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Energy Ratings Hit Commercial Real Estate – California Lights the Way | Author: Jonathan Cahill

Energy Ratings Hit Commercial Real Estate – California Lights the Way | Author: Jonathan Cahill

The Energy Star Program has been extremely successful for consumer appliances and electronics, but can this success translate to commercial real estate? In the United States, commercial buildings account for nearly nineteen percent of energy-related carbon dioxide emissions. Consequently, energy rating of buildings has become an increasingly attractive way to combat pollution and lower energy consumption. Despite this, the United States does not yet have a federal policy requiring energy usage disclosure for buildings. This has left state and local governments to lead the way in innovative and effective reporting regimes. California’s response to this regulatory vacuum is Assembly Bill 1103 (AB 1103), which requires commercial buildings to be rated using the Environmental Protection Agency’s Energy Star Program. While AB 1103 has yet to go into effect, its success can be predicted by the advances and setbacks experienced by similar legislation internationally. This article contrasts existing commercial energy rating systems against AB 1103 in an attempt to project its potential successes and pitfalls.

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