New ENERGY STAR Portfolio Manager building performance calculation adjustments, which will take effect on July 22, will cause a slight increase in cold-weather buildings’ ENERGY STAR scores, reflecting feedback from the real estate industry on an unanticipated large drop in ENERGY STAR ratings over the past year.

The new ENERGY STAR formula adds what the U.S. Environmental Protection Agency (EPA) calls “Heating Degree Days” (HDDs). Including HDDs recognizes the intensity of cold-weather temperatures and impacts of weather events such as blizzards and cold snaps. This adjustment was considered in the last metrics review in 2018; at the time, it was thought that there was no statistical significance to the metric and it was not added. However, after feedback from building owners and property managers, along with reviewing actual scores, the EPA recognized that cold-weather buildings were scoring lower on average than buildings in warm-weather climates, and the current model did not adjust for this variation.

With these changes that occurred last fall, building owners in cities such as Boston and Chicago who saw an especially significant drop in their scores last fall could see between a four- to nine-point increase in their ENERGY STAR scores, while building owners in New York City may have their scores rise anywhere from three to seven points. In comparison, ENERGY STAR scores in warmer cities such as Los Angeles may not rise at all. With these new adjustments, the EPA hopes that scores will more accurately reflect building performance.

Because the score update analysis and adjustment are complete, ENERGY STAR will reinstate certifications for office buildings starting July 31. It is important to note that due to the Portfolio Manager software’s order of operations, if a property wants to retroactively obtain its 2018 ENERGY STAR building certification, it must complete the 2018 process before moving forward with 2019 certification.

The real estate market’s collaboration and engagement during this review process have served to strengthen its relationship with the EPA and ensure that ENERGY STAR continues to deliver the best outcomes for the environment and for business.

“It is fantastic to see a voluntary government program like the EPA’s ENERGY STAR Portfolio Manager partner so well with the private sector to ensure that building performance is properly reflected,” says Marta Schantz, senior vice president of the ULI Greenprint Center for Building Performance. “This adjustment to the score change reflects the real estate market’s input on considerations of cold-climate building energy usage, and the associated increase in the ENERGY STAR score for applicable office properties is a welcome change.”