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New York City just became the first city in the United States to require commercial and residential buildings to publicly post “energy efficiency grades.”

Requiring buildings post their energy efficiency grades is an important step in New York City’s commitment – the 80 x 50 commitment – to reduce citywide greenhouse gas (GHG) emissions 80% below 2005 levels by 2050. Buildings are responsible for almost 70% of citywide GHG emissions, so reducing the emissions from the City’s building stock is essential to meeting the 80 x 50 commitment.

Energy efficiency is the cheapest and quickest way to reduce those emissions. It has the potential to reduce overall energy use in buildings by 46% by 2050. Energy efficiency also provides significant non-energy benefits, such as reduced energy bills; improved indoor air quality; improved comfort, health, and safety of tenants or employees; reduced health-care costs; reduced illness and fewer sick days; increased property value; and decreased maintenance costs. Energy efficiency also has been shown to create local jobs.

Mandating that large buildings in New York City post energy efficiency grades builds on the City’s previous efforts to reduce GHG emissions from its building stock. Since 2009, New York City requires buildings larger than 50,000 square feet to annually measure and report their energy usage. In 2018, this measure-and-report requirement —known as benchmarking — will be expanded to include buildings that are larger than 25,000 square feet. Benchmarking helps building owners assess the efficiency of their building, compare the efficiency of their buildings with other buildings, and track and lower energy usage.

Now, the over 25,000 square foot buildings in the City will also be required to publicly display their level of energy efficiency by posting their “energy efficiency grade.” Council Member Dan Garodnick, who co-authored the legislation, explained, “Just as restaurants post their health grades and cars advertise their fuel efficiency, buildings will begin posting letter grades corresponding to their energy efficiency scores.”

The publicly posted energy efficiency grades will provide consumers with easily accessible information on a building’s energy efficiency score and allow consumers to make informed decisions on where to live, work, and shop. Public posting of grades will also provide an incentive for building owners to increase the energy efficiency of their buildings in order to achieve better energy grades and attract tenants and shoppers, as well as reduce costs and provide a more comfortable, healthy, and safe building.

There are three additional steps that the City should take in order to maximize the impact of energy efficiency grades. First, the City should translate the grades into easy to understand information on energy burden, indicating how much, in addition to rent, it will cost a tenant to live in the building. Second, the City should target the worst performing 10% of the buildings for special energy efficiency incentives, education, and outreach efforts. Third, the City should initiate a city-wide “look for the grades” education campaign.