Philadelphia recently joined a growing list of states and cities to mandate energy benchmarking and disclosure for commercial buildings over 50,000 square feet.

The requirement may sound like just one more piece of compliance, but it is far more than that, according to a white paper from the Carbon War Room. The simple act of benchmarking can result in 5 percent energy savings in buildings, without any investment in retrofits.

“Benchmarking buildings' energy use is the first, crucial step toward reducing it. Lower energy use means lower bills and reduced carbon emissions, so it's a win for businesses, consumers, and the environment,” Cliff Majersik, executive director of the Institute for Market Transformation, said about Philadelphia in a statement.

It’s not just governments that are requiring benchmarking, which usually has to be reported in the form of a U.S. Environmental Protection Agency Energy Star score. The U.S. Green Building Council’s LEED rating now incorporates an Energy Star score as a prerequisite.

Startups like FirstFuel, Retroficiency, SCIEnergy, Pulse Energy and Lucid are ready to provide everything from benchmarking to energy management, as well as to help building owners identify which buildings will get the best payback. For all of these companies, benchmarking can be a foot in the door to offer other analytics that extend to constant monitoring. Other companies like EnerNOC, Honeywell, Schneider Electric and others also offer increasingly sophisticated monitoring tools for buildings of various sizes. 

The increased regulation and corporate focus on sustainability is driving the energy efficient building market to expand considerably. The market is expected to reach more than $100 billion by 2017, more than a 50 percent increase from today, according to Pike Research. A study by IMT found that a national benchmarking and disclosure policy could reduce energy costs by approximately $18 billion by 2020.

It all sounds very simple, but depending on the side of the building and the ease of collecting utility data, getting a benchmark score can be a headache. The Carbon War Room white paper used an example of a building owner who hired a service provider to file the benchmarking paperwork.

The service provider conducted a walkthrough, and in this example case, the utility consumption data was readily available. The data was easy to get, but scheduling a site visit and merging that with building data took multiple weeks, and then it took a few more weeks to get a score back from the U.S. Environmental Protection Agency. For buildings that are trying to obtain LEED status, it can be months to even know if the score is high enough to qualify.

As more and more governments and programs require benchmarking, the range of technology solutions that cut out the physical walk-through will increase, and as Green Button data becomes available, benchmarking compliance should become easier.

Constantine Kontokosta, Director of the Center for the Sustainable Built Environment and Clinical Associate Professor at NYU's Schack Institute, noted that there still needs to be work done to work out inconsistencies in benchmarking data, but once the data has been cleaned up, it should be an asset to more than just building owners.

Benchmarking opens the door for a more in-depth audit, or at least more constant monitoring. The availability of public benchmark data in cities such as New York will allow for a range of companies to tailor their offerings to the buildings that can benefit most, and allow for investors to build financing models based on paybacks on previous retrofits.

IMT estimates that benchmarking could generate more than $7.8 billion in private investment in energy efficiency through 2020, yielding up to $3 in savings for every dollar invested.

“The reason sensors and automation are important is that even if you’re putting in a new building management system or piece of equipment, people don’t act as we expect them to,” said Emma Ritch, a senior analyst with GTM Research. “You really need constant commissioning.”

While benchmarking can open a building owner's eyes to the problems a building may have, and demand response can earn some money for retrofits, the evolution of building analytics is still underway, especially as the smart grid evolves on the other side of the meter to offer more opportunities for smart buildings to interact with a smarter grid.

Eventually, building data analytics will not be just for the biggest companies that have sustainability portfolios, but every type of company. “It needs to happen at every level and every size building,” said Ritch, who noted that many companies are tailoring analytics products for every sector of the commercial market. Benchmarking is still the first step, but it is opening the door and markets for other software services that can cut energy for far less than the cost of a retrofit.

For more on big data, analytics, and how they will impact the smart grid and the buildings connected to it, join Greentech Media in San Francisco on August 14-15 for The Soft Grid conference.

Tags: audit, building data analytics, carbon war room, constant commissioning, energy benchmarking, energy efficiency, energy use, retrofits, smart buildings