Why Now Is the Best Time for Building Efficiency

Mary Thomas
Associate Director,
Building Innovation Hub

Amidst change, there is always opportunity, and right now is the best time to make energy efficiency investments. It would be hard to overstate the level of change this year in Washington, DC, as the federal government has pulled back on its local real estate holdings, slashed the City budget, and generally shaken up a market still recovering from the long-term shift to telework. To compound stressors, President Trump’s megabill is phasing out a number of federal tax incentives affecting commercial real estate. On top of that, local budget cuts may result in reductions in future funding for energy efficiency programs, though the extent of the changes is not yet known.

However, these immediate changes are not the whole picture and the value proposition for investing in energy efficiency is even stronger now than before. Low performing buildings in the District are required to improve energy performance by the end of 2026, facing financial penalties for noncompliance. The Building Energy Performance Standards (BEPS) deadline was recently confirmed by the DC Council which struck proposed delays from the latest budget legislation. At the same time, all signs point to a higher-cost energy market, which means the payback period for investments will be shorter. Energy efficient buildings also still command higher rents and property values, which will be even more true as utility costs rise.

Furthermore, many states and cities are still moving forward with building performance policies that reward energy efficient, low-carbon buildings. For example, just this summer, Evanston, Illinois passed a building performance standard, and many other cities have upcoming deadlines for their laws, such as Denver and New York City. Many more locations are likely to pass similar policies, as indicated by the commitments of the National Building Performance Standards Coalition.

The opportunity

Real estate projects that begin construction before June 30, 2026 will still qualify for federal tax benefits and rebates, and with the passage of the District’s FY26 budget, funding for available programs, such as the DC Green Bank and the DC Sustainable Energy Utility (DCSEU), has been confirmed through 2026.

The first step is to check your benchmarking data. For properties that must comply with the District’s BEPS, a third-party verification was required in 2024, which means that recent data is accurate and can help you understand how your building is performing year over year and compared to your peers in the market. The next step is to make sure you have an energy audit that shows where your building needs improvement and will provide key data to make business decisions about energy improvements. Retro-commissioning might also be a good option to improve your existing systems.

Next, visit the Hub’s Funding and Financing database, which allows you to search across local incentives, or contact DCSEU to learn what incentives would work best for your properties. For example, DCSEU offers up to $100k in business rebates that make efficiency upgrades, and additional incentives for affordable housing, shelters and clinics serving low- to moderate-income communities. You can also book time with a DCSEU account manager to learn about custom incentives, such as those related to lighting, cooling equipment, and other areas of performance.

The bottom line

While future budgets are uncertain, acting now will reduce uncertainty, and deliver long-term benefits. There is still time to limit risk, and position your organization for future success.