December 4, 2019

Impact of Energy Benchmarking and Disclosure Policy on Office Buildings

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Abstract:
Building energy benchmarking policies require owners to publicly disclose their building’s energy performance. In the US, the adoption of such policies is contributing to an increased awareness among tenants and buyers and is expected to motivate the owners of less efficient buildings to invest in energy efficiency improvements. However, there is a lack of studies specifically aimed at investigating the impact of such policies on office buildings among major cities through quantitative analyses. In response, this study evaluated the effectiveness of the benchmarking policy on energy efficiency improvements decision-making and on real estate performances, by applying two interrupted time series analyses to office buildings in downtown Chicago. The initial results indicate a lack of statistically strong evidence that the policy affected the annual vacancy trend of the energy efficient buildings (represented by ENERGY STAR labeled buildings). However, the use of interrupted time series in a more in-depth analysis shows that the policy is associated with a 6.7% decrease in vacancy among energy efficient buildings. The study proposed a method to quantitatively evaluate the impact of energy policies on the real estate performance of office buildings, and the result confirms the positive impact of energy-efficient retrofits on the real estate performance. The study findings support the reasoning behind the owners’ decision in implementing energy efficiency improvements in their office buildings to remain competitive in the market.

Authors:
Luming Shang, Hyun Woo “Chris” Lee, Sofia Dermisi, Youngjun Choe