Better Buildings Challenge

Better Buildings Challenge
Name	Better Buildings Challenge
Formation	2011
Founder	Barack Obama
Type	Initiative
Headquarters	Washington, D.C.
Parent organization	United States Department of Energy

Better Buildings Challenge The Better Buildings Challenge is a public-sector energy-efficiency initiative launched to accelerate energy performance improvements across large building portfolios and industrial facilities. It was introduced as part of a suite of measures intended to reduce energy consumption, lower operating costs, and stimulate investment in energy-efficient technologies. The initiative engages a wide array of corporations, universitys, hospital systems, museums, state and city governments, and nonprofit organizations to commit to long-term energy savings targets.

Overview

The program was announced during an address by Barack Obama and administered by the United States Department of Energy (DOE) through the Office of Energy Efficiency and Renewable Energy. It invites large-scale partners from private and public sectors to set commitments and report progress in reducing site energy intensity. The initiative complements other DOE efforts such as the Better Plants Program, the ENERGY STAR certification program run by the Environmental Protection Agency, and the Weatherization Assistance Program by offering recognition, technical assistance, and peer networks. Partners sign memoranda of understanding that align with federal reporting frameworks and capital planning processes used by institutions like the General Services Administration and the Department of Defense.

Goals and Targets

Partners commit to measurable targets—typically a 20 percent improvement in energy intensity over a 10-year period or similar intensity-based reductions. Targets are articulated in terms of site energy use intensity (EUI) or absolute energy consumption, enabling comparisons across portfolios like Walmart, Hilton Worldwide, and Target Corporation. The program emphasizes lifecycle cost analysis and financial metrics consistent with practices from the Securities and Exchange Commission disclosures and institutional investors such as BlackRock. Targets often align with national objectives set out in plans related to the Paris Agreement and federal executive actions on energy and sustainability.

Participating Organizations and Sectors

Participants span multiple sectors: commercial real estate firms (e.g., Hines, AvalonBay Communities), manufacturing companies engaged via the Better Plants Program (e.g., General Motors, Caterpillar Inc.), healthcare systems (e.g., Mayo Clinic, Kaiser Permanente), higher education institutions (e.g., Massachusetts Institute of Technology, University of California system), and municipal portfolios (e.g., City of Boston, City of Seattle). Financial institutions and utilities such as JPMorgan Chase, Wells Fargo, PG&E Corporation, and Con Edison participate in complementary roles by providing financing, performance contracting, and demand-response program coordination. Nonprofit partners include organizations like the Natural Resources Defense Council and the American Council for an Energy-Efficient Economy that contribute research, best practices, and advocacy.

Program Mechanisms and Strategies

The initiative uses several mechanisms: voluntary commitment agreements, partner-to-partner knowledge exchange, technical assistance, and market development for high-efficiency technologies. Key strategies include benchmarking with tools like Portfolio Manager (developed by Environmental Protection Agency), energy audits consistent with standards from the American Society of Heating, Refrigerating and Air-Conditioning Engineers, retro-commissioning, and adoption of advanced metering and building automation systems supplied by firms such as Siemens and Johnson Controls. Financing approaches promoted include energy savings performance contracts (ESPCs), green bonds influenced by issuances from World Bank and municipal issuers, and on-bill financing programs modeled after pilots in New York State and Massachusetts. The program leverages pilot projects and case studies involving technologies like high-efficiency HVAC systems, LED lighting retrofits, variable refrigerant flow, and combined heat and power installations by companies such as ABB and Schneider Electric.

Results and Impact

Partners have reported cumulative energy savings and associated reductions in greenhouse gas emissions, with case studies highlighting significant cost savings and short payback periods in many projects. Reported outcomes include reduced site EUI across diversified portfolios, increased uptake of retrofits by commercial real estate owners like CBRE Group and JLL, and enhanced internal capacity through energy managers and sustainability officers often trained via programs at the National Renewable Energy Laboratory and the Lawrence Berkeley National Laboratory. The initiative has been credited with stimulating markets for energy services, increasing demand for measurement-and-verification firms, and informing federal and state policy dialogues involving the Federal Energy Regulatory Commission and state public utility commissions such as California Public Utilities Commission.

Criticisms and Challenges

Critics point to limitations common to voluntary programs: selection bias toward organizations with existing capacity, challenges in attributing savings to program influence versus broader market trends, and variability in measurement, reporting, and verification practices. Observers from Union of Concerned Scientists and Government Accountability Office-style analysts have noted that voluntary commitments may not fully capture rebound effects, tenant-landlord split incentives in leased space common to firms like WeWork, or the capital constraints faced by smaller property owners. Other challenges include integrating distributed energy resources and resilience standards promoted by organizations such as the National Institute of Standards and Technology with energy-efficiency goals, and ensuring equitable access to financing tools in underserved jurisdictions like certain Native American reservations and rural counties.

Category:Energy conservation in the United States