Piedmont Service Group - An HVAC Blog

4 Reasons Why an Energy Star Rating is Good for Business

Published: May 19, 2016

Energy Star is “the most successful voluntary energy conservation movement in history.”

That’s pretty impressive.

But, is there a real value for businesses to invest in an Energy Star rating for their commercial buildings?

While obtaining an Energy Star rating is definitely a feel good moment, there is a solid business case for doing so as well. Here are the basics:

For a more detailed explanation of how an Energy Star rating would affect your specific building, contact Piedmont Service Group today.

1. Energy efficiency = cost savings

There’s no denying the fact that the cost of heating, cooling, lighting, and otherwise powering a commercial building can be staggering. When you consider that up to ⅓ of the energy consumed by an average unrated building is wasted due to inefficiencies, it’s easy to put a dollar figure on improving the energy rating of your commercial building.

This figure is different for every building, but it typically results in saving 10 – 30% annually.   Depending on the size and energy intensity of a building, this can represent substantial savings.   Example – if your annual energy spend is $200,000 – the savings is $20,000 to $60,000 and the savings can be more depending on age of building, equipment, and level of historical focus given to energy initiatives.

When you also consider the fact that many of the most effective changes and upgrades needed to improve energy efficiency are relatively inexpensive and quick to perform, the potential savings becomes even more impressive.

As far as a business case goes, you can’t get much more direct. Obtaining an Energy Star rating can make tens to well over hundreds of thousands of dollars appear on your company’s bottom line where it didn’t show up before.

2. Real-World, Educational support

More specific to the Energy Star program itself, the Environmental Protection Agency (EPA) has maintained Energy Star as a volunteer program designed to make energy conservation simple and intuitive.2000px-Energy_Star_logo.svg.png

As part of that effort, they make educational materials available for every imaginable application of energy saving principles. These include case studies, statistics, benchmarks for most industries, and access to experts who have already been down the trial-and-error road and successfully implemented energy savings in real-world commercial situations.

Years of lessons learned are all wrapped up in solid material like the Energy Star Guidelines for Energy Management, which you can download, free of charge.

From a business case standpoint, this translates to less time and money spent figuring out how to save, and more focused and strategic investment in making it happen.

3. Higher Rents and Occupancy

Based on independent academic research, commercial buildings that have obtained an Energy Star certification have been found to enjoy higher rental rates, increased asset value, increased occupancy rates, and greater marketability in comparison with equivalent commercial buildings that have not done so.

And these differences aren’t tiny, either. Various studies have placed the difference as high as:

  • 16% for rental rate premium
  • 6% for occupancy rate premium
  • 31% for sale price premium

Once again, these figures can be counted in the millions for many companies, and these benefits last years into the future.

4. There is real dollars-and-cents value in doing the right thing

While it’s not true of every worthy cause your company supports, conserving natural resources and adopting sustainability practices has proven to be a commercially viable marketing strategy.

As environmental issues and sustainability have become more widely known and understood among the public, consumers have begun to voice their desire for a cleaner and sustainable future through their buying habits. For example, according to a Nielsen survey involving millennials’ purchasing decisions, sustainability came across as one of the key deciding factors in which companies this huge generation chooses to support.

Another survey by BBMG determined that 36.4% of customers consider themselves “conscious consumers” who factor environmental responsibility heavily in their buying decisions.

Without a doubt, then, placing the Energy Star seal on your commercial buildings and letting the world know that your company takes ecological responsibility and sustainability seriously can win you customers.

With these basic points in mind, you can see that there is a real-world financial value in obtaining an Energy Star certification for your commercial building. It makes good business sense, and it’s the right thing to do.

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