How To Incentivize Tenants To Share Energy Data
Key Takeaways
Saving money on energy costs requires tenant engagement because up to 80% of usage comes from tenant spaces.
Climate reporting and ESG disclosure can be expedited by sharing energy use data.
Without tenant buy-in, energy efficiency measures will have a limited end-use impact.
In commercial real estate, energy management is made difficult by the fact landlords have little control over how energy is used. Telling tenants how to use energy creates problems, but sharing how much energy is being used is a path toward solutions. A building’s plug load is essentially anything in a tenants’ space using an outlet, which accounts for roughly 30-50% of total energy consumption. All told, roughly 60-80% of the energy consumed by a building is attributable to tenant spaces. Both landlords and tenants are best served by sharing energy data with each other, which is becoming even more important in light of proliferating climate reporting requirements.
By creating incentives for tenants to share energy data with their landlord, meaningful energy conservation measures and use reduction efforts can gain the traction they need among tenants and end-users to drive down costs and emissions. A Department of Energy study looking at tenant engagement found hosting an energy-saving competition between tenants saved 245 competitors 240 million kBtu of energy and $5.2 million on utility bills.
Energy Laws
Building benchmarking and climate reporting laws are rapidly expanding. Assets are already being graded on energy efficiency and sustainability efforts. New climate disclosure laws and ESG initiatives are making energy data an essential part of due diligence for investors, landlords, and tenants. Sharing energy use data with landlords can help expedite reporting and compliance for all stakeholders which in turn leads to better efficiency enhancement and reduction strategies. Let’s break down some ways to start a positive conversation with tenants that incentivize sharing energy data.
Tenant Communication
Open, transparent lines of communication are the foundation. Start by sending a letter or email to tenants explaining the voluntary opportunity. In the letter, layout that the building is implementing a strategic plan to track and improve energy performance. To begin that process, the building must first benchmark its current use, which is best achieved by including tenant energy consumption data. By providing past utility bills or authorizing utility providers to share energy data directly with building management, tenants can help the building achieve higher performance grades, and may lead to certification eligibility through Energy Star or LEED. To help get the conversation started, Energy Star has put together starter kits.
Data As An Amenity
For landlords, the value of tenants sharing energy data is in determining how tenants use their space, identifying opportunities for improvements, and educating about reduction strategies. Detailing the benefits of sharing energy data is key to incentivizing it. Sharing is a two-way street. In return for sharing energy use data with a landlord, landlords will share energy demand and consumption data with a business, showing tenants their real-time carbon footprint for their own reporting.
Given the right information, Nantum OS can provide tenants with downloadable energy breakdowns, tracking reduction and efficiency measures that can put tenants on a path toward net-zero emissions. That data can help tenants understand their workforce and space utilization needs better, leading to smarter decisions and better outcomes for all parties.
Building owners can even help reduce the overall energy footprint and decrease utility costs through automated demand management (ADM) and automated demand response (ADR). Both processes monitor usage in real-time, communicating with the grid and energy supplier to avoid peak demand pricing and protect the integrity of the grid. Providers offer ADM and ADR incentives on top of what building owners may offer tenants.
Insight
Reaching out to tenants to share energy use data empowers them with an active role in improving building-wide efficiency. Collectively establishing building energy goals and backing reduction targets with financial incentives is one of the most important paths to net-zero emissions. If buildings are to become carbon neutral, landlords and tenants must work together.
