This article is featured in the May/June issue of Seattle Business magazine. Subscribe here to access the print edition.
Starting in just a few months, owners of most buildings greater than 50,000 square feet in Washington can start applying for financial help to retrofit their buildings to comply with the state’s new Clean Buildings standards.
These standards, approved by the Legislature through SHB1257 and signed into law by Gov. Jay Inslee in 2019, make Washington a national leader for mandating energy efficiency numerical targets based on a commercial building’s size and use. The performance standards offer the opportunity to reduce greenhouse gas emissions by lowering a building’s energy consumption. Based on the size of the building and how it is used, owners starting in June 2026 must comply or face fines of $5,000 plus $1 per square foot per year.
Buildings greater than 220,000 square feet will be the first to meet the requirements in June 2026. Buildings between 90,000 to 220,000 square feet have until June 1, 2027, to comply, and buildings 50,000 to 90,000 square feet must comply by June 1, 2028. Agriculture and some manufacturing buildings are exempt. Although some buildings don’t have to comply for several years, the time to qualify for the state financial incentive is now.
The penalty for noncompliance is steep. That’s why the state is offering financial incentives to help offset the costs of needed retrofits for buildings that are more than 15 points away from their performance targets.
As part of the Clean Buildings legislation, lawmakers approved $75 million to put toward financial incentives. Funds will be appropriated on a first-come,
first-served basis. Building owners could qualify to receive incentives of up to 85 cents per square foot to help offset retrofitting costs. Applications will be accepted starting July 1.
With the deadline looming and financial awards offered to those who apply first, it’s time for those who own and manage buildings larger than 50,000 square feet to do what’s necessary now so they don’t miss out. According to initial research, 10,181 commercial buildings in Washington will need to meet the new requirements.
Building owners should first benchmark current energy use by conducting an energy audit to compare the building’s energy use using the U.S. Environmental Protection Agency’s (EPA) Energy Star Portfolio Manager. This involves reviewing 12 months of utility data, along with the square footage of the building to determine its Energy Use Intensity, or EUI. The lower the EUI, the more energy efficient the building. The new state law establishes maximum energy use by square foot and building type. For example, commercial office buildings have a lower required EUI than hospitals or restaurants.
One local property owner, Seattle’s Sabey Corp., is an expert at managing energy efficiently in its buildings. Sabey has been recognized many times by the U.S. Department of Energy and the EPA for exemplary operations and innovations.
Once a benchmark is established, it’s possible to determine how to make the building more efficient and to improve the building’s EUI so it complies with state law. Fixes could include improving antiquated technology, such as mechanical equipment and controls, upgrading lighting to LED technology and making sure systems are working in harmony. We have found when the required energy efficiency improvements are done in a smart, comprehensive manner they actually pay for themselves within the useful life of the improvements.
Already, Swedish Medical Center’s three campuses in Seattle have improved their EUI an average of 7.3%, saving the health care provider $778,000 to date. Even before the state passed Clean Building standards, Swedish began modernizing its facilities management approach with advanced system monitoring, smart energy analytics and operational sustainability.
It not only has achieved significant EUI improvements and utility savings, but also pivoted to a more predictive model for its preventive maintenance program, met city energy code requirements and is in line with the state’s Clean Buildings standards. Don’t miss the opportunity to have some of these retrofits paid for by the state by working with a contractor that can provide cost-effective solutions and develop energy management plans.