Describing a building as ‘green’ makes a lot of people cringe. The word is overused. And what does it mean exactly?

Serious efforts are underway to move away from the hype and offer a more specific analysis of a building’s energy performance. Think nutritional labels for food, except in kilowatt-hours instead of calories.

In fact, more than 50 national, regional and local governments have created policies to rate and disclose the energy efficiency of commercial buildings, according to the Institute for Market Transformation (IMT). They include the European Union, China, Australia and Brazil.

In the US, two states have such policies, California and Washington, as do five cities: Austin, Washington DC, New York City, San Francisco and Seattle.

These programs already place more than 60,000 buildings, totaling 4.1 billion square feet of floor space, under energy rating and disclosure rules. Meanwhile, Massachusetts is considering standards, as is the city of Portland, Oregon. And many more local and state governments are expected to follow. To help them, IMT this week published a report that details best practices in building labeling.

Why label buildings the way we do food? When a building has an energy performance label, buyers and sellers better understand its market value, IMT says.

“The premise mirrors transparency rules in other market sectors, such as nutritional labels on food and fuel economy ratings on vehicles, which are recognized around the world as consumer protections and keystones of free and fair enterprise,” says IMT, which is a Washington, D.C. group that seeks ways to overcome market failures in the energy efficiency industry.

While building labels may be a good idea, they are not always easy to create. For starters, property owners must be able to access data on how much energy their buildings consume. For large buildings, with many tenants, this can be difficult.  Sometimes tenants have their own electric meters. Building owners must go to each tenant to seek the data, a cumbersome task at best. And some tenants may refuse to supply the information. Here utilities can help, says IMT, by agreeing to aggregate a building’s total energy use and supplying it to the owner (while keeping individual tenant data confidential).

In addition, once the building has a label, the information has to be simple for potential buyers to access. IMT recommends that states post the data on easy-to-navigate web sites that allow searches by address, benchmarking metrics, owner’s name, and traditional real estate characteristics, such as building size.

Two major approaches exist to rate buildings, says the report. Asset ratings “measure the structural energy performance of buildings based on simulated operating conditions.” Operational ratings, on the other hand, measure how much energy a building actually consumes. China tends to use asset ratings, while most US jurisdictions, so far, seem to prefer the operational approach.

How quickly will energy performance labeling catch on? It’s clearly become a hot topic, and the IMT report will help jurisdictions that want to move forward. Still, creating the rules is a state-by-state or even city-by-city effort, as is often the case when it comes to US energy policy. So we may be scratching our heads for awhile about what it means when we hear a building described as ‘green.’

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Comment by Joseph Novella on August 8, 2011 at 9:00am
The fact that we don't even have a lingua franca redgarding building energy ratings shows you how far we have to go. Ask most people what their annual energy costs are and they typically either don't know or can only make a guess. We need an energy analsys tool that will allow any homeowner to sit down, pull out their utility bills and figure out how their home is ACTUALLY performaing. Perhaps if property taxes were prorated on energy consumption home and building owners would be incentivised.

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