TENANT STAR: Energy Star Companion Seeks to Transform Recognition in Commercial Interiors
Posted July 16, 2013
A powerful coalition of real estate owners, developers, and service companies are rallying around TENANT STAR, a groundbreaking program to significantly reduce energy use in commercial office buildings. The new label builds from the existing ENERGY STAR brand, providing a ‘holistic’ performance rating by documenting energy performance in leased commercial space and rewarding those tenants who meet or exceed high performance standards.
More than 60 private sector companies and leading building industry organizations, financing sources, and energy and environmental advocates are commending and urging enactment of TENANT STAR, introduced in a bi-partisan Senate bill known as ‘Better Building’s Act’ S.1191 by Senators Bennet (D-CO) and Ayotte (R-NH) on June 16. These leading organizations also backed the equivalent House bill, ‘Better Building’s Act’ H.R. 2126 introduced a month earlier.
The widespread support signifies the growing momentum to address tenant impact on energy consumption in the built environment. In fact, the Real Estate Roundtable (RER), whose members represent over 5 Billion square feet, of property valued at over $1 trillion, convened the impressive list of business and government leaders around TENANT STAR, and last month testified on the proposed bill at a Senate Energy and Natural Resources subcommittee hearing.
As highlighted in a written statement from Brad Molotsky of Brandywine Realty Trust, who serves as RER’s Sustainability Policy Advisory Committee (SPAC) Vice Chair, TENANT STAR will drive improvements to commercial real estate market energy performance by encouraging owner and tenant cooperation during design, construction, and occupancy through:
- Best Practices to Encourage New High Performance Tenant “Fit-Outs”
Commercial tenants are most likely to make structural investments in the building spaces they occupy at the time they enter into new leases, or renew leases. S. 1191 would encourage high-performance design and construction of leased spaces at the point of new “fit-outs” by authorizing DOE to study and learn from private sector “best practices” of how commercially leased spaces are constructed up-front to achieve high performance, implement cost effective measures with viable pay-back periods, and ultimately reduce utility costs for businesses. Based on DOE’s study, it may then develop a voluntary program – with stakeholder comment – to reward and recognize tenants that design and construct high performance leased spaces.
DOE would be given the platform to draw heavily from the groundbreaking work by the Natural Resources Defense Council’s Center for Market Innovation (CMI). In particular, CMI is spearheading a “High Performance Tenant Demonstration Project”.
- Opportunities for Voluntary “Tenant Star” Recognition in Existing Leases
In addition, once tenants move into their leased spaces, they should be able to gain recognition for energy efficient behaviors as a marketing tool to advertise to their own customers, investors, and other audiences. S. 1191 furthers this objective by authorizing EPA and DOE to develop a new program for a voluntary “Tenant Star” label. Such a program would build upon the widely successful ENERGY STAR label that is already available for real estate owners at the whole-building level.
ENERGY STAR buildings are represented in all 50 states, covering billions of square feet, saving over $2.7 billion in utility bills in 2012. Just imagine if TENANT STAR could more than double the savings, and the positive impact to our nation’s buildings, people and the economy at large.
NRDC’s Center for Market Innovation is proud to support TENANT STAR and delighted to work with the Real Estate Roundtable in its creation. The opportunities utilizing a proven, market based energy optimization process and actual tenant cases from the High Performance Tenant Demonstration Project show that a sensible, cost effective, comprehensive approach to energy performance works.
Recognition of the companies and people who prioritize energy performance promotes innovation and identifies smart business practice, leading the energy efficiency dialogue towards the new business as usual and mainstream standard. We look forward to continuing to inform TENANT STAR and supporting our nation’s leaders, the DOE and EPA in bringing ENERGY STAR to the next level through our complementary work.
Special thanks to Duane Desiderio, RER Vice President and General Counsel, Anthony Malkin, RER SPAC Chair and Brad Molotsky RER SPAC Vice Chair for advancing TENANT STAR and energy performance in the built environment.