Energy Star and LEED Certifications - What's the Difference?
At a time when the impact of climate change is at the forefront, countries are taking measures to fight against it and terms like Energy Star and Leadership in Energy and Environmental Design (LEED) certifications have become popular topics of conversation. Both are aimed at constructing top-performing buildings with minimal environmental impact by promoting, among other things, energy efficiency. This blog post explains the differences between the two programs.
Energy Star is a certification program developed by the U.S. Environmental Protection Agency (EPA) that delivers environmental benefits and financial value through energy efficiency. The program offers free tools and resources to help organizations evaluate its energy performance and reduce energy use. This section will focus on Energy Star certification for existing commercial buildings that measures a building's energy usage and compares it to similar buildings.
The EPA awards Energy Star certification to eligible building types that earn an Energy Star score of at least 75 out of 100, which indicates that the building is among the top 25 percent most energy efficient building of its type. The eligible building types include, but are not limited to, supermarket/grocery stores, wholesale club/supercenters, hotels and retail stores.
To determine a building's energy efficiency score, the EPA uses an online tool, Portfolio Manager, to track and measure a building's energy, water use and greenhouse gas (GHG) emissions. A building's energy efficiency is rated on a scale of 1 to 100, with 100 being the best possible score. The rating represents the building's efficiency in comparison to similar buildings. Thus, a score of 90 indicates that a building is more energy efficient than 90 percent of similar buildings. To earn an Energy Star certification, a building must score a 75 or better. Buildings that receive a score of at least 75 can then apply for Energy Star certification online through Portfolio Manager.
For a complete application, the following must be entered/submitted through Portfolio Manager:
- data with complete use details
- minimum of 12 consecutive months of energy data
- a verified and stamped application by a licensed engineer or registered architect
Energy Star offers further information on how to apply for certification on its website. Once granted, Energy Star certifications are good for one year, and recipients must reapply annually to maintain the Energy Star certification.
It is important to note that the EPA also grants a "Designed to Earn the Energy Star" designation for new construction projects based on a new building's estimated energy usage. These newly constructed buildings are expected to qualify for Energy Star certification once operational. Energy Star explains how projects in the development stage can earn the Energy Star designation on its website.
Per its website, lower utility bills is one of the reasons to pursue Energy Star certification for commercial buildings. In addition, Energy Star certified buildings generate 35 percent fewer greenhouse gas emissions, have higher occupancy rates and command higher rents, and get better financing terms.
LEED is an internationally recognized green building certification offered by the U.S. Green Building Council (USGBC). LEED is a broader certification than Energy Star as it recognizes more than just energy efficiency. While Energy Star rewards a building's energy efficiency, it does not prescribe LEED's specific engineering or design measures that the building must use. The Energy Star certification is ultimately determined by a building's energy use (or estimated energy use) in relation to similar buildings, whereas LEED certification requires various other measures such as indoor air quality measures that would not fall within Energy Star's focus on energy efficiency. It is important to note that for existing buildings, as a prerequisite, LEED requires a building to qualify for Energy Star certification.
Per the official LEED website, a building project may achieve LEED certification under one of the following six rating systems:
- building design and construction
- interior design and construction
- building operations and maintenance
- neighborhood development
To receive certification, a project must earn credits within the appropriate rating system by meeting certain prerequisites. There are four levels of certification, depending on how many credits are earned: Certified (40-49 points), Silver (50-59), Gold (60-79) and Platinum (80+).
Each rating system discussed above contains nine credit categories that users of the LEED process can earn: integrative process, location and transportation, materials and resources, water efficiency, energy and atmosphere, sustainable sites, indoor environmental quality, innovation and regional priority credits. To be certified, a building project must meet certain minimum requirements in particular categories, and users can choose which additional credit earning improvements to make in order to accumulate the credits needed for the desired certification level.
To apply, LEED certification applicants must first register their project online. While Energy Star certifications are good for one year, LEED certifications are good for five years. For further information on prerequisites and available credits for each of the rating systems please visit the USGBC's Prerequisites and Credits.
Some reasons to invest in LEED certification, similar to Energy Star, include:
- reduction of energy use and carbon emissions
- higher resale value and faster lease-up rates
- tax benefits
- lower utility costs
In short, it is important to understand that Energy Star and LEED are not competing programs but rather complementary to each other. Energy Star provides users the tools they need (Portfolio Manager) to reach a higher level of building energy performance, therefore helping them get closer to the standards required for LEED certification. Both programs provide resources to encourage green building practices and help promote sustainability for both new and existing buildings and moves one step closer to victory in the fight against the impact of climate change.
More Blogs in This Series
Part 1 - Green Lending in Commercial Real Estate: Four Core Components of Green Loan Principles
Part 2 - Going Green in Commercial Real Estate: Aim for a Zero-Emissions Building Standard
Part 3 - Renovating Existing Commercial Real Estate Building to Become Green
Part 4 - Cities Are Going Green Through Sustainable Real Estate
Part 5 - An Introduction to Property Assessed Clean Energy Financing
Part 6 - Inflation Reduction Act Offers a Variety of Green Building Tax Incentives
Part 7 - Inflation Reduction Act of 2022: Business Energy Investment Tax Credit
Part 8 - Inflation Reduction Act of 2022: The Newly Added Renewable Electricity Production Tax Credit
Part 9 - Inflation Reduction Act of 2022: Prevailing Wage and Apprenticeship Provisions
Part 10 - Energy Star and LEED Certifications - What's the Difference? (You are currently reading Part 10)