 
Why Some NYC Buildings Lose Energy Grades Every Year
New York City has taken a strong stance on energy efficiency and carbon reduction. Through benchmarking laws and public disclosure requirements, building owners must report their annual energy performance. As a result, many properties receive an official energy grade that reflects how efficiently they use electricity, gas, and other fuels.
However, a growing number of property owners are asking the same question: Why do some NYC buildings lose energy grades every year?
If your building’s grade has dropped from a B to a C—or even lower—you are not alone. Across New York City, commercial buildings, multifamily properties, and mixed-use developments experience fluctuating energy performance scores due to several technical, operational, and compliance-related factors.
This article explains why energy grades decline, what it means for building owners in the United States, and how to prevent long-term performance loss.
Understanding NYC Energy Grades
Before exploring the reasons behind declining grades, it is important to understand how the system works. Under the city’s benchmarking requirements, large buildings must report energy and water usage annually through ENERGY STAR Portfolio Manager. The building then receives an energy efficiency score and a public letter grade.
The grading system is closely tied to federal standards developed by the U.S. Environmental Protection Agency and its ENERGY STAR program. Buildings are evaluated based on energy consumption intensity (EUI), building type, occupancy patterns, and operational characteristics.
In addition, local regulations such as Local Law 84 and Local Law 97 increase scrutiny on performance. A decline in energy efficiency not only impacts your public grade but may also affect compliance status and potential carbon penalties.
1. Increased Energy Usage Without System Upgrades
One of the most common reasons buildings lose energy grades is rising energy consumption without improvements in infrastructure.
Over time, tenants add more plug loads, install additional IT equipment, increase cooling demands, or extend operating hours. If HVAC systems, lighting systems, and insulation remain outdated, energy use rises while performance declines.
For example, many older New York buildings still rely on aging boilers, inefficient chillers, or outdated control systems. When these systems operate beyond their optimal lifespan, energy waste increases significantly.
Without upgrades such as high-efficiency HVAC systems, LED retrofits, or smart building controls, the building’s Energy Use Intensity (EUI) worsens. As a result, the ENERGY STAR score drops.
2. Poor Data Reporting and Benchmarking Errors
Energy grades depend entirely on accurate benchmarking data. Even small reporting errors can impact your score.
Common mistakes include:
- Incorrect square footage entries
- Wrong property type classification
- Missing fuel data
- Utility billing gaps
- Improper occupancy percentages
Because benchmarking data is submitted annually, any inconsistencies compared to prior years can alter the performance score. In some cases, buildings appear less efficient simply because the data was entered incorrectly.
This is especially common among multifamily buildings and mixed-use properties where shared utilities complicate reporting.
3. Weather Variability and Climate Impact
Weather plays a major role in annual energy performance. A colder winter or hotter summer increases heating and cooling loads.
If a building’s envelope is poorly insulated or windows are inefficient, extreme seasonal conditions drive up energy consumption. While ENERGY STAR adjusts for weather, prolonged extreme temperatures can still influence total energy use.
Climate variability in the northeastern United States has led to noticeable fluctuations in energy demand over recent years. Buildings without energy management strategies feel the impact more strongly.
4. Deferred Maintenance
Routine maintenance is often overlooked in large commercial properties. When preventive maintenance is delayed, system efficiency declines.
Examples include:
- Dirty air filters reducing HVAC airflow
- Faulty dampers and valves
- Leaking steam traps
- Unbalanced hydronic systems
- Outdated thermostats
Small inefficiencies compound over time. A building that once operated efficiently may slowly lose performance year after year due to neglected maintenance practices.
Preventive maintenance programs and commissioning services are critical to maintaining steady energy grades.
5. Changes in Occupancy or Usage
Energy benchmarking systems compare buildings against similar properties nationwide. If occupancy patterns change, your building’s performance profile changes as well.
For example:
- Converting office space to data-heavy coworking space
- Increasing residential density
- Adding commercial kitchens
- Expanding operating hours
These shifts increase electricity and gas consumption. If upgrades do not accompany usage changes, energy grades decline.
Post-pandemic occupancy trends have also created unusual benchmarking fluctuations. Some buildings experienced temporary grade improvements during low occupancy periods, followed by sharp declines when full occupancy returned.
6. Failure to Implement Energy Conservation Measures
Many buildings complete one-time upgrades but fail to adopt a long-term energy management plan.
Energy efficiency is not a one-time project. It requires:
- Continuous monitoring
- Retro-commissioning
- Equipment recalibration
- Utility bill analysis
- Tenant engagement
Buildings that neglect ongoing optimization often see their performance plateau and then decline. In contrast, high-performing buildings actively track energy consumption and adjust operations regularly.
7. Non-Compliance with NYC Energy Laws
New York City’s regulatory environment is evolving. Beyond benchmarking, buildings must now consider carbon caps and emissions limits.
Under Local Law 97, buildings over 25,000 square feet must meet strict greenhouse gas emission limits. As carbon intensity becomes more important than raw energy use, inefficient systems can significantly hurt performance metrics.
Failure to comply with energy audits required under Local Law 87 may also delay identification of performance issues.
Non-compliance does not directly lower grades, but the operational inefficiencies associated with delayed upgrades often result in declining scores.
8. Aging Building Infrastructure
Many NYC buildings are more than 50 years old. Aging envelopes, outdated mechanical systems, and inefficient electrical infrastructure reduce performance over time.
Common infrastructure challenges include:
- Single-pane windows
- Poor insulation
- Steam heating systems
- Inefficient cooling towers
- Outdated lighting fixtures
As systems age, energy intensity increases. Without capital improvements, it becomes difficult to maintain high grades.
9. Lack of Tenant Engagement
Energy performance is not controlled solely by property managers. Tenant behavior significantly impacts electricity and heating usage.
If tenants:
- Leave lights on overnight
- Use personal space heaters
- Operate equipment continuously
- Ignore energy-saving guidelines
the building’s overall performance declines.
Successful buildings implement green lease provisions, tenant awareness campaigns, and sub-metering systems to manage consumption effectively.
10. Market-Wide Performance Improvements
Energy grades are relative. If peer buildings improve significantly, your building’s score may decline even if your energy use remains stable.
As more properties adopt LED lighting, building automation systems, and renewable energy, the benchmarking baseline improves. Buildings that do not modernize fall behind competitively.
This trend is accelerating as sustainability becomes a priority across the United States real estate market.
How to Prevent Energy Grade Decline
To maintain or improve your building’s energy grade, consider the following strategies:
- Conduct annual energy audits
- Verify benchmarking data accuracy
- Upgrade HVAC and lighting systems
- Implement building automation systems
- Schedule preventive maintenance
- Engage tenants in energy reduction programs
- Monitor energy use monthly, not annually
- Plan for carbon compliance under NYC regulations
Working with experienced energy consultants can help identify inefficiencies before they impact public grades.
Why Energy Grades Matter for Building Owners
Energy grades affect more than compliance. They influence:
- Property value
- Tenant attraction and retention
- Financing opportunities
- Corporate ESG reporting
- Public reputation
In competitive markets like New York City, sustainability performance directly impacts leasing decisions. Investors and tenants increasingly prioritize energy-efficient buildings.
Final Thoughts
Buildings in New York City lose energy grades every year for a combination of operational, technical, and compliance-related reasons. Rising energy consumption, deferred maintenance, reporting errors, aging infrastructure, and regulatory changes all contribute to declining performance.
Energy efficiency is not static. It requires continuous monitoring, strategic upgrades, and proactive compliance management.
For property owners across the United States—especially those managing assets in NYC—maintaining a strong energy grade is no longer optional. It is essential for long-term financial performance, regulatory compliance, and competitive positioning in an increasingly sustainability-focused market.
