occupant comfort and productivity.

Research is showing that energy benchmarking and transparency policies and programs are important tools to transform the real estate market into one that properly values energy efficiency. As these policies become more common, building owners, tenants, governments, and the public gain an improved understanding of building energy use, resulting in significant energy reductions, rising demand for energy-efficient properties, and a range of economic and environmental benefits.

Office of Energy Efficiency and Renewable Energy (EERE), U.S. Department of Energy, under Award Number DE-EE0006890