Strategic Decarb 101

The Role of Design Charrettes in Building Decarbonization Planning

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As the world grapples with the urgent need to reduce greenhouse gas emissions, the built environment has become a critical focus area to deliver progress. Buildings are significant contributors to global carbon emissions, and transitioning to more sustainable, low-carbon operations is essential for meeting climate goals. Planning for that transition now, through a thoughtful and rational approach, is key to achieving success over time.  

Design charrettes are an important tool project teams can use to support their decarbonization planning work. These collaborative design review workshops bring together diverse stakeholders to develop and refine strategies for reducing carbon emissions from buildings over time.  

What is a Design Charrette?

A design charrette is an intensive, multi-disciplinary workshop aimed at finding and refining solutions to complex problems. The term originated in 19th century Paris and refers to the practice of design students working intensely on their projects until the last minute, when a cart or “charrette” would be wheeled around to collect their final designs. The term has evolved to describe collaborative sessions that bring together developers, designers, domain experts, community members, and an array of other stakeholders to reach mutually beneficial outcomes. In the context of building decarbonization, design charrettes facilitate the rapid development of actionable (and at times substantially more innovative) strategies to reduce emissions from buildings, with alignment among multiple interested parties.  

Why Use Design Charrettes to Achieve Resource Efficient Decarbonization?

  1. Collaborative Problem-Solving: Building decarbonization requires input from a wide range of experts, including architects, engineers, asset managers, environmental scientists, and community leaders. A design charrette brings these diverse voices together in a collaborative setting, ensuring that all perspectives are considered. 
  2. Intensive Focus: The concentrated nature of a charrette allows participants to delve deeply into the problem at hand. Over several hours (or days), stakeholders can explore various scenarios, analyze data, and develop detailed plans that might otherwise take months to create using traditional methods. 
  3. Iterative Process: Charrettes are designed to be iterative, with multiple rounds of feedback and refinement as needed. This approach ensures that the final outcomes are well-vetted and robust, with broad support from all stakeholders. 
  4. Creative Solutions: The collaborative and open nature of charrettes fosters creativity and challenges deeply held assumptions about how to approach a problem by the charrette participants.  Participants are encouraged to think outside the box and develop innovative solutions that might not emerge in a more conventional planning process. 
  5.  Achieving Resource Efficient Decarbonization (RED): Charrettes enable stakeholders to develop highly strategic plans to transition a building away from on-site fossil fuel over time in a way that does not diminish high-performance operations, contains operating and capital expenses, and maintains a complex urban systems perspective including considerations relating to infrastructure and natural resources.

The Design Charrette Process

Charrettes are conducted just after a decarbonization concept plan is created and initial decarbonization measures are framed. A successful charrette requires being prepared to discuss the existing conditions of the building in detail, various decarbonization measures and approaches considered, and an understanding of the social and market conditions influencing the building owner’s decision making. The charrette process includes: 

  1. Preparation: Successful charrettes require careful preparation. This includes identifying key stakeholders and inviting them to join, gathering relevant data, and setting clear objectives for the workshop.  
  2. Workshop Session: During the charrette, the project team presents their building existing conditions and decarbonization approaches and engage in brainstorming, design review, and business discussions with a team of technical experts and industry leaders.
  3. Iteration and Feedback: Ideas generated during the sessions can be reviewed and refined through multiple rounds of feedback and additional charrettes as needed. This iterative process helps to improve and perfect the proposed solutions. 
  4. Implementation and Follow-Up: The final step is to translate the charrette outcomes into a formal strategic decarbonization plan and business case that leads to real-world actions. This may involve further planning, securing funding, and ongoing community engagement. 

Design charrettes are a powerful tool for addressing complex decarbonization challenges, especially in the planning and early implementation phase. With collaboration, creativity, and iteration, charrettes enable the development of effective and sustainable strategies to reduce carbon emissions from buildings.

Want to review your decarbonization plan with our team of experts?

Request a design charrette.

Strategic Decarb 101

Empire Building Challenge Overview

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Through the Empire Building Challenge (EBC), NYSERDA is supporting forward-thinking leaders in the real estate and engineering industries, in the quest to find workable and scalable, cost-effective approaches to retrofit tall, complex, and hard-to-decarbonize buildings in New York. Partners and projects funded through the flagship $50 million demonstration program are working to reach a zero-emissions future. The groundbreaking work of these leaders is presented in this Playbook, which showcases a novel, compelling framework that can unlock opportunities for decarbonizing most buildings in a cost-effective manner, over time. We call the framework Resource Efficient Decarbonization.  

To date, NYSERDA has partnered with 27 commercial and multifamily real estate owners who have committed to eliminate carbon emissions from some of New York State’s tallest and most iconic buildings. These partners have pledged to decarbonize over 128 million square feet of space, and more than 3,500 units of affordable housing. The scale of these partner commitments and the early success of EBC demonstration projects sends a clear signal that New York’s real estate industry is ready to accelerate investment in the buildings of the future.  

Beyond these commitments, EBC partners collectively control and manage over 400 million square feet of real estate in New York.  This amounts to over 20% of commercial office space in New York City, and more than 200,000 housing units throughout the State, representing a potential for impact much greater than the sum of its parts.  The lessons learned during the planning, design, and implementation of EBC projects pave the way for the most viable solutions to gain traction and scale throughout the State, reinforcing progress toward the Climate Leadership and Community Protection Act’s goal to reduce greenhouse gas emissions 85% by 2050. 

Discover the Empire Building Challenge

Visit NYSERDA EBC Site Explore Pitch Deck
View Launch Webinar

Read About Real-World Impact

Understand the real-world implications and successes of the Empire Building Challenge through this in-depth article, “How to get New York City’s biggest buildings to zero carbon,” by Canary Media. This piece highlights the practical steps and measures being taken to reduce carbon footprints across New York’s architectural landscape, showcasing the challenge as a beacon for carbon-neutral aspirations worldwide.

Source: NYSERDA, Building Energy Exchange, Canary Media

Assessment Tools

Strategic Decarbonization Assessment (SDA) Tool

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Insights from the Empire Building Challenge

The Strategic Decarbonization Assessment calculator is a valuable tool that allows building owners and retrofit teams to align their asset decarbonization strategies with their capital investment strategies. The SDA is designed to integrate assessment of multiple requirements including optimizing net present value, replacing equipment close to end of life, avoiding compliance fees, and coordinating electrification of fossil fuel equipment with future electric grid decarbonization. 

The SDA is a long-term financial planning tool for building owners to manage carbon emissions and energy use. During the Empire Building Challenge program, the tool guided participants in refining their decarbonization scenarios and identifying the most cost-effective decarbonization plans. Several teams were able to show positive net present value for their decarbonization plans compared to business as usual. This process can benefit many buildings and property owners in New York in better quantifying, representing, and identifying optimal decarbonization scenarios.

The SDA tool was built by Arup and Ember Strategies. It was previously developed for the San Francisco Department of the Environment and modified for NYSERDA use in the Empire Building Challenge.

Download SDA Overview

User Advisory

The SDA tool was created as the one-stop shop for the development and modeling of the business case that supports initiating a decarbonization roadmap. The SDA tool below was developed based on ASHRAE Standard 211 normative forms with a variety of users and use cases across the United States in mind. 

The tables and charts on the “Summary (Print Me)” tab outline assumptions, costs, savings, decarbonization trajectory and alignment with NYC’s LL97 requirements. The bar charts and trajectories on this tab should be a graphical representation of the narrative explanation of your plan and business case from the “Narrative & Measures” and “Alternatives” tabs. The “Carbon emissions per year, before offsets” and the “Relative NPV of Alternatives” charts on the “Summary (Print Me)” tab should illustrate the sequencing and timing of equipment replacement, relationships between ECMs and savings/costs.

SDA Inputs Table

The table below describes inputs of the SDA tool and directions associated with each.

On the “Building info and assumptions” tab, users input basic information about the building: floor areas, space types, fuel types and consumption (bill) data. The “Building info and assumptions” tab enables users to communicate building information in a highly customized way at a very granular level. Default values do not need to be changed unless the business case is materially impacted by these estimates (i.e.  maintenance costs are reducing in addition to energy costs). Most of these assumptions are found in the “Real Estate Characteristics” drop down menu. Use the drop-down menu to change the default escalations rates for general costs and specific fuel costs over time. Sensitivity analyses that explore a variety of future rate scenarios are encouraged to show that you have considered the sensitivity/fragility/resilience of your plan in a variety of futures. 

The “Regulatory Assumptions” drop down on this tab includes NYSERDA default values for fuel specific emissions factors stipulated by LL97. This section also automatically calculates the building’s LL97 emissions limits for the 2024-2029 and 2030-2034 time periods using building typology and GSF inputs on the same tab. Please note: As of 2024, the SDA tool has not been updated to reflect any recent changes to LL97 building classes and missions factors.

On the “Equipment Inventory” tab, users will input major energy using equipment. All the fossil fuel equipment and at least 80% of total energy using equipment should be inventoried and reported on this tab. Very similar or identical equipment can be grouped into one row (e.g. multiple AHUs of generally the same size and age). The date of installation is required as it determines the equipment life and is used to define the Business As Usual (BAU) trajectory – existing equipment is projected to continue functioning until it reaches End of Useful Life and is replaced, like for like, at that time. User-input costs for the like for like replacement are also required inputs to complete the BAU trajectory. Please note, the estimated replacement cost and year installed are required inputs for the SDA graphics. Replacement costs for decarbonization measures and BAU equipment replacement need not be overly precise – these cost numbers should be realistic to ensure ROI and NPV calculations are sufficient for comparative purposes.

NPV and savings calculations in the SDA are significantly influenced by major energy using equipment. To streamline SDA development and simplify analysis, project teams should focus on major equipment and group minor equipment together by age, if feasible. If you are not using the landlord/tenant cost/benefit breakout, keep all equipment in column I (Tenants Own/Operate) marked “No”. This tab also enables a simple summer/winter peak/off peak calculator for demand ECMs, but using this feature is optional and is not a replacement for a full 8760 hour model. 

The “Percent energy/carbon by equipment RUL” graphics to the right (cell AY) should populate as expected if everything is input correctly. This visual is often used in business case narratives, but does not appear on the Summary tab.

On the “Narrative & Measures” tab, users narratively define their alternatives and input all the ECMs (costs and energy/carbon impacts) that will be assigned to years on the “Alternatives” tab. The SDA automatically generates two BAU cases: one in which LL97 compliance is not sought and fines are applied, and one in which LL97 compliance is achieved through carbon offsets alone.

Note the measure life column is a critical input as it determines how long the measure’s savings will persist – if the measure ends without replacement, the corresponding uptick in energy/carbon on that year will show in the trajectory graphs. 

Some potential users may be generating detailed energy models and bringing the outputs from those models into the SDA. These users may streamline ECMs to minimize data entry and rely on the narrative explanation of the measures. The simplest ECM list in this case may be “Year 1 ECMs”, “Year 2 ECMs”, etc. with corresponding costs and benefits; but be advised that users must explain their measures very clearly where they have aggregated costs and benefits.

On the “Alternatives” tab, users schedule ECMs and review the bar charts and trajectories between those Alternatives. The charts on this tab should illustrate the business case consistent with the narrative section. As stated before, the landlord vs. tenant breakdown for ECMs is not required (column H of Alternatives) and the subsequent charts can be disregarded if not used. Note the Holding period and Analysis periods can be varied independently, but most EBC users keep both set for 20 years.

The “Total Relative NPV Compared to Baseline – Varying Time Horizons” chart (cell AZ) is very commonly used in internal business cases to evaluate cost-effectiveness of the Alternatives over different time horizons, but it is not included on the Summary tab.

Most of the calculations happen on the “Operating Statements” tab, where an annual operating statement is created for each alternative/baseline for the 20-year analysis period. Users can review these statements as needed; however, it is not recommended to edit this portion of the tool directly. This is typically done when troubleshooting a trajectory chart that does not match user expectations.

Download

The SDA tool is available for download below, including a blank version as well as a version with data from a sample building.

Blank SDA Sample Building SDA

Instructional Videos

Four instructional videos detailing each step of the SDA process are linked below:

Part 1: Introduction & Inputs

Part 2: Equipment Inventory

Part 3: Narrative & Measures

Part 4: Scenarios & Results

Engineering Solutions

Building Discovery

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Insights from Empire Building Challenge 

The discovery phase is intended to provide an initial understanding of the building’s existing conditions, current challenges, and potential opportunities. The data and insights gathered during this phase will be used to create the building’s calibrated energy model.  Key activities in this workstream include: 

  • Collecting and reviewing relevant building information 
  • Observing building operations under different conditions 
  • Testing subsystems and their interactions 
  • Creating the Business-as-Usual (BAU) base case 

This workstream is critical because it grounds the project team in the reality of the building’s current performance. It also helps build a jointly owned process for uncovering early energy or carbon reduction opportunities that can increase trust and enthusiasm to identify more complex measures as the project progresses.

At the end of this phase, the team should have a clear understanding of the building energy systems, its historical energy and carbon profile, the potential impact of local laws or other building requirements, opportunities for additional metering, and preliminary energy and carbon reduction opportunities. 

This workstream provides vital information on current challenges, near and longer-term carbon reduction opportunities, and the accuracy of the energy model. It also creates early wins that build momentum and trust. Getting the most out of this work requires trust-based collaboration between multiple stakeholders, including facilities managers, operations staff, the energy modeler, external contractors, and design engineers. Engaging with tenants to get insight into what drives their loads can also add value and inform this process. Data and insights on the building’s existing condition typically arise from four sources: 

  • Design documents 
  • Data from metered systems 
  • Direct observation and testing 
  • Building operations team feedback 

Each source is important, but it is the integration across these four categories of data that leads to deep operational insights and identification of major areas of opportunity. 

Inputs
  • Cross-disciplinary, trust-based collaboration
  • Tenant insights
Activities

Gather Information:
In this phase, project teams should work with the building management and operations teams to collect key information using the sample checklist shown below.

Survey the Building:
Understanding a building’s existing conditions requires time on-site. Design drawings, operator interviews, and utility data all provide valuable insight, but do not capture the nuances of how the building runs day-in and day-out. Project teams should plan to conduct an initial site walkthrough to confirm high-level information about the building equipment, systems, and operations strategies shortly after project kickoff. As the study unfolds, additional site visits to verify information, gain additional clarity on certain conditions, or evaluate the feasibility of implementing ECMs will be necessary. The more time the project team spends in the building, the easier it will be to capture the building’s existing conditions in the building energy model and to develop ECMs that are feasible. When completing the building walkthrough, the project team should evaluate the following: 

  • Space temperatures: does the space temperature feel too low or too high?
  • Infiltration conditions: are there noticeable drafts within the space?  
  • Pipe trim and valving: is there proper instrumentation within the system?  
  • Unoccupied space conditions: is equipment running when it should be off?  
  • Central plant operations: is equipment running more often than it needs to be? 
  • Piping/duct conditions: are there noticeable leaks or inefficiencies within the distribution?  
  • Multiple controls for different equipment within a single space or physically grouped thermostats: is it possible that the controls are causing conflicting operation?  

Deploy Additional Metering (if required):
Collecting documentation and surveying the building will highlight gaps in data or information needed to build a calibrated energy model. To fill these gaps, the project team may elect to deploy additional metering to capture the missing information. Metering ultimately reduces speculation and provides real-time insight into the building’s operations. Project teams should execute the following steps when developing a metering strategy: 

  • Identify and create an inventory of existing meters, submeters and instrumentation. 
  • Verify the accuracy of existing meters and ensure they are properly connected and integrated in the building management system (BMS). 
  • Gain direct access to view the BMS data. Ideally, the team will have viewing access to real-time building operations during the entire duration of the project. 
  • Identify areas where additional meters will be required. 
  • Develop a deployment program for additional metering needs including preferred vendors, meter types, meter quantities, locations for placement, and an installation schedule. 

Observe and Test Systems:
Building system assessments and functional tests are great ways to capture operating parameters, evaluate performance, and identify issues that can be resolved with retro-commissioning. Project teams should conduct some or all the following building tests to further inform the study:

Test/AssessmentGoalsReference/Procedure
Building envelope performance and infiltrationUnderstand the conduction losses/gains through the envelope. This will inform potential envelope opportunities and the baseline energy model.Refer to ASTM E1186 – 17 for standard practices for air leakage site detection in building envelopes and air barrier systems. 
Tenant electric load disaggregation, i.e. plug loads, lighting, ITIdentify high consumption loads within tenant spaces to target critical loads and opportunities.Select one or two tenants and install submeters on their floor (can be temporary), separating out loads by lighting, IT, plug loads. Analyze consumption and data trends to develop energy conservation measures.
Setpoints and setbacks in all spaces (tenant areas, common area, IT rooms, MEP) during winter and summer seasonsDetermine the most energy efficient setpoint/setback while maintaining a comfortable space. Evaluate what is possible within each space. Evaluate the ability of the system to recover from the setback without causing excessive utility demand.Test potential setpoint and setback temperatures within each space type to determine the optimal energy efficient condition.
Airside controlsVerify that airside controls are configured to optimize energy and indoor air quality.  Identify easy-to-implement and inexpensive controls ECMs.Test procedures will vary based upon the type of airside equipment in use; however, the following assessments are applicable to many airside configurations and can act as a starting point: 
Step 1: Verify that static pressure setpoint controls are correct per the sequence of operations or current facility requirements.  
Step 2: Verify that supply air temperature resets are programmed and operating within the correct range.  
Step 3: Verify that terminal box minimum and maximum setpoint are appropriately set per the latest balancing report. 
Step 5: Confirm if outdoor airflow stations are installed, and if so, verify that the appropriate amount of outside air is being delivered per the design documents or current facility requirements.  
Step 6: Verify if a demand control ventilation (DCV) program is in place. If so, confirm that outside airflows are reduced as occupancy is reduced. 
Step 7: Verify that turndown controls are appropriately reducing equipment temperatures or flows in low load conditions.
Waterside controlsVerify that waterside controls are configured to optimize energy and are load-dependent.  

Identify easy-to-implement and inexpensive controls ECMs.

Test procedures will vary based upon the type of waterside equipment in use; however, the following assessments are applicable to many waterside configurations and can act as a starting point:  
Step 1: Verify that static pressure setpoint controls are correct per the sequence of operations or current facility requirements.  
Step 2: Verify that supply or return temperature resets are programmed and operating within the correct range.  
Step 3: Confirm if an economizer mode is available, and if so, verify that the system appropriately enables this mode in certain weather conditions.  
Step 4: Verify that turndown controls are appropriately reducing equipment temperatures or flows in low load conditions.
BMS anomalies and faultsIdentify discrepancies in what the BMS is outputting on the front-end versus the actual observed conditions. Identify easy-to-implement and inexpensive controls ECMs.For each tested system, compare the BMS outputs to the actual measured data or observed condition. Identify the root cause of the discrepancy and resolve.
Outputs
  • An additional metering strategy with a timeline for installation and a plan for measurement & verification of new meters.  
  • A preliminary list of operational adjustments and retro-commissioning issues based upon building surveys and building system assessment/tests. 
  • A plan for implementing operational opportunities like setbacks and setpoint adjustments.

Lessons Learned and Key Considerations

Business operations are as important as facility operations:
Energy studies tend to focus only on the architectural and MEP operations within the building. Project teams spend a lot of time understanding how equipment and systems operate and perform, but often don’t spend enough time considering the building’s existing lease turnover schedules, existing capital plans, or hold strategy. These business considerations are critical to understanding the types of decarbonization strategies that building ownership are likely to invest in.

2. Build the “Business-as-Usual” Base Case

Building the business-as-usual (BAU) base case occurs between the Discovery and Energy Modeling phases and includes an analysis of the building’s utility data to gain insight into how the building uses energy at a high level and how that consumption translates to carbon emissions. From this analysis, the project team will be able to evaluate the building’s exposure to mandates such as Local Law 97. 

Inputs

Building the BAU base case requires obtaining one full year of utility data, at a minimum.

Activities

Utility Analysis (Baseline Condition):
As the project team learns the building, one full year of utility data (at a minimum) will be collected. The project team should visualize this data monthly to further develop its understanding of how and when the building uses energy. The following list of questions can be used to guide the analysis: 

  • What fuel types are consumed by the building? 
  • When are fuel types used the most or the least and why? 
  • Are there unexpected usage peaks for certain fuel types? 
  • What is the building Energy Use Intensity (EUI) and how does it compare to peer buildings? 
  • What is the building Energy Cost Intensity (ECI) and how does it compare to buildings? 
  • What service class is the building in and what is the tariff structure for that service class? 
  • How does demand correlate with cost?  

Based on the results of this activity, the project team will begin to form hypotheses about how building systems interact, which end uses are the most energy intensive, and where deeper energy and carbon reduction strategies may be pursued.  

Building Performance Standard Impact Analysis:
Depending on the jurisdiction in which the deep energy retrofit study is taking place, it may be beneficial for the project team to evaluate the building’s current performance against mandates or building performance standards (BPS) that are in effect. In New York City, for example, Local Law 97 is a BPS that many building owners are focused on. Other jurisdictions may have energy use intensity (EUI) targets or other metrics for performance. The outcome of the impact analysis may help to inform the overall decarbonization approach for the building. Project teams should execute the following steps to conduct a BPS impact analysis: 

  • Step 1: Aggregate annual utility data by fuel type. 
  • Step 2: Convert raw data into the appropriate BPS metric. In the example of LL97, annual fuel consumption is converted to annual carbon emissions with carbon coefficients that are published in the law.  
  • Step 3: Compare the building’s annual performance against the BPS performance criteria. 
  • Step 4: Consider how the building’s performance might change over time as the electric grid decarbonizes. In the example of LL97, a building’s carbon emissions associated with electricity consumption will naturally decline over time as the grid decarbonizes. 
  • Step 5: Calculate impacts of compliance or non-compliance with the BPS. For LL97, building emissions in excess of the allowable carbon limit results in an annual financial penalty.   
  • Step 6: Share results with the building management and ownership teams to further inform that building decarbonization approach.

During the energy retrofit process, the team will discover simple ways to reduce energy consumption that can be implemented almost immediately. With real-time data, the BMS allows the team to analyze how effective the changes to the system are.

Outputs

Deliverables for this task include the following: 

  • Energy, carbon & cost end use breakdowns (monthly) 
  • Demand and tariff structure analysis 
  • Mandate or Building Performance Standard impact analysis

Lessons Learned and Key Considerations

3. Identify Preliminary ECMs and Carbon Reduction Strategies

Inputs

Based on the work completed during the “Learn the Building” and “Build the BAU Base Case” tasks, the project team should already have a sense of the ECMs that are a good fit for the building. The project team should review the outcomes of the work done up to this point and develop a list of preliminary strategies so the team can level set on an approach as the project enters the Energy & Carbon Modeling phase.  

Activities

• Develop a Tiered List of ECMs:
Through the document collection and building system assessments, the project team likely identified low or no-cost operational items that can be implemented immediately. These simple items should be grouped and presented as Tier 1 measures. Deeper measures that require more upfront capital and/or have a longer lead time should be separated out into Tier 2 items. Tiers can be based upon cost or timeframe for implementation. Categorizing measures in this way will support building owner decision-making. 

• Conduct a Qualitative Assessment of ECMs:
Once the measures are appropriately categorized into tiers, the project team should generate a qualitative assessment of each measure, based on metrics that are important to the building management team. For example, one building team may identify disruption to tenants as their primary go/no-go metric when deciding which strategies deserve deeper analysis. Metrics will vary from project to project. 

• Present and Solicit Feedback:
Present the tiered list of ECMs, along with the qualitative assessment, and solicit feedback from the building management team. Eliminate ideas that don’t meet the team’s decarbonization approach and welcome new items that the building team may want to pursue that were not originally considered. This process will bolster team engagement and ensure that time spent in the energy model is dedicated to measures that will be considered seriously by the building team for implementation.

Outputs

The output of this task will be a finalized list of energy reduction strategies to study the next phase: the Energy & Carbon Modeling Phase.

Lessons Learned and Key Considerations

Tenant Resources

ULI Tenant Energy Optimization Program

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Urban Land Institute’s (ULI) Tenant Energy Optimization Program demonstrates how energy efficiency can be integrated into tenant space design and construction to deliver financial benefits through energy conservation. The program is based around a ten-step process that guides building owners through each phase of an energy optimization project, from pre-lease through post-occupancy. This ten-step process was tested, refined, and documented in ten pilot project case studies, which detail the experiences and lessons learned through the tenant energy optimization process. To further support adoption of the tenant energy optimization process, ULI has produced countless tools and resources that can be utilized to replicate successful projects. 

Source: ULI

Federal Incentives

Federal Incentives for Decarbonizing Large Buildings 

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Leveraging the Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law (BIL) 

The Inflation Reduction Act (IRA) is a $370 billion dollar investment in US climate action, the largest in history. It is estimated to reduce US greenhouse gas emissions by 405 by 2030 versus the 2005 baseline. Passed in 2022, the IRA, paired with the Bipartisan Infrastructure Law (BIL) and other federal policies and initiatives, offers a suite of federal incentives aimed at promoting the decarbonization of large buildings. These incentives are designed to encourage building owners to invest in energy-efficient and sustainable technologies, thereby reducing their carbon footprint and contributing to national climate goals.  

Key components relevant to large building owners include: 

Section 179D – Energy Efficient Commercial Buildings Deduction (IRA Sec. 13303): 

  • Purpose: Encourages the installation of energy-efficient systems in commercial buildings. 
  • Eligibility: Applicable to commercial building owners for both new and existing buildings and available to architects, mechanical engineers, electrical engineers, and other designers of tax-exempt buildings.  
  • Benefit:
    • Increases deduction from $1.80/square foot to sliding scale of $2.50-$5.00.
    • Projects must achieve 25%-50% better performance than applicable ASHRAE 90.1 standard (starting with ASHRAE 90.1-2007 for projects placed in service in 2023-2026, and 90.1-2019 for projects placed in service starting in 2027). 
    • Receiving full credit requires meeting prevailing wage and apprenticeship provisions. Deduction drops to $0.50-$1.00 if not met. 
    • Creates new pathway for existing building retrofits to more easily access the deduction by demonstrating 25-50% energy use intensity improvement over one year to receive sliding scale deduction of $2.50-$5.00. 
    • IRS released new Form 7205 for claiming 179D. Awaiting guidance on filing. 
    • Unlike other incentives, 179D is permanent, and adjusts annually for inflation. 
    • Creates new pathway for nonprofit entities to access deduction by allocating it to project designer (as government entities have been able to do).

Section 48 – Clean Energy Investment Tax Credit (ITC): 

  • Purpose: Supports the adoption of renewable energy systems, such as rooftop solar, geothermal, CHP and storage in commercial buildings and at the utility-scale. 
  • Eligibility: Available to owner of renewable energy project. Non-taxable entities may access this tax credit using direct pay. All other entities may use transferability. 
  • Benefit: For most projects, credit of 30% of investment if wage and apprenticeship provisions met, dropped to 6% if not met. Projects smaller than 1MW not required to meet wage and apprenticeship provisions. Credit increases by additional 10% if domestic content requirements are met and another 10% if the project is in a designated “energy community” such as a census tract with shuttered coal operations. Additional bonus credits of 10% or 20% for qualified solar and wind projects serving low-income communities. Max credit of 70% if all bonus criteria is met.
  • Direct Pay: New options for “direct pay”–also called “elective pay”–for government and nonprofit entities to use credit even without tax liability. Starting in 2024, direct pay is phased out for projects larger than 1MW that does not meet domestic content.

Section 30C – Alternative Fuel Vehicle Refueling Property Credit (IRA Sec. 13404)

  • Purpose: Expanded tax credit for EV charging systems and other alternative fuel vehicle infrastructure through 2032.
  • Eligibility: Businesses and individuals that place qualified refueling property into service during the tax year.
  • Benefit: 
    • Credit of 30% of expenses up to $100,000 per charging/fueling unit on commercial properties, including retail, office, etc. (Past cap was $30,000 per property.) 
    • Starting in 2024, eligible properties must be in defined rural or low income census tracts. See map here for eligible tracts. 
    • Must meet prevailing wage and apprenticeship program requirements or credit is reduced to 6%. 
    • Credit taken in year property placed in service (i.e. made operational) 
    • Awaiting guidance on specific charging unit investments that qualify (i.e. electrical upgrades or wiring shared across units).
  • Direct Pay: Includes “direct pay” and transfer provisions

Greenhouse Gas Reduction Fund (GGRF): 

  • Purpose: Aims to finance a wide array of projects that reduce greenhouse gas emissions, with a focus on disadvantaged communities. 
  • Benefit: Creates a new $27B “green bank” through EPA to stand up national climate financing initiative, with three funding buckets: $7B for Solar for All, which will funds states, tribal governments, municipalities, and financial nonprofits to set up low-income solar programs across the country. $6B for Clean Communities Investment Accelerator and $14B for National Clean Investment Fund to fund financial nonprofits to use a range of financial tools to support decarbonization projects in low-income and disadvantaged communities. 
  • Eligibility: Targeted at state, local, and tribal governments, as well as financial non-profit organizations. Awards will be announced in March 2024, with funding rolling out in July 2024 and financing offerings available soon after. 

Climate Pollution Reduction Grants 

  • Purpose: Supports the development and implementation of plans to reduce greenhouse gas emissions.
  • Benefit: Provides $5 billion in grants to states, local governments, tribes, and territories to develop and implement ambitious plans for reducing greenhouse gas emissions and other harmful air pollution. $250M for planning grants, with one $3M grant for each participating state to develop plans to reduce GHG, along with smaller grants to the largest 67 metropolitan areas and to tribal governments. Learn more about your state or local plans.  Balance of $4.6B for implementation grants awarded on a competitive basis. State and local governments must be part of a planning grant to be eligible for implementation grants, with applications due April 1, 2024.
  • Eligibility: State, MSA, and tribal territories are eligible.  

Key programs relevant to multifamily building owners include: 

New Energy Efficient Homes Credit (45L): 

  • Purpose: Expanded homebuilder tax credit for new home construction, including multifamily, through 2032.
  • Eligibility: Homebuilders constructing new energy-efficient homes are eligible for this credit. 
  • Benefit:
    • Increased from $2,000 per unit historically for meeting IECC reference to $2,500 for meeting ENERGY STAR and $5,000 for DOE Zero Energy Ready Homes
    • Previously limited to multifamily buildings three stories or less, updates make it accessible to all multifamily at $2,500/$5,000 per unit. 
    • Prevailing wage provisions apply to multifamily projects, which receive reduced credit of $500/$1,000 without meeting them. 
    • Credit taken by contractor in tax year home was acquired (i.e. sold or leased). 
  • Direct Pay: Does not include direct pay or transfer provisions. But the IRA made the credit available for use with Low-Income Housing Tax Credit (LIHTC) projects without reducing LIHTC basis, increasing its value for affordable housing.

Green and Resilient Retrofit Program (GRRP): 

  • Purpose: Provides funding for energy and water efficiency improvements, indoor air quality enhancements, and resilience measures in HUD-assisted multifamily properties. 
  • Benefit: Offers $1 billion in grants and up to $4B in loan authority for projects that improve energy or water efficiency, enhance indoor air quality or sustainability, implement zero-emission electricity generation, low-emission building materials or processes, energy storage, or building electrification strategies, or make properties more resilient to climate impacts. Three funding buckets:
    • Elements: Up to $750,000 per property or $40,000 per unit for specific resilience or efficiency strategies, such as installing heat pumps, with $140 million in total funding. 
    • Leading Edge: Up to $10 million per property or $60,000 per unit for completing a multifaceted renovation that earns an ambitious green building certification such as LEED Zero, with $400 million in total funding.
    • Comprehensive: Up to $20 million per property or $80,000 per unit for deep utility retrofits and climate resilience upgrades. Includes $42.5M for energy and water benchmarking activities.
  • Eligibility: Owners of HUD-assisted multifamily properties are eligible for this funding. HUD will also conduct energy and water benchmarking of HUD-assisted properties. 

Home Efficiency Rebate Program: 

  • Purpose: Encourages whole-home energy efficiency improvements. 
  • Benefit: Provides $4.3 billion in grants to State energy offices and tribal entities to develop and implement a whole-home rebate program. Available to households of any income and owners of multifamily projects. Higher cost share for households below 80% of Area Median Income (AMI). Rebates typically range from $2,000-$8,000 for individual household or multifamily unit, or potentially higher.
  • Eligibility: Available to households participating in the program developed by their state energy office or tribal entity. 

Home Electrification and Appliance Rebate Program: 

  • Purpose: Supports the electrification of homes and the use of high-efficiency electric appliances. 
  • Benefit: Allocates $4.5 billion in grants to State energy offices and tribal entities to develop and implement a high-efficiency electric home rebate program. This program offers point-of-sale electrification rebates exclusively for low and moderate-income households (below 150% of AMI), up to $14,000 per unit. low- and moderate-income households, including for owners of qualifying multifamily projects. Covers 50% of expenses for incomes 80%-150% of AMI and 100% for incomes below 80% of AMI. ncludes point of sale rebates.
  • Eligibility: Low and moderate-income households are eligible for this program. Multifamily buildings must have at least 50% of residents below 150% of AMI to be eligible for 50% cost share, and at least 50% of residents below 80% of AMI to be eligible for 100% cost share.

Assistance for Latest and Zero Building Energy Code Adoption: 

  • Purpose: Supports the adoption of updated building energy codes, including zero-energy codes. 
  • Benefit: Provides $1 billion in grants to state and local governments to adopt and implement updated building energy codes. 
  • Eligibility: State and local governments are eligible to apply for these grants to update their building energy codes. 

The Inflation Reduction Act provides a comprehensive set of incentives for large building owners to decarbonize their properties. By leveraging these federal programs, building owners can reduce their environmental impact, lower operational costs, and contribute to the broader goals of sustainability and climate resilience. 

Information on “Direct Pay” and Transfer Provision

White House Info Page, IRS Proposed Rule, and IRS Info Page

Direct pay (formally called elective pay) allows tax-exempt entities, including municipalities, schools, states, universities, nonprofits, hospitals, etc., to receive payment – or essentially a rebate – for the amount of the tax credit even if they have no tax liability. 

  • Applies to many but not all IRA tax incentives. Most relevant for buildings, applies to ITC for renewable energy, storage, microgrids, etc., and EV charging infrastructure credits. 
  • Credit is taken annually for the tax year property is placed into service (ie rooftop solar placed in service in Sept. 2023, credit taken when filing 2023 taxes in 2024.) 
  • Filers required to submit pre-filing registration delineating projects/property and receive a registration number for each project/property to include on tax returns.
  • Tax form used for direct pay may vary – typically Form 990-T for those that don’t file federal taxes. 

Transferability 

  • Entities ineligible for direct pay can now transfer, or essentially sell, credits. 
  • Reports indicate credits are selling for approximately 95 cents on the dollar.

This resource is a compilation of content from USGBC and RMI resources. For more information, please visit the US Department of Energy and IRS websites. For further information on incentives for federal buildings or individual households, please refer to USGBC’s Buildings and the IRA presentation. More information and resources are found on our resource library under Federal Incentives. 

Resource Name Description  Source 
Inflation Reduction Act: Programs and Incentives This spreadsheet was built off of the list of Inflation Reduction Act (IRA) funding programs published by the White House as a complement to its IRA GuidebookRMI  
Guide to Federal Clean Energy Incentives RMI’s collection of resources including articles, tools, and success stories to understand and maximize the benefits of IRA, the BIL, and related federal policies and incentives.RMI  
Clean Energy Tax Provisions in the Inflation Reduction Act Table providing key information about tax provisions and links to the latest announcements related to their implementation from the White House.  The White House 
White House Guidebook of Inflation Reduction Act Programs   High level program-by-program overview of the Inflation Reduction Act, including who is eligible to apply for funding and for what purposes. The White House 
White House Guidebook of Bipartisan Infrastructure Law High level overview of how much funding is available at the program level for BIL to help partners across the country know what to apply for, who to contact for help, and how to get ready to rebuild. The White House 
DOE Funding and Incentives Resource Hub  Tool to help building owners navigate and discover the many rebates, funding opportunities, and other incentives including those available through the Inflation Reduction Act and Bipartisan Infrastructure Law. Better Buildings DOE 
Federal Funding Opportunities to Support Sustainable Development Hub of resources that highlight opportunities for the real estate industry to leverage and/or access federal infrastructure funds to support sustainability, resilience, health, and real estate and economic development goals. ULI  
Leveraging Federal Funding Opportunities for Sustainable Development Article explaining how can real estate developers access and leverage this funding and play a role in shaping infrastructure decisions to drive sustainability outcomes in cities ULI  
Building Provisions in the IRA Presentation Slide presentation covering the green building and sustainable communities provisions in the Inflation Reduction Act.  USGBC/DOE  
Commercial Building Incentive Programs in IRA and other Federal Laws  Brief detailing the multiple programs and tax incentives to improve the energy efficiency of new and existing commercial and public buildings. ACEEE 
Rewiring America IRA Fact Sheets Fact sheets on specific programs, rebates, and tax credits for building owners, homeowners, manufacturers, and contractors.  Rewiring America  
FAQs about IRA Incentives FAQs relevant to building and homeowners when determining how to use IRA tax credits and incentives.  Rewiring America  
Source: RMI, USGBC

Financial Planning

Local Law 97 Carbon Emissions Calculator

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The Local Law 97 (LL97) Carbon Emissions Calculator, published by Building Energy Exchange (BE-Ex), estimates a building’s carbon penalties as a result of LL97. This tool allows users to automatically load building data from NYC’s benchmarking database or manually enter information to generate carbon thresholds, potential penalties, and utility cost metrics across each compliance period. Access the tool below to better understand how LL97 will impact your building.

Strategic Decarb 101

High Rise / Low Carbon Event Series: Nimble Brains for Complex Systems

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As buildings transitioned from analog to digital systems, controls were dominated by platforms with high financial and educational entry thresholds. But our ability to orchestrate complex systems in buildings has transformed. It is now possible to capture and redeploy heat throughout a building, continually optimizing this thermal dispatch model in real time and keeping HVAC systems running at the highest possible level of performance, without cumbersome hardware.

Leveraging software to enable grid interactivity through building thermal management can radically reduce the amount of grid-level electric battery storage necessary, allow for better utilization of renewable electricity, smooth building demand peaks, and reduce the need for peaking natural gas power generation.

During this High Rise / Low Carbon series program developed to support the Empire Building Challenge and other NYSERDA programs, hear from experts who are deploying these technologies and utilizing Resource Efficient Decarbonization strategies to optimize performance in low-carbon retrofits.

Opening Remarks

Thomas Yeh, RTEM Advisor, NYSERDA

Moderator

Nyla Mabro, Head of Strategy & Marketing, The Clean Fight

Presenters

Matthew Sheridan, Energy Manager – Rockefeller Center, Tishman Speyer
Thomas Walsh, General Manager – Manhattan West, Brookfield PropertiesPanelists
Neil Breen, Vice President, Energy Services, Ramboll
Javier Aleman, Principal, AXC Automation

Source: Building Energy Exchange

Strategic Decarb 101

About Resource Efficient Decarbonization

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Insights from Empire Building Challenge

Improved engineering design means and methods are needed to enable and speed adoption of low-carbon retrofit technologies. High performance, low-carbon heating and cooling systems are widely available but are underutilized in the United States due to a variety of misconceptions and a lack of knowledge around thermal system interactions. Few practicing engineers prioritize recycling heat and limiting heat loss. Decarbonization requires upgrading and adapting energy distribution systems originally designed to operate with high temperature combustion to integrate with electric and renewable thermal energy systems. The engineering design industry can use a thinking framework like Resource Efficient Decarbonization (RED) to deliver projects that achieve more effective decarbonization.  

This framework emerges from the Empire Building Challenge through continued collaboration among real estate partners, industry-leading engineering consultants, and NYSERDA. RED is a strategy that can help alleviate space constraints, optimize peak thermal capacity, increase operational efficiencies, utilize waste heat, and reduce the need for oversized electric thermal energy systems, creating retrofit cost compression. While RED is tailored to tall buildings in cold-climate regions, the framework can be applied across a wide array of building types, vintages, and systems. The approach incorporates strategic capital planning, an integrated design process, and an incremental, network-oriented approach to deliver building heating, cooling, and ventilation that: 

  • Requires limited or no combustion,
  • Enables carbon neutrality,
  • Is highly efficient at low design temperatures and during extreme weather,
  • Is highly resilient, demand conscious, and energy grid-interactive,
  • Reduces thermal waste by capturing and recycling as many on-site or nearby thermal flows as possible, and
  • Incorporates realistic and flexible implementation strategies by optimizing and scheduling phase-in of low-carbon retrofits competing with business-as-usual.

Decarbonization Framework

Resource Efficient Decarbonization focuses on implementing enabling steps that retain a future optionality as technology and policy evolves. This framework allows a building owner or manager to take action now, instead of waiting for better technology and potentially renewing a fossil-fueled powered energy system for another life cycle.

The figure below illustrates a conceptual framework for accomplishing these objectives and overcoming the barriers. Specific measures and sequencing will be highly bespoke for a given building, but engineers and their owner clients can use this bucketed framework to place actionable projects in context of an overarching decarbonization roadmap.

Resource Efficient Engineering Steps

Step-by-Step Process to Advise Decarbonization Efforts

  1. Understanding a building’s fossil fuel use in detail is a critical first step. Make an effort to understand when, where, how, and why fossil fuels are being consumed at the building and under what outdoor temperature and weather conditions. Conduct a temperature BINS analysis to know how much fossil fuel is consumed during various temperature bands (typically in 5- or 10-degree increments) from design temperature up to the end of the heating season. Make an effort to understand cooling season usage patterns in detail. Go further and conduct an 8760 hour/year analysis or modeling effort to show building operation profiles with high granularity to advise targeted elimination of fossil fuel consumption.
  2. While electrification is desirable to combat climate change, energy efficiency is a  critical component of decarbonization. Reducing heating and cooling loads across all weather conditions is a major early step to achieve RED. 
  3. Identify the ways heat is being gained or lost. Hint: some places to look at are cooling towers, facades and windows, elevator machine rooms, through sewer connections, or at the ventilation exhaust system. Cooling towers operating in the winter are an obvious energy wasting activity. Seek solutions to reduce, recover, and recycle or reuse, and store this heat. 
  4. After, or in parallel with the previous steps, begin to electrify the building heat load, starting with marginal “shoulder season” loads (spring and fall). Don’t force electric heating technology such as air source heat pumps to operate during conditions for which they weren’t designed. Optimize heat pump implementation through a “right sizing” thermal dispatch approach to avoid poor project economics and higher operating expenses. This means continuing to retain an auxiliary heating source for more extreme weather conditions until fossil fuels are ready to be fully eliminated. This approach provides owners time to identify the right peak period heating solution while allowing them to act early in driving down emissions. Emissions reduced sooner are more valuable than emissions reduced in the future.
  5. Remove connections to fossil fuels and meet decarbonization deadlines!

Take Actions with these Enabling Steps

Review

  • Disaggregate time-of-use profiles to identify heat waste and recovery opportunities and to right-size equipment.
  • Thermal dispatch strategy: layering heat capacity to optimize carbon reduction and project economics.

Reduce

  • Repair, upgrade and refresh envelopes.
  • Optimize controls.

Reconfigure

  • Eliminate or reduce inefficient steam and forced air distribution.
  • Create thermal networks and enable heat recovery.
  • Lower supply temperatures to ranges of optimal heat pump performance.
  • Segregate and cascade supply temperatures based on end-use.

Recover

  • Simultaneous heating and cooling in different zones of building.
  • Eliminate “free cooling” economizer modes.
  • Exhaust heat recovery; absorbent air cleaning.
  • Building wastewater heat recovery.
  • Municipal wastewater heat recovery.
  • Steam condensate.
  • Refrigeration heat rejection.
  • Other opportunistic heat recovery and heat networking.

Store

  • Store rejected heat from daytime cooling for overnight heating.
  • Store generated heat— centrally, distributed, or in the building’s thermal inertia.
  • Deploy advanced urban geothermal and other district thermal networking solutions.

Building Systems Topologies

Commercial Office

Commercial office buildings offer significant heat recovery and storing opportunities due to simultaneous heating and cooling daily profiles. As a result, offices can heat themselves much of the year with heat recovery and storage. Example load profiles for typical heating and cooling days in a commercial office building are shown in the graph below.

Office heat and cooling load

Multi-family

Multi-family buildings’ typical daily profiles show efficiency opportunities that can lower and flatten system peaks. This can be achieved by a variety of heat reduction, recovery, and storing strategies​. Example load profiles for a typical heating day in a multifamily building are shown in the graph below.

Multifamily heat load

Thermal Distribution Opportunities

The thermal energy network approach enables transaction of thermal energy to increase overall system efficiency and reduce wasted heat. The concept can be applied at the building level (with floor-by-floor heat exchange), to groups of buildings, to whole neighborhoods, or to cities. Below is an illustration of a whole-system, thermal network approach applied in an urban environment to supply clean heat in cold-climate tall buildings:​

Resource Efficient Engineering Steps Exemplified