With half of the New York City’s buildings declared “Energy Deficient”, an amendment of Local Law 33 of 2018 was carried out by introducing Local Law 95 of 2019. The law now mandates buildings over 25,000 square feet to submit a benchmarking report annually to the Department of Buildings (DOB), so that they can get graded on their energy efficiency. This was executed as part of the Mayor De Blasio’s Green New Deal, which aims to thoroughly comply with the goals of the Paris Agreement. The first set of grades was released on October 1, 2020 and buildings had 30 days to post their grades “in a conspicuous location near each public entrance” to enhance public participation. Failure to do so resulted in a fine of $1,250.
Data shows that more than a third of NYC’s total greenhouse emissions come from buildings over 25,000 square feet. This makes it quite clear that energy efficiency is a significant priority for buildings in the city.
With that in mind, authorities in New York City have passed certain legislation to benchmark buildings’ energy use. Local Law 33 of 2018 and LL95 of 2019 mandate that buildings benchmark their energy use and display their energy grades.
But what are these NYC energy grades all about? If you are wondering the same thing, then you are in the right place. Here, we will learn all you need to know about energy efficiency grades for buildings in NYC.
What does the letter grade mean?
The benchmarking report indicates a building’s energy and water usage as of previous year. It also generates an energy efficiency score and a letter grade. The grades are categorized as below:
- Grade A will be assigned for a score of 85 or greater;
- Grade B will be assigned for a score of 70 or greater but less than 85;
- Grade C will be assigned for a score of 55 or greater but less than 70;
- Grade D will be assigned for a score that is lower than 55.
A building that did not submit the report will automatically receive an energy efficiency grade of F. If a building cannot obtain a score or is exempt with containing data center, trading floor, television studio that cumulatively exceeds ten percent of the gross square footage will receive an N. According to the Local Law 95 of 2018, only buildings that fail to post the grade will face a penalty. However, starting from 2024, Local Law 97 will mandate owners to pay fines at $268/ton annually for the over-limit Greenhouse Gases their buildings emit. This means a building owner could face multi-million fines with a poor energy efficiency grade in near future.
The DOB releases new grades every year on October 1. It is recommended to work with an engineer, a benchmarking specialist or a consultant for accurate results. The grades help building owners gauge where their buildings stand comparing to other buildings of the same type. They also encourage owners to consider long-term cost savings opportunities.
Does My Building Require an Energy Efficiency Grade?
Every building in NYC that is 25,000 square feet or more needs to benchmark its energy use and display its grades. Building owners or managers must post this grade in the lobby by October 31st each year. These grades are upgraded every year based on the latest data monitoring the building’s energy efficiency.
You can get these updated grades or labels online every year on the 1st of October. Displaying these grades is not an option, and a violation can cost you a fine of $1,250. The Department of Buildings (DOB) can charge this fine if you fail to display the energy grade by the stipulated deadline, which is the 31st of October.
How do you calculate the energy grade for buildings in NYC?
NYC’s Department of Buildings will calculate the building’s energy grade. They generally evaluate the data from mandated benchmarking under LL84 and update the grade annually.
The building will get the grade it earned based on the ENERGY STAR score of the property. It is worth noting that one can calculate this metric while benchmarking the building’s energy consumption and use.
These NYC energy efficiency grades can range from one to a hundred, depending on your building’s performance. The higher you score here, the better it is for your building’s energy efficiency rating, and this resembles better performance.
Determining these scores means considering a wide range of operational factors. Yet the Source Energy Use Intensity, a measure of a property’s annual energy use, is a significant influencer here.
This measures every unique aspect of the building’s energy consumption, from gas to electricity. It also includes the energy needed to generate, transform, and distribute the energy to your property.
Understanding Energy Grades for Buildings in New York City
As mentioned earlier, evaluators rely on the data from mandatory benchmarking under the LL84. Naturally, each of these grades falls under different classes or categories, differentiating one building’s energy use from the other. So, let’s check out the breakdown of this unique system for a clearer idea.
A. This grade is represented by a green color and is equal to or greater than 85, making it the best category.
B. This is the second-best category, represented by a lighter and more earthy shade of green. The B class represents a score greater than or equal to 70 but less than 85.
C. The third category here is C, which symbolizes a score equal to or greater than 55 but less than 70.
D. This is the worst your building can score, as the D category symbolizes a score below 55 and is represented by the red color.
F. If you get the F energy efficiency grade, it means that you failed to submit the necessary information after benchmarking.
N. The N energy grade is not that common. It indicates that buildings are exempted from benchmarking and that the necessary convergence is under the ENERGY STAR program.
Is There Any Effective Way to Enhance a Building’s Energy Efficiency Grade?
Better energy ratings not only ensure that your building is energy efficient but also enhance its value in the market. Just in case your building got a low energy grade NYC, here are some ways you can improve it:
1. Look for Proper Energy Saving Measures
You just start things on the right note and find better and more effective ways to save more energy. This could be any measure, from upgrading existing systems to optimizing their performance. You can also conduct energy audits to determine areas of improvement and take necessary measures accordingly.
2. Check the Data for Potential Errors
Another simple yet effective way to enhance the building’s energy rating is to check the data. You never know if there are any errors in the data recorded during the benchmarking that are hampering the building’s grade. It is always wise to cross-check this data and ensure accuracy to get things right.
The Real Deal magazine reviewed DOB’s released grades and found that 43% of the covered buildings received D, 15% received A B & C and about 10% received F.. These grades received mixed responses and feedback. Some landlords complained the unfair rating whereas many others took it as an opportunity to upgrade energy efficiency for their buildings and increase the value. For example, the Durst Organization, whose portfolio spans over 10-million square feet in New York resorted to immediate retrofitting measures by installing brand new HVAC system & energy-efficient windows.
The energy efficiency grades may continue to face mixed feedback, but they were created to encourage energy-efficient retrofits and eventually meet the carbon reduction goals set by the New York Climate Leadership and Community Protection Act. As the Department of Buildings Commissioner Melanie La Roca puts it “the grades are a tool to give New Yorkers a clearer picture of where building owners stand when it comes to building a more environmentally friendly city. The public has the right to know which large buildings are taking their commitment to sustainability seriously.”
In the next blog, we will explain how the benchmarking report is generated and how owners can use it as a tool to diagnose their buildings for improvements. For more details on NYC Energy Efficiency Grades or the compliance, contact us.
