While the ENERGY STAR program continues to deliver value to commercial real estate, its future now hangs in the balance amid political pressure and privatization proposals. 

For decades, ENERGY STAR quietly became the backbone of energy management in commercial real estate. Today, after saving billions in costs and emissions, the program finds itself thrust into the political spotlight, with its very existence under debate. 

ENERGY STAR is one of the most successful federal initiatives in commercial real estate history. Roughly 330,000 buildings use its tools, covering about one-quarter of all commercial space in the U.S. Yet, there’s now ongoing discussion about whether to eliminate the program or hand it over to private companies. 

For property managers, building engineers, and investors, this uncertainty could reshape how business gets done. 

The Program That Works 

Last year alone, the EPA says the program helped save 230 billion kilowatt-hours of electricity. This is equal to $14 billion in avoided energy costs and 170 million metric tons fewer emissions.  According to the EPA 2024 Impact report, “Every dollar invested in ENERGY STAR returns four dollars in savings.”  

At the heart of the program is Portfolio Manager, a free online tool that has become the standard for energy benchmarking. It generates a 1–100 ENERGY STAR score, comparing a building’s energy performance to similar properties nationwide. 

Getting certification isn’t easy: a building must score in the top 25% of its category. Certified buildings use about 35% less energy than peers and often command higher rents and sale prices. In the latest reporting cycle, more than 8,800 buildings earned certification. 

When Voluntary Becomes Mandatory 

Seven states and 48 local governments now require energy benchmarking using ENERGY STAR tools. So, if you own commercial property in places like New York City or San Francisco, you’re already using this system whether you realized it or not. 

The federal government also requires its agencies to lease space in ENERGY STAR certified buildings when possible, creating a built-in tenant base for certified properties in markets with a significant federal presence. 

NextGen 

To meet growing carbon reduction goals, the EPA recently launched ENERGY STAR NextGen. This new certification adds greenhouse gas and renewable energy requirements on top of traditional efficiency standards. To earn NextGen certification, you will need a 75+ ENERGY STAR score plus either 30% renewable energy overall or 100% renewable electricity (if electricity is less than 30% of your total energy use). 

NextGen reflects the market’s evolution. According to the EPA, the new framework responds to “market demand for carbon reduction, not just efficiency.” 

Financial Benefits 

Beyond cost savings, certified buildings achieve premium rents, lower vacancy rates, and higher sale prices. 

The Portfolio Manager tool connects automatically with about 450 utilities for streamlined data uploads. While currently free to use, it would cost tens of thousands of dollars to replicate privately.  

According to Fannie Mae and other lenders, multifamily borrowers with ENERGY STAR certifications had delinquency rates 60% lower than non-certified peers in 2023. 

The certification process often identifies operational improvements that pay for themselves. 

Technology Integration 

ENERGY STAR has evolved beyond manual data entry. Today, Portfolio Manager connects directly with building management systems and energy platforms, eliminating errors and allowing real-time tracking. Smart meters, IoT sensors, and predictive analytics identify performance issues before they impact scores. Properties that integrate these technologies often achieve certification more efficiently, while also improving tenant comfort and reducing maintenance costs. 

Privatization 

Some policymakers now question whether the program delivers enough value under federal oversight, suggesting private companies might manage it more efficiently. According to E&E News, EPA Administrator Lee Zeldin said, “I anticipate that they’re taking credit for a heck of a lot more than they should.” 

Industry groups strongly disagree. The American Council for an Energy-Efficient Economy (ACEEE) said, “If you wanted to raise families’ energy bills, getting rid of the ENERGY STAR label would be a pretty good way.” 

If the program were eliminated or privatized, state and local governments would need new benchmarking systems, standardized performance metrics could be lost, and costs for property owners could rise sharply. Free access could easily give way to subscription-based pricing that smaller owners may not afford. 

For now, it is smart to maximize what’s available: setting up Portfolio Manager accounts, maintaining comprehensive energy data, and pursuing certification for buildings close to the 75-point threshold. 

Planning for the Future 

“To your everyday consumer, ENERGY STAR is typically thought of as the little blue label on your washing machine. To the commercial real estate industry, it is much more,” said Leia de Guzman, co-founder of the real estate tech company Cambio.  

Owners are preparing for possible changes by preserving energy performance records, researching alternative benchmarking tools, and focusing on operational excellence rather than just certification. Properties that improve efficiency will perform well regardless of the measurement system in place. 

Market Analysis 

In high-cost coastal markets like New York, San Francisco, and Washington D.C., ENERGY STAR certification delivers the strongest premiums. Certified buildings in these areas typically see rent premiums of 3-7% and sale price premiums of 5-10%. The combination of high energy costs, stringent local regulations, and tenant demand makes certification a practical necessity for Class A properties. 

Cities with mandatory benchmarking requirements including New York City, San Francisco, Seattle, and Boston show consistently higher ENERGY STAR premiums because certification helps satisfy regulatory requirements while demonstrating superior performance. 

Federal leasing requirements also boost demand. In markets with significant federal presence, such as Washington, D.C., Arlington, and Colorado Springs, ENERGY STAR certified space benefits from a reliable tenant base willing to pay premiums. 

By contrast, regions with low energy costs and minimal environmental regulations, particularly in parts of the Southeast and Midwest see smaller premiums of 1-3%. However, even in these markets, institutional investors and national tenants increasingly prefer certified space. 

Corporate tenant demand further shapes outcomes. Markets with high concentrations of Fortune 500 companies or tech firms such as Seattle, Austin, and Research Triangle in North Carolina, show stronger ENERGY STAR demand because these companies have sustainability goals that prefer certified space. 

Climate plays a similar role. Extreme weather markets, like Phoenix or Minneapolis, tend to show higher ENERGY STAR premiums because energy efficiency delivers more dramatic cost savings. 

Interestingly, some secondary markets are showing emerging ENERGY STAR premiums as institutional capital flows into these areas. Cities like Nashville, Charlotte, and Denver didn’t historically show strong green building premiums, but increasing investment from national players is changing that dynamic. 

The broader sustainability movement reinforces the trend. According to CBRE, office buildings with LEED certification commanded an average rent premium of 4% between 2019 and 2022 across 20,600 U.S. properties. While distinct from ENERGY STAR, this demonstrates how sustainable certification drives real estate value. 

Success Stories 

MGM Resorts International demonstrates how ENERGY STAR principles scale across large portfolios. According to the Department of Energy’s Better Buildings Initiative, MGM achieved a 41% reduction in Scope 1 and 2 emissions between 2019 and 2022 across 65 million square feet of building space. The company invested $112 million in 231 energy conservation projects, including LED retrofits, smart building controls, and energy analytics, achieving cumulative savings of 3.7 million MWh. 

In the EPA’s 2024 award announcement, it was reported that nearly 40% of the Fortune 500 partner with the agency through ENERGY STAR, highlighting the program’s influence at the highest corporate levels. 

The Bigger Picture 

The industry’s strong support for ENERGY STAR reflects how valuable the program has become. Even if discontinued, market demand for credible energy performance data isn’t going away. According to the EPA, the program has avoided more than 4 billion metric tons of greenhouse gas emissions and saved businesses and households over $500 billion since its inception. 

ENERGY STAR represents more than 30 years of collaboration between government and industry, creating trusted building performance benchmarks. Its foundation will continue influencing commercial real estate regardless of who runs it. 

References: 

• American Council for an Energy-Efficient Economy. (2025, May). “Ending ENERGY STAR Would Strip Consumers of Information on Cost-Saving Products.” https://www.aceee.org/press-release/2025/05/ending-energy-star-would-strip-consumers-information-cost-saving-products-0 
• Better Buildings Initiative. (2024). “MGM Resorts’ 100-Megawatt Solar Array: Climate Action Through Solar Farming.” U.S. Department of Energy. https://betterbuildingssolutioncenter.energy.gov/showcase-projects/mgm-resorts-100-megawatt-solar-array-climate-action-through-solar-farming 
• Brady, J. (2025, August 13). “Energy Star program may be eliminated or privatized by Trump administration.” NPR. https://www.npr.org/2025/08/13/nx-s1-5432617/energy-star-trump-cost-climate-change 
• CBRE. (2023, April). “LEED-Certified Office Buildings Command Higher Rents.” https://www.cbre.com/press-releases/leed-certified-office-buildings-command-higher-rents 
• Environmental Protection Agency. (2024, March). “EPA Announces 2024 ENERGY STAR Awards: Outstanding Contributions to Energy Efficiency and the Transition to a Clean Energy Future.” https://www.epa.gov/newsreleases/epa-announces-2024-energy-star-awards-outstanding-contributions-energy-efficiency-and 
• Environmental Protection Agency. (2024). “EPA 2024 ENERGY STAR Impact Report.” https://www.energystar.gov/impact 
• ResearchGate. (2014, December). “Operating Expenses and the Rent Premium of Energy Star and LEED Certified Buildings in the Central and Eastern U.S.” https://www.researchgate.net/publication/269377475 
• Scientific American. (2025, May 8). “The EPA Plans to Terminate the Energy Star Program. Here’s What That Means.” https://www.scientificamerican.com/article/the-epa-plans-to-terminate-the-energy-star-program-heres-what-that-means/ 
• Thomasnet. (2025, May). “Energy Star at Risk: A Look at the Program’s Future.” https://www.thomasnet.com/insights/energy-star 
• Willson, M. (2025, May 21). “Zeldin says Energy Star program can be privatized.” E&E News by POLITICO. https://www.eenews.net/articles/zeldin-says-energy-star-program-can-be-privatized/ 

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