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Tenant Star Legislation

Don Buchholz
Updated June 15, 2015

After nearly four years of amendments, deliberation, and lobbying, President Obama signed into law Senate Bill S.535 the "Energy Efficiency Improvement Act of 2015," on April 30th.  Aimed at improving the energy efficiency of commercially leased buildings through voluntary cooperation between tenants and landlords, the bill has become more commonly known by its feature program: Tenant Star. Modeled after the incontrovertibly successful Energy Star program, Tenant Star will work in the same broad-strokes manner as its predecessor, however, instead of focusing on the energy consumption of the building as a whole, it will be specific to individual tenants and businesses. The bill will provide resources for tenants and landlords to track, modify, and ultimately decrease the amount of power necessary to run their offices as well as tax incentives to do so. If implemented successfully, lawmakers hope to see parallels between this and the Energy Star program, which has saved businesses and homeowners an estimated $360 Billion on utility costs since 1992 while reducing green house gas emissions by 2.5 billion metric tons.

What does this mean for tenants?

Ultimately, this program means nothing more than a choice for lessees and lessors to make in the near future. Due to the strictly voluntary nature of the program it will only by used by those tenants wishing to take advantage of these free government resources, however, the benefits of doing so are immense. Gathering data on the energy consumption of individual sectors of a building is already done by many businesses that employ “smart” or “learning” thermostats and meters and the results are overwhelmingly positive. Beyond a small initial investment in the hardware itself, the cost saving will be immediate and can be drastic for tenants with a high level of energy usage in their office space. Tracking data will lead to an even greater decrease in consumption once viable patterns are discovered amongst different times and locations.

Beyond these monetary and environmental benefits, Tenant Star can be a powerful tool for branding your business and building relationships. Working directly with your landlord to solve energy consumption issues will not only strengthen your relationship with them, but can potentially help you keep your tenancy when lease negotiations arise by showing that you are a mindful and savvy tenant. This program is also a great marketing tool to show customers that you care about the environment and will hopefully one day carry with it a brand as recognizable as the energy star logo that is now seen on millions of products, buildings, and homes.

How can you take advantage of it?

Unfortunately, this bill was only signed into law in the last month. This means that Tenant Star itself will not be available to users for over a year (optimistic projections have it launching in August of 2016) yet this does not mean that you cannot begin to take advantage. Beyond physical preparations to begin reaping the financial benefits of the likely tax breaks within the program, all of the aforementioned advantages of Tenant Star actually occur independent of the program itself. While you may not have a logo to put in your window and show clients that you care about our planet’s finite natural resources, it is never too early to improve relations with your building’s owner; and a smart thermostat on your wall can show clients far more than a government sponsored decal ever could. There are many programs already in existence to track and manage energy consumption, some of which are so simple that they can be managed right from your smartphone. Despite the distant nature of the program itself, a little research can show just how simple it is to begin saving money and strengthening your company’s image all while helping to preserve our planet for future generations.

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