Summary Report

Policy Options Workshop:

Accelerating Energy Efficiency in
Commercial Buildings
November 29, 2011  Washington, DC

Sponsored by the
U.S. Department of Energy, Office of Policy and
International Affairs
and
Oak Ridge National Laboratory

Prepared by
Energetics Incorporated
Columbia, Maryland 21046
Table of Contents

Disclaimer ............................................................................................................................................... 1
Workshop Overview ................................................................................................................................ 2
Background ......................................................................................................................................... 2
Process ................................................................................................................................................ 2
Background ......................................................................................................................................... 2
Objectives ........................................................................................................................................... 3
Barriers and Challenges to Energy Efficiency in Commercial Buildings...................................................... 4
Information ......................................................................................................................................... 6
Overload of Federal Program Initiatives ........................................................................................... 6
Lack of Data Access, Consistency and Transparency ......................................................................... 6
Insufficient Skills and Knowledge ..................................................................................................... 6
Lack of Awareness of Opportunities and Benefits............................................................................. 7
Economic / Financial ............................................................................................................................ 7
Uncertainty of Return on Investment (ROI) / High Upfront Costs ..................................................... 7
Financial Practices and Models ........................................................................................................ 8
Conflicting Incentives....................................................................................................................... 8
Regulatory ........................................................................................................................................... 9
Poor Code Compliance / Enforcement ............................................................................................. 9
Lack of Integrated Resource Planning (IRP) ...................................................................................... 9
Potential Policy Options and Measures for Federal Action and Study ..................................................... 10
National Strategy and Priorities for Energy Efficiency in Commercial Buildings................................... 12
Background ....................................................................................................................................... 12
Expanded Information Disclosure Requirements for Buildings ........................................................... 13
Code Enforcement and Compliance for New and Existing Buildings ................................................... 14
Appendix A: List of Workshop Participants............................................................................................. 15
Appendix B: Workshop Agenda ............................................................................................................. 16
Appendix C: Plenary Discussions ............................................................................................................ 17
 Policy Options Workshop: Accelerating Energy Efficiency in Commercial Buildings 2011

Disclaimer

This report was prepared as an account of a workshop sponsored by the U.S. Department of Energy,
Office of Policy and International Affairs, together with Oak Ridge National Laboratory, and held
November 29, 2011. The purpose of the workshop was to review the commercial buildings policy
context, explore non-technical barriers to energy efficiency in commercial buildings, and develop
feedback on possible policy options and measures that the Federal government could implement to
promote greater energy efficiency in the commercial buildings sector. The results reported herein are
intended as input to and support of ongoing work of the U.S. Department of Energy, Office of Policy and
International Affairs, and Oak Ridge National Laboratory. The views and opinions expressed in this
report do not necessarily state or reflect those of the U.S. Department of Energy or Oak Ridge National
Laboratory.

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 Policy Options Workshop: Accelerating Energy Efficiency in Commercial Buildings 2011

Workshop Overview

Background
Over the long term, commercial buildings are expected to continue to be a significant contributor to
growing global energy demand, driven in large part by continuing economic growth. Reducing energy
demand in the commercial buildings sector can play an
The U.S. commercial buildings sector. .
important role in achieving U.S. goals related to expanded
. . . accounts for more than 18% of
clean energy deployment, increased economic growth,
primary U.S. energy demand. The sector
and reduced greenhouse gas (GHG) emissions.
is also a major source of energy-related
Policies and measures that stimulate investments in greenhouse gas (GHG) emissions,
energy efficiency, provide greater information to the mainly CO2 (EIA, Annual Energy Outlook
sector, induce behavioral changes, and shift design, 2011).
construction and purchase decisions can offer means to
deliver rapid reductions in energy consumption and associated GHG emissions. According to a recent
inventory (Inventory of Greenhouse Gas Reducing Technology Deployment Activities,
http://www.climatetechnology.gov/), approximately 105 Federal activities are currently encouraging
more efficient use of energy in commercial buildings. However, improvements to these policies and
measures as well as the implementation of new options may be required to effectively address
economic and practical barriers to more rapid adoption of energy-efficient technologies and practices in
the commercial buildings sector.

The U.S. Department of Energy (DOE) Office of Policy and International Affairs, together with Oak Ridge
National Laboratory (ORNL), hosted a workshop on November 29, 2011, in Washington, DC, to explore
the possible need for new and improved policies and measures. The purpose of the workshop was to
review the commercial buildings policy context, explore non-technical barriers to energy efficiency in
commercial buildings, and develop feedback on possible policy options and measures that the Federal
government could implement to promote greater energy efficiency in the commercial buildings sector.

Process
A facilitated, roundtable discussion was held among invited experts over the course of a one-day
workshop. Attendees included representatives from business, academia, non-government
organizations, national laboratories, government agencies, and trade associations. The workshop
commenced with plenary presentations from DOE, ORNL, Lawrence Berkeley National Laboratory,
American Council for and Energy-Efficient Economy, and the Georgia Institute of Technology. After the
opening presentations, participants engaged in a facilitated brainstorm session to identify non-technical
barriers to more efficient use of energy in commercial buildings, and then voted on the most important
barriers. Speakers then reviewed lessons learned on buildings sector policies and measures and offered
a framework to workshop participants for evaluating Federal policy options. A final brainstorm session
identified Federal policy options and measures to overcome non-technical barriers. From these a small
set of priority options were selected as most promising by participants, and subjected to further
discussion and refinement.

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 Policy Options Workshop: Accelerating Energy Efficiency in Commercial Buildings 2011

This workshop summary report includes a full list of participants (Appendix A), the agenda (Appendix B),
and list of plenary presentations list (Appendix C).

Objectives
The workshop set out to achieve a few key objectives:

• Review the policy context for energy efficiency in commercial buildings

• Present current thinking on opportunities for energy efficiency gains in the sector and review
lessons learned on existing policies and measures

• Identify non-technical barriers to more efficient use of energy in commercial buildings

• Brainstorm a range of potential information, regulatory, and financial/economic policy options

that the Federal government could implement in order to promote energy efficiency in the
buildings sector

• Describe in greater detail the Federal policy options and measures that were identified as
having significant potential impact by participants and the actions needed to develop the
proposed options

This workshop addressed only non-technical barriers (e.g. market, institutional, and policy) to energy
efficiency. The barriers and policy options discussed were primarily economic, financial, regulatory, and
behavioral in character. Research and development was not covered during the workshop.

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 Policy Options Workshop: Accelerating Energy Efficiency in Commercial Buildings 2011

Barriers and Challenges to Energy Efficiency in Commercial Buildings

A number of non-technical barriers were identified that hinder adoption of energy-efficient practices
and investment in energy-efficient technologies in commercial buildings. A complete list of ideas
generated during the discussion is provided in Table 1 below. A summary of key barriers that received
the most votes follows directly after Table 1.

Table 1. Non-Technical Barriers to Advancing Energy Efficiency in Commercial Buildings

( = one vote in favor)

Topic Barrier
Information

Overload of Confusing proliferation of DOE (and EPA) program initiatives (e.g., ARRA/Better Buildings, Better Building
challenge, SEP/commercial, SEE-Action, CBI/Commercial Building Energy Alliances, etc.!, ENERGY STAR®
Federal Program Buildings). 
Initiatives
DOE messages and priorities are not sufficiently clear.
Lack of a one-stop-shop for energy efficiency projects.

Lack of Data Insufficient access to utility billing data. 

Access, Inability to agree upon common data to demonstrate effectiveness across sectors. 
Consistency and Ignorance of what drives energy use (e.g., one bill that hides a multitude of uses) makes it difficult to manage what
Transparency you cannot measure. 
Lack of standard metrics. 
• Standard whole building energy metrics for building life cycle.
• Metrics to assess building system performance.
Lack of energy efficiency information (building-specific, building-segment, and economy-wide). 
Lack of data on human behavior costs vs. electricity operational costs. 
Too many energy use intensity definitions. 
Too much energy efficiency information that is not easily understood.

Insufficient Skills Lack of expertise on how to design and retrofit for high performance buildings (e.g., integrated design). 
and Knowledge Inability to look at buildings as part of a “community” and across portfolios (lack of holistic thinking). 
Tendency to focus on individual technology but not on interactions to demonstrate overall outcome.
Lack of knowledge on who impacts energy use in commercial buildings and how to influence them.
Lack of organizational expertise to evaluate and implement projects.
Gaps in the needed energy team within an organization – one champion can do a lot, but needs help in a complex
organization.

Lack of Lack of an internal energy manager empowered to change operational practices that save energy. 
Awareness of Occupants limited awareness and motivation to initiate or support building energy efficiency. 
Opportunities Lack of awareness about the cost of delaying energy efficiency improvements. 
and Benefits
Lack of awareness of opportunities.
Lack of understanding the need for operational feed-back.

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 Policy Options Workshop: Accelerating Energy Efficiency in Commercial Buildings 2011

Table 1. Non-Technical Barriers to Advancing Energy Efficiency in Commercial Buildings

( = one vote in favor)

Topic Barrier
Divided decision-making: operator may know what to do but may not feel empowered to make change due to lack
of upper-management support.
Lack of information and knowledge on the connection between energy and water and their mutual impacts.
No mechanisms for competition between buildings based on energy consumption.

Economic/Financial

Uncertainty of Inability to meet financial return on investment (ROI) expectations. 

Return on • High first costs reduce ROI.
Investment (ROI) • Disagreement over which party benefits from ROI.
/ High Upfront Lack of access to funding for investments. 
Costs Limited risk tolerance in today’s markets especially extrinsic risk. 
Many technologies are not cost effective. 
Uncertainty of savings from investments in energy efficiency. 
Existing Policies subsidizing domestic energy prices (making them lower), and therefore reducing the
competitiveness of energy efficiency. 
Energy cost and use not linked to business goals and risk reduction strategies often because energy costs are
insignificant compared to other building costs (e.g., $2 per square foot for energy vs. $80 per square foot for rent).
Benefits are not big enough to merit time and investment to understand path forward.

Financial Lack of unbiased economic models to evaluate savings and ROI. 
Practices and Insufficient recognition of building value associated with energy efficiency improvements. 
Models Disconnect between capital and operations budgets that inhibit consideration of the “total cost of ownership”. 

Conflicting Utilities focused on low rates more than low bills; therefore they are less motivated to pursue energy efficiency with
clients – particularly in the high margin commercial sector. 
Incentives
Indifference to energy costs (even in higher cost areas) because the mission of the building is not energy (e.g.,
restaurants sell meals and hospitals cure people). 
Disconnects between design, construction, and operations. 
Investment structures and tax incentives that favor ownership turnover and short-term interests in energy
performance and costs. 
Owner / tenant split incentives.

Regulatory

Poor Code Poor Code compliance for new construction and alterations, especially when building is tenant-occupied. 
Compliance / Lack of code enforcement at the jurisdictional level, and inadequate training of code officials. 
Enforcement Complex building codes.

Lack of Lack of true Integrated Resource Planning (IRP). Codes and other market transformation are especially ignored. 
Integrated
Resource
Planning

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 Policy Options Workshop: Accelerating Energy Efficiency in Commercial Buildings 2011

Information
Overload of Federal Program Initiatives
The multitude of Federal program initiatives for commercial building energy efficiency— in particular at
DOE and the Environmental Protection Agency (EPA)—can be a source of confusion among building
owners, operators, and occupants. This confusion hinders adoption of energy-efficient technologies and
practices. It is difficult for an organization or building operator to compare the costs and benefits of each
program initiative. The administrative burden of joining multiple initiatives or spending the effort to
benefit from them can be quite high. Furthermore, aspects of each Federal initiative overlap reducing
the incentive to join more than just a few. Such a proliferation of program initiatives can also serve to
muddle Federal messages and priorities on commercial building energy efficiency.

Lack of Data Access, Consistency and Transparency

Lack of accessible, understandable, and high-quality data can present a significant barrier to increased
energy efficiency in buildings. Most consumers lack sufficient access to utility billing data. This can mean
lack of online access to data, inability to download information about an account, or delays in receiving
requested data. Managing energy consumption becomes a challenge if there are barriers to its
measurement. Making all utility billing data accessible (in an anonymous format) for various purposes
of measurement and analysis is also not possible today. A general lack of energy efficiency information
for particular building types and building segments is another issue. Better information on the energy-
related costs incurred by certain human behaviors in the built environment could also help to clarify
costs and benefits to decision makers.

The issue of common data and standard metrics was identified as a key barrier. Benchmarking and
comparisons can be powerful tools to evaluate energy efficiency opportunities and achievements, and
to spur people into action. The current inability to agree upon common data to demonstrate
effectiveness across sectors hinders such comparisons. Furthermore, the metrics used to measure
energy efficiency are not standard across the sector. Energy use intensity metrics are defined on a case-
by-case basis by each organization or building operator. There is an overabundance of metrics being
used in too many different ways to allow for easy benchmarking and comparisons. There is also a lack of
standard metrics for the building lifecycle as well as metrics to assess building system performance.

Finally, data transparency can be a problem. Energy utility bills typically lack the granularity required to
highlight the multitude of energy uses within a building. Managers and operators are unable to properly
pinpoint the elements driving energy use in any particular building, and therefore are unable choose the
most effective energy efficiency measures.

Insufficient Skills and Knowledge

Insufficient expertise on how to either design new or retrofit old buildings for high performance is a
major barrier to energy efficiency. Part of the problem is a lack of skills and experience in integrated
design and other holistic design principles—the convention has been to focus on the impact of individual
technologies rather than on their interactions to improve overall energy efficiency in a commercial
building. This is related to another problem in the planning and development community: the tendency

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 Policy Options Workshop: Accelerating Energy Efficiency in Commercial Buildings 2011

to look at buildings as individual entities rather than part of a community or a broader portfolio of
structures.

Most organizations lack a clear picture of who impacts energy in commercial buildings and how to
convince them to change their behaviors. The same organizations often have difficulty evaluating and
implementing energy projects because it is not their core business. Along those lines, because energy
management is typically perceived to be of low importance compared to other issues, organizations
form teams that are too small (often only a single energy champion), and lack the resources or
knowledge to successfully identify and implement energy efficiency opportunities. Moreover, building
operators may not be sufficiently trained or educated in energy management.

Lack of Awareness of Opportunities and Benefits

Commercial building owners, operators and occupants may all lack awareness of the opportunities and
benefits of energy efficiency. Commonly, the problem stems from the lack of an energy manager or
building operator who is authorized to either make investments in energy-efficient technologies or
change operational practices to save energy. This is a difficult barrier to surmount because energy
management is often perceived to be of low importance compared to other organizational priorities and
occupants—i.e. employees—frequently complain to upper management about changes in building
operations that affect their comfort.

Building operators may also not understand the full cost savings associated with energy efficiency due to
a lack of financial analysis skills or reluctance to slightly stretch financial hurdle rates for investments in
energy efficiency projects. Occupants who lease office space may have only partial awareness of actions
they can take to improve energy efficiency in part due to the belief that their impact would be limited.
Many organizations are also unaware that waste reduction in other buildings operations such as water
and waste can have an indirect effect on reducing energy consumption as well.

Economic / Financial
Uncertainty of Return on Investment (ROI) / High Upfront Costs
One of the primary barriers to energy efficiency is that energy is relatively inexpensive and the costs and
risks to organizations for inefficiency are small. This issue is particularly acute in today’s uncertain
market environment where tolerance to risk is low. Even when energy prices are anticipated to be high,
they can fluctuate tremendously, thereby casting uncertainty on potential savings from investments in
energy efficiency. Energy policies that subsidize domestic energy production and distribution serve to
lower energy prices, and therefore further reduce the attractiveness of energy efficiency—organizations
have little incentive to make investments in building energy efficiency when energy costs are low.

Funding—i.e., lack of access to capital, or the prohibitively high cost of capital—is a primary barrier to
investment in buildings energy efficiency. Core business operations and investments are favored over
efficiency projects with uncertain returns when capital is limited.

Hurdle rates—e.g., ROI expectations—for efficiency investments are typically higher than for other
projects because they are not core to company operations. The difficulty in justifying new, more

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 Policy Options Workshop: Accelerating Energy Efficiency in Commercial Buildings 2011

efficient equipment is also exacerbated by the long useful life of large, costly capital equipment (boilers,
generators, coolers, etc.), which is amortized over many years. Even when investments involve smaller,
less costly equipment (lighting, insulation, sensors, etc.), the benefits are often too small to warrant the
time to implement them.

Financial Practices and Models

Economic models used to evaluate savings and ROI on energy efficiency investments often suffer from
one or more problems. Models may be over-generalized and generic utilizing only a few inapplicable
inputs, or they may be based on assumptions and algorithms that do not correctly evaluate the
projected payback of the commercial buildings sector. Business metric benefits may be over- or under-
inflated through selective inclusion or omission of investment costs. Finally, the underlying methodology
of ROI tools is often obscure and lacks transparency.

Ingrained practices in the financial and real estate sectors fail to sufficiently recognize the increase in
buildings’ values associated with energy efficiency improvements. Current mortgage underwriting and
appraisal standards fail to account for energy costs and savings that come from energy efficiency
improvements. Potential purchasers and renters of commercial buildings often under appreciate the
inherent value in more efficient buildings because energy is relatively inexpensive and other purchase
and rental criteria (location, services, comfort, prestige, etc.) trump energy efficiency.

Hard-and-fast rules do not exist for separating capital and operating budgets; therefore organizations
must define their own rules and attempt to follow them in a consistent manner. However, the choice of
whether or not an item is allocated to the annual budget or capitalized can hinder or promote the use of
total cost of ownership analysis. Total cost analysis demonstrates the lifetime costs of acquiring,
operating, and changing something, and often shows there can be a large difference between the price
of something and its long term cost. Items designated for the annual budget rarely receive examination
under total cost analysis, and therefore organizations often under- or overestimate total costs of energy
efficiency investments.

Conflicting Incentives
The design, construction, and operation of commercial buildings involve multiple parties that include
architects, developers, engineers, utilities, owners, and occupants among others. Incentives to invest in
and implement energy efficiency vary widely. For example, designers and architects are rarely
concerned with energy efficiency during the design stage unless actively engaged by developers or
future owners, and developers may not invest in higher cost energy-efficient technologies unless they
believe it will be a strong selling point to potential buyers or occupants.

Amortization schedules and other tax incentives favor turnover of commercial buildings, and therefore
reduce incentives to invest in energy efficiency investments that have longer payback periods. Other
organizational priorities—e.g., if certain business operations consume lots of energy but are core to
company revenue—may result in an indifference to energy costs; even when energy prices are high.

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 Policy Options Workshop: Accelerating Energy Efficiency in Commercial Buildings 2011

Utilities are incentivized to lower their rates to attract and retain customers and have much less
incentive to focus on lowering their customers’ energy bills, which would in turn lower the utilities’ own
revenues. This barrier hampers utility engagement with customers to implement energy efficiency.

Regulatory
Poor Code Compliance / Enforcement
Poor code compliance for new construction and alterations is a notable barrier to energy efficiency in
commercial buildings. Studies have shown a wide variance in compliance with code provisions—such as
the 2009 IECC Chapter 5 for Commercial Buildings—that are intended to ensure the design of energy
efficient building envelopes and systems. The problem is exacerbated when a building is tenant-
occupied. This could be due in part to complex building codes, but it also is due to the disincentive for
shorter term tenants that will not realize the full cost savings by complying with energy efficiency codes
nor the added value of the building asset they do not own.

The flip side of poor compliance is inferior code enforcement. This is particularly severe at the
jurisdictional level. Problems faced by building code officials include lack of manpower; inadequate time
for training needed to ensure that the provisions of an energy code are complied with; guidance
documents and other information materials not readily available to builders, contractors, and trades
people; and the preeminence of other building-code enforcement such as life‐health‐safety codes.

Lack of Integrated Resource Planning (IRP)

The lack of state requirements for utilities to carry out IRP is a large barrier to energy efficiency in
commercial buildings and other sectors alike. Under traditional utility regulation, utilities submit filings
to a regulatory authority detailing their load forecasts and describing the resources that will be required
to meet electricity or gas demands during the forecast periods. Options have historically been limited to
supply more power as opposed to reduce electricity demand.

By incorporating IRP, a utility is required to report its load and resource forecast for a specified period
and utilize the least-cost resource mix, including both supply and demand-side options. When IRP is not
employed, opportunities to integrate energy efficiency as a utility system resource are often excluded
even when energy efficiency is a lower-cost resource than supply-side measures.

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Potential Policy Options and Measures for Federal Action and Study

A number of ideas for potential Federal policy options and measures were generated (see Table 2) by
the workshop participants. From these ideas, participants voted on the options they believed had the
most potential to successfully address the non-technical barriers and drive investment in building energy
efficiency. From this voting process, three ideas emerged that were considered to be of greatest
importance for the Federal government to pursue:

1. National Strategy and Priorities for Energy Efficiency in Commercial Buildings

2. Expanded Information Disclosure Requirements for Buildings
3. Code Enforcement and Compliance for New and Existing Buildings

Each of these three policy option was further expanded in terms of description, elements of the
approach, rationale for Federal involvement, historical experience and lessons learned, barriers
addressed, factors hindering or promoting success, stakeholders and constituencies, potential benefits,
and timing of results. The policy options and measures are summarized in text after the table below.
Neither the suggested options nor the larger set that appears in Table 2 necessarily reflect the views of
DOE or ORNL.

Table 2. Potential Policy Options and Measures for Advancing Energy Efficiency in Commercial
Buildings
( = one vote in favor)

Topic Barrier
Information
National Develop a national commercial buildings strategy or roadmap. 
Strategy, Build national conviction that there is a climate crisis (i.e., get alignment and acceptance that a problem exists
Consistent before forcing a solution). 
Messaging and Initiate a more open dialogue between DOE and stakeholders to obtain feedback from DOE, clarify DOE priorities,
Open Dialogue and discuss ideas. DOE should engage directly on the ground and make better use of staff. 
Launch a public relations campaign branding inefficient buildings as a sickness.
Have DOE work with other agencies (DOL, HHS, DOT, EPA, GSA, Treasury, SBA, and NIST) to develop
comprehensive EE/Building programs.

Benchmarking, Offer a tax incentive to building owners to disclose energy use through EPA’s ENERGY STAR Portfolio Manager.

Reporting and
Disclosure Fund the Commercial Buildings Energy Consumption Survey. 
Increase support for ENERGY STAR benchmarking and reporting initiatives. 
• Support City and State ENERGY STAR benchmarking and disclosure.
• Pay or otherwise incentivize (e.g., tie it to Federal grant requirements) utilities to conduct automatic
downloads into portfolio manager software (open source).
• Publicly disclose ENERGY STAR scores for federally-owned and leased buildings and set improvement
goals.

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Table 2. Potential Policy Options and Measures for Advancing Energy Efficiency in Commercial
Buildings
( = one vote in favor)

Topic Barrier
Support aggregation of existing data and technology validation, and then disseminate the results.
Establish authoritative metrics with stakeholder engagement for energy use intensity, baselines, and reporting.
Systematically capture and aggregate data on technologies, building energy, and financial performance in a central
database.
Couple energy efficiency and demand response into a utility program (e.g., smart meters). Offer subsidies and
models.

Mandated Enact legislation requiring all utility billing data to be contributed to a National Database. 
Information, Mandate disclosure of building energy consumption (broadly applicable to owners and operators). 
Reporting and Formulate legislation to expand utility obligations to include energy benchmarking vs. peers, and publicize findings
Disclosure on the Internet. 

Energy Support ENERGY STAR as foundational platform for measurement, awareness, and management approach. 
Management Provide energy models from a free web service that are tuned to recent energy use for all existing buildings. 
Fund creation of energy monitoring and verification protocols and publicly acknowledge utilities and others for
complying. Include a rigorous monitoring and verification protocol for whole building retrofits. 

Energy Provide free downloads of ASHRAE 90.1, ASHRAE 189.1, and IECC2012. 
Information Write a “Fuel Economy Guide” for buildings: one guide for buildings performance by type and size.
Guides Create a standardized set of “Best Practices” for energy efficiency in buildings that would be peer reviewed by
private sector, academia, etc.

Institutional Found more initiatives akin to the Greater Philadelphia Innovation Cluster (GPIC) for Energy-Efficient Buildings. A
comprehensive research, development, and deployment program that simultaneously addresses the maturation of
Strengthening integrated design and system technologies, exploration of new business models, and public policies that accelerate
the technology adoption, and the creation of robust workforce development paths. 

Workforce Set clear training standards for building operators, and train this workforce for the next generation.
Development Promote the value of skilled technicians and vocational schools, and increase the population’s desire to attend such
schools.
Develop and provide simple, clear, and direct guidance to all Federal agencies with regard to energy efficiency in
Federal buildings.

Building Labeling Identify “future-proofing” features needed in new and renovated commercial buildings to enable future tech
upgrades at lower cost and less hassle.
• Encourage this through incentives, recognition, disclosure and, eventually, codes and standards.

Audits Offer free audits for all building owners and train veterans to conduct them.

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Table 2. Potential Policy Options and Measures for Advancing Energy Efficiency in Commercial
Buildings
( = one vote in favor)

Topic Barrier
Economic/Financial
Loan Guarantees Reduce the upfront cost of energy efficiency investments via Federal programs to induce organizations to invest in
retrofits with longer payback periods. This could be accomplished with upfront financing incentives. Organizations
/ Low-interest can then put savings back into their core business. 
Loans
Establish a Federal loan-loss reserve fund to provide credit enhancement for whole-building retrofits. 
• For example, a loan reserve/ guarantee for municipalities offering Property Assessed Clean Energy (PACE)
to commercial buildings.

Grants and Offer a Commercial Building Grand Prize, a $1 billion award to the first entity or team that delivers 100 near-net-
zero energy buildings (e.g., 70% less consumption than ASHRAE standard) with no subsidies, and with less than a
Awards 4-year payback. 
Better leverage Department of Energy regional offices. Provide more annual energy efficiency block grants to
metropolitan planning organizations and top 20 metropolitan areas.

Regulatory
Building Codes Improve code compliance. 
and Enforcement • Provide funding for outreach efforts to local governments for code enforcement.
• Launch an initiative with various stakeholders (code organizations, states, municipalities, utilities, etc.) to
improve code compliance for modifications to existing commercial buildings.
Institute fixed energy budget requirements in building codes. For example, require that all new builds consume less
energy per square foot than some predetermined standard.

Government Lead a sustained, intergovernmental effort to adopt common energy efficiency specifications for all public
procurement (e.g., ENERGY STAR but expanded to more non-residential products). This could represent
Procurement around15% of the total U.S. market. 
Require that the Federal government only leases space in ENERGY STAR buildings.

Standards and Establish standards for white roofs on buildings.

Labeling Set up a commercial appliance standard modeled after Japan’s “Top Runner” program.

Market-Based Levy a CO 2 Tax that is “tax neutral” (e.g.,, in lieu of payroll tax).
Mechanisms • If the CO 2 Tax is “non-neutral”; direct proceeds to fund up-front R&D and capital cost for energy efficiency
and/or clean energy.
Launch White Tags for energy efficiency credit trading.
• Promulgate a National Clean Energy Standard that includes an energy efficiency component.

National Strategy and Priorities for Energy Efficiency in Commercial Buildings

This option would involve multiple stakeholders along with the Federal government in crafting a
National Strategy and Priorities for Energy Efficiency in Commercial Buildings. The Strategy would create
a shared vision and strategic objectives that would be communicated to the entire nation to reduce
uncertainty and confusion in the market, and therefore increase investment in commercial building

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energy efficiency. Leveraging utility programs and private capital would be paramount to the success of
this endeavor. Implementing the vision could be accomplished in various ways (legislation, state and
local governments, etc.). Workshop participants suggested that the energy, environment, carbon, and
economic benefits could be high if the Strategy is well-crafted and executed.

The initiative would begin with an impact assessment of all existing policies and programs at federal,
state, and local level using Critical Path Analysis1 to formulate, schedule, and manage the various
milestones or activities involved in a research endeavor of this scope. All relevant government, private
industry, and non-governmental stakeholders would be engaged in a sustained dialogue to craft the end
vision and strategic objectives and to execute the Strategy. The roles and activities of each stakeholder
group would be well-defined to avoid overlap and leverage the comparative advantage of each group.
To maintain momentum, national priorities would be communicated regularly and consistently, and
feedback would be provided to stakeholders on achievement of goals. Results of this option would
unlikely be seen in the near term, but the Strategy would include actions and measures for mid-term
impact, and long-term results could be significant.

Expanded Information Disclosure Requirements for Buildings

This policy option would require utilities and building owners to submit commercial building information
to a national database—e.g., EPA’s ENERGY STAR Portfolio Manager. A major challenge for the Federal
government has been the collection of sufficient data on a national level to carry out meaningful
analyses of energy efficiency in commercial buildings. Legislation requiring privacy-protected,
standardized, and comprehensive information disclosure would lay the basis for improved studies and
benefit all types of building energy efficiency programs—e.g., national and state labeling, requirements
of ENERGY STAR leasing and other national, state and local programs. The exact energy, environment,
carbon, and economic benefits are uncertain because they depend on how well the additional
information is utilized, but the policy would lay the foundation for the realization of strong benefits.

A few key information barriers would be reduced with this option. It would lower cost to Federal, state,
and local governments of accessing relevant commercial building energy data; it would strengthen the
ability of governments to improve the effectiveness of building energy efficiency programs; and it would
provide additional information to buyers and renters of commercial building space to make improved
purchase and leasing decisions respectively.

A commercial building information disclosure policy would consist of a number of components.

Disclosure requirements for building owners would include energy consumption data as well as other
relevant building characteristics to enable robust analysis and informed energy efficiency solutions. To
increase data collection efficiency and provide for a comprehensive picture of energy per building
structure, utilities would be required to submit data in electronic format according to a “BIN” (Building
Identification Number) system and aggregate all tenants’ consumption per building. Federal incentives
and support would be provided to owners to increase compliance. Finally, this option would see funding

1
Critical Path Analysis (CPA) is a project management tool that lists all activities required to complete the project; sets the
duration that each activity will take to completion; and shows the dependencies between the activities.

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 Policy Options Workshop: Accelerating Energy Efficiency in Commercial Buildings 2011

reinstated for the Commercial Buildings Energy Consumption Survey and continued support for the
ENERGY STAR Portfolio Manager. Results of this option would not be realized until the midterm, if data
building operators, utilities, and government agencies effectively utilize the data to increase energy
efficiency. Continued energy efficiency gains in the long term depend on continuation of this policy as
well as implementation of additional policies and incentives to induce further energy savings.

Code Enforcement and Compliance for New and Existing Buildings

This option constitutes a basket of policies and measures that the Federal government would implement
to promote code enforcement and compliance at the state level for both new construction and building
modifications when permits are required. There is great uncertainty as to the level of code compliance
across the nation. The Federal government has a strong interest in seeing that commercial buildings
comply with building codes because their main purpose is to protect public health, safety, and general
welfare. Workshop participants suggested that the energy, environment, carbon, and economic benefits
could to be high if execution of this option is reasonably successful.

There are three barriers to commercial building energy efficiency, and possibly others, that would be
addressed by this option. First, state and local government agencies strapped for resources would
receive supplementary funding to tackle code compliance. Second, additional information would be
supplied to government officials, auditors, and building managers to help enforce codes. Third, the
option provides extra incentives, and deterrents, to induce compliance.

The policies and measures that comprise this option cover financial, informational, and regulatory
categories. Additional federal funding would be provided to participating states and local municipalities.
Another financial policy would see the equipment depreciation tax benefit either taken away or reduced
in cases of non-compliance to incentivize building owners to comply. On the other hand, buildings that
exceed current code would be offered accelerated equipment depreciation. Informational measures
would include the Federal government taking a lead role in establishing demonstration programs with
state and local agencies and in disseminating best practices, including workforce guidelines. Regulatory
action would include mandatory, random surveys conducted to ensure compliance, and liability for the
accuracy of certificates of occupancy. The energy savings impact of this option would be immediate; in
particular in the case of new buildings. mid- and long-term results would rely on the implementation of
subsequent codes.

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 Policy Options Workshop: Accelerating Energy Efficiency in Commercial Buildings 2011

Appendix A: List of Workshop Participants

The results reported herein are intended as input to and support of ongoing work of the U.S.
Department of Energy, Office of Policy and International Affairs, and Oak Ridge National Laboratory.
Views expressed in the report (while reflecting the discussion as a whole) should not be attributed to
any single participant or organization.

Last Name First Name Affiliation

Actman Laurie Greater Philadelphia Innovation Center
Ames Mark American Society of Heating and Refrigeration Institute
Amrane Karim Air-Conditioning, Heating, and Refrigeration Institute
Bernstein Harvey McGraw-Hill
Burt Lane U.S. Green Building Council
Colker Ryan National Institute of Building Sciences
Cotchen Donald McGraw-Hill
Diamond Rick Lawrence Berkeley National Laboratory
Harris Jeff Alliance to Save Energy
Hatcher Caterina U.S. Environmental Protection Agency
Lin Diana National Association of State Energy Officials
Lupinacci Jean U.S. Environmental Protection Agency
Majersik Cliff Institute for Market Transformation
Nadel Steve American Council for and Energy-Efficient Economy
Nesler Clay Johnson Controls Inc.
Neumann Justin National Electrical Manufacturers Association
Nicholls Andrew Pacific Northwest National Laboratory
Ostrowski Ken McKinsey & Company
Read Doug American Society of Heating, Refrigerating and Air
Conditioning
Brown Marilyn Georgia Institute of Technology
Cox Matt Georgia Institute of Technology
Sun Xiaojing Georgia Institute of Technology
Hughes Patrick Oak Ridge National Laboratory
Jackson Roderick Oak Ridge National Laboratory
Lapsa Melissa Oak Ridge National Laboratory
Franchuk Charlotte Oak Ridge National Laboratory
Pellegrino Joan Energetics
Blackman Jordan Energetics
Boedecker Erin Department of Energy
Brumbelow Lindsay Department of Energy
Duke Rick Department of Energy
Hogan Kathleen Department of Energy
Mignone Bryan Department of Energy
Taylor Cody Department of Energy

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 Policy Options Workshop: Accelerating Energy Efficiency in Commercial Buildings 2011

Appendix B: Workshop Agenda

Workshop: Federal Policy Options for Accelerating Energy Efficiency in Commercial Buildings
November 29, 2011 8:30 am to 4:15 pm
NREL, 901 D Street, SW, Suite 950, Washington, DC 20024
AGENDA
8:30 – 9:00 am Registration and Continental Breakfast
Rick Duke, DOE Office of Policy
9:00 – 9:20 am Welcome and Objectives and International Affairs
Roderick Jackson, ORNL
Kathleen Hogan, DOE/EERE
9:20 – 9:40 am EERE Perspectives Deputy Assistant Secretary for
Energy Efficiency
Roland Risser, Program Manager,
Overview of DOE/EERE Building Technologies
9:40 – 10:00 am DOE/EERE Building Technologies
Program
Program
The Human Element: Behavioral Factors Affecting Rick Diamond, Lawrence Berkeley
10:00 – 10:15 am
Energy Efficient Choices in Commercial Buildings National Laboratory

10:15 – 10:30 am Break

Facilitated Discussion: Non-Technical Barriers to

Joan Pellegrino, Energetics
10:30 – 11:45 am Commercialization and Deployment of Energy-
Incorporated (facilitator)
Efficient Commercial Buildings Technologies

11:45 – 12:20 pm WORKING LUNCH

Lessons Learned: Past and Current Buildings Sector

12:20-12:40 pm Steve Nadel, ACEEE
Policies and Measures

Framework for Evaluating Federal Policy Options Marilyn Brown, Georgia Institute
12:40 – 1:00 pm
for the Commercial Building Sector of Technology

Facilitated Discussion: Federal Policy Options and

Measures for Overcoming Non-Technical Barriers:
1:00-2:15 pm Financing/Incentives, Information (e.g., Joan Pellegrino
Benchmarking, Disclosures), Regulatory, Utility
Programs, Workforce, Others
2:15-2:30 pm BREAK (flexible)

Small Group Activity: Key Elements of Priority

2:30-4:00 pm Joan Pellegrino
Federal Policy Options and Measures
Bryan Mignone, DOE Office of
4:00 – 4:15 pm Next Steps and Adjourn Policy and International Affairs
Roderick Jackson

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 Policy Options Workshop: Accelerating Energy Efficiency in Commercial Buildings 2011

Appendix C: Plenary Discussions

Welcome: Rick Duke, DOE Office of Policy and International Affairs

Objectives: Roderick Jackson, Oak Ridge National Laboratory

EERE Perspectives: Kathleen Hogan, DOE Office of Energy Efficiency and Renewable Energy

Overview of DOE Buildings Technology Program: Roland Risser, Program Manager, DOE/EERE Buildings
Technology Program

The Human Element: Behavioral Factors Affecting Energy-Efficient Choices in Commercial Buildings:
Rick Diamond, Lawrence Berkley National Laboratory

Lessons Learned: Past and Current Buildings Sector Policies and Measures: Steve Nadel, American
Council for and Energy-Efficient Economy

Framework for Evaluating Federal Policy Options for the Commercial Building Sector: Marilyn Brown,
Georgia Institute of Technology

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