Building rating and labeling programs have been around for many years and have been used for many different purposes across the globe. Examples of such rating systems domestically include the US Green Building Council’s LEED program, Energy Star Portfolio Manager (ESPM), RESNET’s Home Energy Raters System (HERS), and ASHRAE’s Building Energy Quotient (bEQ); in Europe, the Energy Performance of Building Directive (EPBD); and in Australia, the National Australian Built Environment Rating System (NABERS). In addition, several cities in the US are leading the way in building labeling efforts through the Institute for Market Transformation, including New York City, Washington, DC and Austin, TX.

To date, however, most of these programs have focused on Operational Ratings.  While such programs do provide value in efforts to improve efficiency, the Massachusetts Department of Energy Resources recently launched a Commercial Building Energy Asset Labeling (BEAL) Pilot Program, with a goal of informing the US DOE’s National efforts.

This post will discuss some of the differences between Asset and Operational Ratings, as well as some key success factors required to enable Asset Rating Programs to drive true change in commercial building energy efficiency management.

Why Asset Rating?

According to the Massachusetts Department of Energy Resources (DOER), “Building energy asset ratings are designed to facilitate direct comparisons of energy performance among similar buildings. In contrast to operational ratings, which are based on actual energy use (i.e. energy billing data), asset ratings evaluate the energy performance of the building based on the thermal envelope (e.g. insulation, windows) and mechanical and electrical systems, irrespective of tenant behavior. The goal of asset ratings is to educate stakeholders and enable the real estate market to value energy performance, thereby increasing investments in energy efficiency…. In the absence of an established U.S. commercial building asset rating program, efforts in the U.S. have focused solely on operational ratings.”

The table below from ASHRAE’s Building Energy Labeling Program: Implementation Report June 2009 summarizes key differences between Operational Rating (OR) and Asset Rating (AR) in more detail. According to the Department of Energy, OR and AR different, but they are complimentary in achieving building energy outcomes.

Is Asset Rating a new buzz word or a true driver of transformation in building energy consumption?

In our view, the short answer is, it depends. Below are some of the critical success factors that we believe would make BEAL a true driver of transformation.

• Technical scale vs. statistical scale. It must be based upon a technical rating scale, which compares a building’s performance to technical reference points, for example Zero Net Energy, building code and or published standards (e.g. ASHRAE 90.1).
• Reasonable targets. Identify reasonable, fixed, targets by building type. For example, utilize energy modeling to establish targets by building type and/or utilize DOE established benchmarks by building type. Do not rely on a statistical scale that establishes a building’s rating based upon a comparison to other building’s energy performance.
• Normalization of operational characteristics. An asset rating must normalize for operational parameters such as climate, operating hours, occupancy, plug loads, and outdoor air ventilation rates.
• Cost and scalability. Utilize information technology and modeling tools to automate the process, improve consistency, reduce the cost and enable building rating to be performed at scale.
• Labeling. Simplicity is important when considering the various stakeholders with varying degrees of sophistication and interest – building engineers, real estate appraisers and owners, tenants and citizens. Consider a scale that converts modeled energy use into a grade (similar to ASHRAE bEQ) or an indexed scale (similar to HERS)
• Energy Efficiency Recommendations. To make an asset label effective in leading to greater energy efficiency investments, it is critical to ensure that building owners and operators are provided with recommendations on where the significant opportunities to improve energy performance exist, and possible options for achieving such improvements.
• Post Implementation Verification. Provide a system for verification that implemented retrofits are providing the desired benefits.
• Complemented by good operational practices. In order to maximize energy savings, installed building components as may evaluated by an Asset Rating program, must be complemented by good operational and maintenance practices as may be evaluated by an Operational Rating.

We are excited to monitor the developments of BEAL and other Asset Rating programs and the impact they may have in the years to come.