Buildings - owners and tenants

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Whether owning or renting a building or office space, it pays to invest in and manage an energy-efficient work premises.

Energy-efficient buildings lower energy bills, improve health and comfort levels for occupants, and reduce carbon emissions. This has been shown to increase staff productivity and reduce absenteeism.

Building owners

There are many benefits for owners who invest in the energy efficiency of their buildings, including:

lower operating and maintenance costs
attracting new tenants faster
lower tenant turnover
increased market value
commanding higher rents and quicker sales
improved occupants’ productivity
improved reputation.

Energy-efficiency assessments

Conducting an energy-efficiency assessment shows business owners and management how and where energy is used, where to improve usage and equipment and reduce costs.

Energy management practices should be performed at a level appropriate to the size and resources of the business. This is also true for energy-efficiency assessments.

To read more, see our assessment guidance for both small and large businesses.

National Australian Built Environment Rating System (NABERS)

National Australian Built Environment Rating System (NABERS) is a voluntary rating system to measure a commercial building’s energy efficiency.

The NABERS website has an overview on assessments including:

how ratings from 0 to 6 stars are determined
how to find a professional to conduct an accredited rating
how to self-assess buildings for free.

Commercial Building Disclosure (CBD)

The Commercial Building Disclosure (CBD) program requires sellers or lessors of office space with a minimum net lettable area of 1000 square metres to obtain and disclose an up-to-date NABERS energy-efficiency rating.

Building design

When building new commercial premises, consider energy-efficiency measures at the design stage including:

climate and site factors including solar access, adjacent buildings, height and wind
building form, typology and orientation
building envelope including insulation, air-leakage and infiltration, glazing performance and shading
heating, ventilation and cooling (HVAC) including equipment type, thermal mass and passive systems
lighting, plug-in appliances and equipment.

Your Home and Business Victoria have energy-efficiency design tips and resources.

National Construction Code (NCC)

In 2019, the Australian Building Codes Board (ABCB) updated Section J of the National Construction Code (NCC) to include mandatory energy-efficiency requirements for new commercial buildings.

The ABCB offers guides on NCC energy-efficiency requirements for new buildings.

Low emissions building materials

Manufacturing traditional steel, concrete and aluminium produces high levels of carbon dioxide. The NSW Government is working with industry to encourage the voluntary use of low emissions building materials (LEBMs). These include ‘green’ steel and concrete, and alternative products such as geopolymers.

Building retrofit and refurbishment

There are many cost-effective energy-efficiency opportunities when retrofitting or refurbishing existing commercial buildings. Facility Management Australia has an Energy Management Good Practice Guide on how to realise these opportunities.

The Clean Energy Finance Corporation (CEFC) has the Energy in Buildings: 50 Best Practice Initiatives handbook to provide information and raise awareness about initiatives that can help property owners or managers reduce energy costs and cut emissions.

The Low Carbon Living CRC also has a comprehensive Guide to Low Carbon Commercial Buildings – Retrofit on energy-efficient retrofit and refurbishment options.

Energy service companies now offer energy efficiency and rooftop solar PV retrofits for no (or reduced) upfront cost under energy performance contracts or power purchase agreements.

Lighting

Lighting can account for up to 40% of total electricity use in buildings, depending on facility type. There are numerous low-cost and no-cost ways to reduce lighting costs, such as automatic control and removing excess lights.

Commercial LED lighting products are now available to enable retrofit of almost every type of commercial lighting. For instance, it’s possible to replace inefficient T12 or T8 fluorescent bulbs with ‘plug and play’ or modified installation of linear LED replacements. Putting a timer or motion-sensing system in place will further increase savings.

To read more, see the Lighting guide.

HVAC

Significant savings in heating, ventilation and air conditioning (HVAC) energy use can be achieved through load reduction, optimisation and installation of efficient equipment.

To read more, see HVAC guide.

Refrigeration

The energy costs of a refrigeration plant can be reduced by around 40% through adoption of best energy-efficient equipment and techniques.

A technology guide produced by the NSW Government outlines 15 energy saving technologies that can contribute to more energy-efficient refrigeration. While many of these measures require capital outlays, case studies indicate the payback period is often less than 3 years.

To read more, see the Refrigeration guide.

Cooking equipment

There is significant room to improve the design and energy efficiency of ovens. Commercial ovens are often made by small-scale manufacturers and tend not to go through the same rigorous design processes as domestic appliances.

When upgrading commercial ovens, look for the following features:

fully insulated solid doors with seals on all sides
no metal joints that form a thermal bridge from inside to outside
exhaust hoods designed to reduce electricity consumption and increase heat recovery.

Data centres

The use of data centre services is growing as businesses expand their digital hardware resources, procure larger servers and increase online services. Office computers, servers and data centres can use up to 40% of the energy in office buildings.

To read more, see the Data centres guide.

Building management systems (BMS)

Rapid reductions in costs, and improvements in sensors and monitoring systems, are making it more cost-effective to monitor energy. Improved data can be used for:

benchmarking
managing when energy is used
diagnoses of energy waste
optimisation of system performance.

To read more, see the Building management systems guide.

Renewable energy

The continuing fall in the cost of solar PV, combined with longer product warranties, makes it a viable option for many building types. This is especially the case where extensive roofing space is available.

As sunshine often coincides with business operating hours, most of this energy is consumed on site and payback on investment can be achieved in as little as 3 years.

Solar powered heat pumps and solar hot water systems offer additional ways to cut bills and emissions when it is time to upgrade business hot water systems.

The Australian Renewable Energy Agency (ARENA) co-funds demonstration options to optimally integrate renewable energy into buildings. To read more about how ARENA is supporting renewables in Australian buildings, see the ARENA website.

To read more on solar and other renewable energy options, see the Renewable energy guide.

Building tenants

Building tenants can save money and care for the environment by deciding to manage an energy-efficient office space.

See our section on energy management for business for more on how to better understand your energy use and implement energy savings.

Selecting an energy-efficient premises

There are tools available to help compare the energy efficiency of various buildings and offices to inform your decision before renting.

National Australian Built Environment Rating System (NABERS) is a voluntary rating system with design standards that measure a new building’s energy efficiency and give a rating from 0 to 6 stars.

Tenancy ratings are also available for businesses to rate the space they occupy within their office building. As a tenant, you can choose to have your tenancy rated via a standalone NABERS rating process or through NABERS Co-Assess.

The Commercial Building Disclosure (CBD) program offers information for commercial office spaces. There is also an explanation of the Building Energy Efficiency Certificate (BEEC).

The CBD program lets you check the NABERS Energy ratings for different buildings in the same area. Use the CBD search tool to find the most energy-efficient property to buy or rent.

Appliances

Energy ratings are an important tool for comparing the energy efficiency of appliances. They set out minimum energy performance standards (MEPS) and labelling for common appliances in Australia, to help reduce greenhouse gas emissions.

The Energy Rating Label includes a star rating to compare different models of common appliance types. Sometimes models with a high star rating cost a little more upfront but can save you more over the product’s lifetime.

Search the Energy Rating website or download the free energy rating app to compare running costs of different models and estimate the real cost of a product over its lifetime.

Computers and office equipment

Computers and other electronic office equipment use up to 30% of an office’s energy use and contribute to heat build-up.

See our section on energy saving opportunities for small business for more energy-efficient appliance ideas.

CitySwitch

CitySwitch is a free sustainability program supporting office-based businesses to improve energy and waste efficiency.

The website has case studies to demonstrate how commercial offices have improved their energy efficiency and a guide on why you should choose a high-performing building for your next tenancy.

CitySwitch, together with the Energy Efficiency Council, has also developed a briefing for office-based businesses that provides:

guidance on identifying and implementing energy management upgrades
case studies of businesses who have successfully implemented energy upgrades
examples of innovative financing and funding mechanisms.

Split incentives

Split incentives occur when the entity responsible for paying energy bills (the tenant) is not the same as the entity making capital investment decisions (the building owner or landlord). The building owner may not be inclined to make building upgrades when the associated benefits accrue to the tenant. This creates a barrier to investment in energy efficiency measures.

Split incentives can often be addressed through direct engagement between the building owner and tenant to develop mutually-beneficial solutions. There are a range of mechanisms to overcome split incentives and share the costs and benefits of building upgrades. These include:

Green leases
Environmental upgrade agreements (EUAs)
On-bill finance
Energy performance contracts (EPCs)
Equipment leasing

To read more on these mechanisms, see the fact sheet on overcoming split incentives.

For more about energy performance contracting, see the Energy Efficiency Council website.

Green leases

Whether you own or rent a building or office, consider a green lease, also known as a best practice lease. With this type of contract, the tenant and building owner look at ways to jointly lower energy use. This can often result in a financial win for both parties.

The Australian Government has developed a series of case studies on negotiating green leases taken from real-life negotiations. The case studies illustrate a variety of scenarios and outcomes and provide some lessons learned.

The Tenant’s Guide to Green Leasing provides an overview of the basic concepts and elements of green leasing. The guide assists private tenants to achieve better environmental outcomes from the leasing and on-going management of their office space.

Innovations

The Australian Government is supporting innovations in the commercial building sector by funding Cooperative Research Centres (CRCs) and co-funding innovation and knowledge sharing hubs.

Building 4.0 CRC

The Building 4.0 CRC is seeking to transform how buildings are designed and manufactured in Australia by focusing on the use of digital solutions, new products and processes.

The Innovation Hub for Affordable Heating and Cooling

The Innovation Hub for Affordable Heating and Cooling demonstrates and shares knowledge on how renewable energy technology can be optimally integrated with HVAC and refrigeration equipment.