Guide to NYC Building Energy Ratings & Improving Your Grade (LL95 LL97)

Guide to NYC Building Energy Ratings & Improving Your Grade (LL95 LL97)

What is Local Law 95 and 97, and How Can a Building Improve its Grade?

***Updated Spring 2022***

New York City’s building energy ratings can have enormous implications for property owners—and if your building receives a lower grade, you might pay big in the long run.

The rating system went into effect in 2018 as Local Law 33, but in 2019, Local Law 95 added a new requirement: Most building owners must publicly display their energy efficiency letter grades at their entrances. 

The city’s long-term goal is to reduce carbon emissions by 40% by 2030 and by 80% by 2050. Beginning in 2024, New York will begin enforcing carbon caps on most buildings larger than 25,000 square feet under Local Law 97. Currently, the city doesn’t levy fines for inefficient buildings, but renters—and buyers in particular—might avoid properties with poor grades. 

Fortunately, by upgrading from traditional HVAC systems, many buildings can earn better ratings while lowering their utility bills. Below, we’ll provide an overview of Local Law 95 in NYC and offer a strategy for improvement.

Not sure where your building stands? BlocPower uses proprietary technology to offer building owners free energy assessments and action plans including custom designed electric heating and cooling systems.

Click here to get your free expert assessment.

NYC Building Energy Ratings: An Overview 

An NYC building efficiency rating demonstrates whether a property meets or exceeds a reasonable standard for energy and water consumption. The ratings utilize energy efficiency scores from the Environmental Protection Agency's (EPA) Energy Star Portfolio Manager, which compares energy performance to “similar buildings in similar climates.” 

In other words, if you own a brownstone that uses 90% less electricity than other brownstones, you’ll likely earn an excellent grade.  Here’s how the grading system is organized: 

  • A—scores equal to or greater than 85
  • B—scores equal or greater to 70 but less than 85
  • C—scores equal to or greater than 55 but less than 70
  • D—scores less than 55

A building will receive an “F" rating if the owner does not submit the required information for benchmarking. Buildings that are exempted from benchmarking receive a grade of “N” for “none.”

“Even the threat of fines has not created as much of a reaction as these letter grades on the front of the buildings.” —BlocPower founder & CEO Donnel Baird
Local Law 95 grades are improving, but many buildings underperform

Does Local Law 95 apply to my building? 

Local Law 95 in NYC applies to hotels, offices, retail stores, houses of worship, and some multi-family buildings and other properties. Typically, it applies to buildings with 20 or more units, though this isn’t strictly the case since occupancy areas vary by building.

To comply, owners must submit benchmarking data by May 1st every year, then post energy efficiency grades “in a conspicuous location near each public entrance” by October 31st. 

An older HVAC system can hurt your score and lead to Local Law 97 fines.

While water usage is an important aspect of Energy Star’s scores, in NYC, a building's energy consumption plays a much more significant role in grading. 

Some property owners can improve their grades by investing in LED lighting, weatherproofing, and other low-cost upgrades. However, properties with low building energy efficient ratings may need more extensive retrofits. 

On average, heating expenses make up about 29% of residential utility bills according to the Department of Energy. While insulating your property can improve the efficiency of your boiler or furnace, older units have a much lower annual fuel utilization efficiency (AFUE) than modern appliances. For example, a low-efficiency combustion furnace might have an AFUE as low as 56%, which means that it wastes about 44% of its fuel—and that’s before the heated air enters your building’s ductwork.

The solution: Upgrade to a modern, ultra-efficient heat pump system. 

A heat pump system provides both heating and cooling while reducing utility costs and carbon output. 

Heat pumps are 2-4 times as efficient as conventional gas, oil, or electric resistance heating, and they provide an excellent return on investment: A cold-climate heat pump can reduce electricity use for heating by up to 50% compared with electric furnace and electric baseboard systems while improving air quality and enhancing tenant comfort. They are also considerably more efficient and effective than window air conditioners. 

Wondering how heat pumps work?

By drawing heat energy from ambient air, heat pumps heat or cool indoor spaces without combustion. Some systems utilize a building’s existing ductwork, while others deliver air directly through indoor units.

Learn more by reading our go-to guide to air source heat pumps.

Energy efficient heat pumps in your building

New York’s energy incentive programs can help building owners upgrade their HVAC systems.

Retrofitting your old HVAC system can help your building earn a better NYC building energy rating, but there’s another good reason to make the switch: By upgrading to heat pumps, BlocPower customers save from 20-40% on their heating and cooling costs. 

To reduce the cost of retrofit projects, our experts take advantage of energy rebates and tax programs. For some types of buildings, these programs can reduce the cost of heat pump installation by tens of thousands of dollars.

Through Energy Service Agreements (ESAs) and other financing options, we help our customers enjoy the benefits of clean heating and cooling technology—in many cases, with no money down for installation. 

BlocPower uses proprietary technology to provide building owners free, no obligation energy assessments. Want to learn more? Answer a few questions about your building to get started.

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