Planning Guides
Strategic decarbonization planning (SDP) is a comprehensive, often multi-year approach to retrofitting buildings to deeply reduce greenhouse gas emissions. It results in an investment roadmap that helps avoid missed opportunities, prevent stranded assets, and unlock long-term value.
This guide distills proven practices from the Empire Building Challenge and other leading retrofit efforts. It offers a flexible set of strategies that can be tailored to your building, team, and timeline—whether the work is led internally or supported by consultants.
In most large office and multifamily buildings, the elephant in the room is the heating system—particularly space and domestic hot water heating. These systems are the dominant source of Scope 1 emissions and a central challenge for decarbonization. Addressing them typically means replacing fossil fuel–burning equipment with electric systems, most often heat pumps.
Even with a grid still transitioning to renewables, the high efficiency of heat pumps leads to lower emissions—and that advantage will continue to grow. While first costs and electricity rates can present challenges, they can be addressed through careful planning, smart phasing, and strategic investment. This guide provides the best practices needed to meet those challenges and achieve deep, lasting emissions reductions and increased asset value.
Examine Current Conditions
A successful decarbonization plan starts with context. Take the time to deeply understand your building—not just how it operates today, but the lease terms, policy environment, and timing factors that will shape what’s possible tomorrow. A traditional energy audit is a good start, but Strategic Decarbonization Planning (SDP) often requires deeper, broader insight. This foundation helps ensure your strategy is grounded, aligned, and ready for action.
Document Existing Conditions
Before planning retrofits, it’s essential to understand how your building operates today—through a decarbonization lens. Go beyond baseline energy use to include:
- Electrical infrastructure: Assess riser capacity, switchgear limits, and space for upgrades. Anticipate constraints and potential utility-side costs like Excess Distribution Facility (EDF) charges or Contributions in Aid of Construction (CIAC).
- Asset strategy: Clarify the building’s hold period, refinancing timeline, capital plan, and NOI—factors that shape scope, timing, and investment strategy.
- Equipment sizing and loads: Compare actual peak heating and cooling loads with system capacity. This supports right-sizing, load reduction, and avoiding overspending on oversized equipment.
Where utility data falls short, use targeted measurements—like metering or automation system logging—to improve accuracy. You’re still documenting business-as-usual, but through the lens of what’s possible next. And remember: your data collection should match the needs of your analysis—start with the outputs you need, and work backward.
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Establish an Events Calendar
Map out equipment replacements, tenant turnover, refinancing milestones, and capital planning cycles that could serve as trigger events for implementing decarbonization measures. These events help establish a realistic upgrade timeline aligned with natural decision points and existing investment cycles.
Industry-standard equipment life estimates—such as ASHRAE’s 25 years for boilers—offer a useful reference point, but actual investment plans should take precedence. If equipment is expected to remain in service beyond typical lifespans, that timeline should guide the retrofit strategy or prompt a clear conversation. Aligning these assumptions early across stakeholders ensures the plan reflects real-world expectations and reduces the risk of costly missteps or delays.
This exercise also reframes decarbonization as a reallocation of existing capital—not an added cost. Even without action, there are business-as-usual costs: capital expenditures, rising maintenance, and continued emissions exposure. Identifying trigger events early makes it possible to time upgrades with minimal disruption and greater financial efficiency—leveraging money already on the table.
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Review Leases and Modify as Needed
In tenant-occupied buildings, standard leases may limit the flexibility needed to decarbonize effectively. Restrictions on system changes, unclear cost recovery mechanisms, or misaligned incentives can all create barriers to upgrades.
Review leases early to identify where modifications may be necessary to enable improvements, allocate costs fairly, and support long-term decarbonization goals. This process often requires coordination with lease renewal or turnover cycles—so starting early is essential.
To align leases with decarbonization strategies and reduce split incentives, consider:
- Energy budgets: Establish shared energy performance targets and budgets to create mutual accountability for usage and savings.
- Submetering and disclosure: Require submeters and standardized disclosure of tenant energy use to support transparency and reinforce behavior-based savings.
- Cost recovery mechanisms: Enable recovery of capital costs for efficiency or electrification upgrades through operating expenses or green lease clauses.
- Recommissioning provisions: Include language that allows for periodic recommissioning of tenant systems to maintain performance over time.
These updates help ensure leases support—not stall—building decarbonization, while creating structures that benefit both owners and tenants.
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Characterize Relevant Policies
External factors—such as incentives, building performance standards, and energy code requirements—can significantly influence the timing, cost, and overall viability of a decarbonization project.
Take the time to identify and understand policies that apply to your building. Document how they affect your current systems, future upgrade options, and compliance obligations. This information should be ready to integrate into your analysis scope and decision-making framework.
Proactively surfacing these constraints and opportunities can help avoid costly surprises—and sometimes uncover strategic advantages, like access to funding, favorable timing, or early compliance credit.
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