Building owners and tenants


Whether owning or renting a building or office space, it pays to choose and manage an energy-efficient work premises. You can lower carbon emissions and save a lot of money for your business at the same time.

Sizable energy-efficiency gains can be achieved in lighting and heating, ventilation and air conditioning (HVAC). Commercial appliances such as refrigeration, cooking and office equipment can be upgraded to more energy-efficient models.

The issue of split incentives between building owners and tenants can often be addressed by direct engagement and breaking down barriers to develop solutions of mutual benefit. For more information on mechanisms to address this issue, see the fact sheet on Overcoming split incentives.


Owners who invest in the energy efficiency of their buildings can improve asset value due to reduced costs in operation and maintenance. You’ll also raise the amenity levels for the occupants.

Energy-efficient green buildings:

  • attract new tenants faster
  • have lower tenant turnover
  • command higher rents and prices
  • improve occupants’ productivity
  • improve reputation.

Energy-efficiency assessment and ratings

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.

For more information, see our assessment guidance for both small and large businesses.

National Australian Built Environment Rating System (NABERS) is a voluntary rating system with design standards that measure a new 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.

Increasingly, governments and large corporations are using green leases that require owners of office and commercial building space to meet certain energy-efficiency standards. 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 energy-efficiency rating.

Building design

If you’re building new premises, consider energy-efficiency measures at the design stage. You need to think about:

  • materials
  • passive design
  • orientation
  • location.

If you do this, you can make the most of the natural surroundings. You’ll also rely less on heating and cooling systems.

Assess all measures for any potential energy savings. Compare them to initial cost and consider embodied energy. As an example, you might not need expensive double-glazed windows if you install energy-efficient reverse-cycle air conditioning.

New buildings must comply with government standards and regulations. The National Construction Code and the Australian Building Codes Board offer guides to energy-efficiency requirements.

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


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. Combining such measures with the upgrading of lighting equipment can result in large savings in lighting costs.

Natural lighting

Consider how you can maximise natural light in your office space.

  • Use lighter colours for ceilings, walls, floors and furniture so the light is reflected more effectively within the space.
  • Rearrange rooms to achieve the most effective lighting conditions.
  • Avoid excess illumination from artificial lighting by applying task appropriate lighting.
  • Improve natural daylighting through building design or retrofitting.

Lighting upgrades

There are excellent opportunities for energy savings whenever upgrades or refurbishments are planned. For instance, it’s possible to replace inefficient T12 or T8 fluorescent bulbs with new super T8 and T5 fluorescent bulbs, or with ‘plug and play’ linear light emitting diode (LED) replacements. Compact fluorescent lamps (CFLs) can also be replaced with LEDs.

LEDs can also provide greater amenity for occupants, and are considered safer as they don’t contain mercury as CFLs do. Reduction in the cost of LED lighting in recent years makes the business case for upgrades even stronger. Putting a timer or motion-sensing system in place will further increase savings.

For more information see the Lighting guide.

Heating, ventilation and air conditioning (HVAC)

Significant savings in HVAC energy use can be achieved through clever design, building retrofits and installation of efficient equipment.

Save on heating and cooling energy costs with these steps:

  • Insulate walls and ceilings.
  • Reduce heat generation from lighting by upgrading to LED.
  • Design spaces that can be closed off to minimise heating and cooling needs.
  • Avoid unwanted heat gain or loss through windows. Install curtains or blinds and window shading combined with double-glazing or low-emissivity windows.

Existing HVAC systems

There are various ways to optimise your HVAC system:

  • Delay HVAC start-time each morning.
  • Use air-conditioning only when and where it’s required.
  • Minimise cooling requirements through economy cycles and user-controlled local environments, such as desk fans.
  • Use high-efficiency fans and motors, demand-controlled ventilation and variable speed drives on air conditioners.
  • Isolate fan motors and other heat-generating components from the supply airstream.
  • Streamline air distribution systems, where possible, through good ductwork design to reduce air resistance.
  • Conduct proper maintenance by cleaning distribution systems (fans, filters and air ducts) quarterly and regularly tuning all HVAC equipment and sensors.

HVAC upgrades

The efficiency of HVAC equipment has improved substantially in recent years, and simple replacement upgrades can bring energy savings of 30% or more.

Demand management and HVAC optimisation can also bring cost savings by enabling a downsizing of existing systems. This also has the co-benefit of reducing water use.

When it comes time to upgrade HVAC, options such as radiant chilled-ceiling cooling and displacement ventilation can achieve significant reductions in mechanical HVAC requirements.

For more information, see the HVAC guide.


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 commercial refrigeration. While many of these measures require capital outlays, case studies indicate the payback period is often less than three years.

For more information, see the Refrigeration guide.

Cooking equipment

There is significant room to improve the design and energy efficiency of ovens. Commercial ovens are usually made by smaller 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 to ensure the oven is as efficient as possible:

  • Fully insulated solid doors with seals on all sides.
  • No metal joints that form a thermal bridge from the inside to the outside.
  • Exhaust hoods designed to reduce electricity consumption and increase amount of heat recovered by the system.

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.

For more information 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 and optimisation of system performance.

For more information, see the Building management systems guide.

Solar PV

The continuing fall in the cost of solar PV makes this technology a viable option for some building types, especially 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 to 5 years. 


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

When leasing building space, energy costs can be reduced 25% by leasing energy-efficient space and implementing energy saving initiatives. For example, by choosing a tenancy with energy-efficient lighting, businesses can save between $30,000 (for a 500m2 space) and $140,000 (for a 2000m2 space) over a 5-year lease.

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’s 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.


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. The more stars a product has, the greater its efficiency rating.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.

To benchmark the efficiency of heating, ventilation and air conditioning (HVAC) systems in relation to best practice, try the Calculating Cool tool.

Computers and office equipment

Energy-efficiency savings can be achieved through upgrading computers and other electronic equipment, as these use up to 30% of an office’s energy use and contribute to heat build-up.

Ensure new electronics purchases, such as photocopiers, laptops and computer systems, are the best performers in their category in relation to energy usage.

Check out the page on energy saving opportunities for small businesses to find more ideas on energy efficiency in appliances.


CitySwitch is a free sustainability program supporting office-based businesses to improve energy and waste efficiency. You can use the program’s case studies to see how commercial offices have improved their energy efficiency and pick up some ideas on how to make your workspace even better.

Some case studies include:

  • AMP Capital, which got staff to compete to lower their energy and improve recycling.
  • Australian Corporate Property and Projects (ACORPP), which engaged staff in their office move and other sustainable initiatives
  • Psaros, the first mid-tier property developer in Western Australia to create a carbon neutral head office
  • Steensen Varming, a forward-thinking, daylight-harvesting company that signed a green lease
  • Viridis, a small design agency that involved their team in the choice of a sustainable office space
  • WT Sustainability, which used in-house skills to reach high energy-efficiency targets in their new workplace

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.

See the Green leases page for more information.


Co-generation and tri-generation

Co-generation (co-gen) and tri-generation (tri-gen) systems are onsite power-generating methods that harness waste heat. Local generation has the added benefit of avoiding transmission and distribution network losses.

Co-gen systems produce electrical power while capturing the heat that arises as a by-product of the process. Tri-gen also uses some of the remaining lower grade heat to drive cooling systems as well as capturing heat from the initial power generation.

Both co-gen and tri-gen systems are appropriate to use at sites with high demand for heating, such as hotels, hospitals, industrial laundries, data centres and swimming pools. They are especially cost-effective when heating and/or cooling demands are present throughout the year.

Tri-gen can be cost-effective in facilities such as large data centres, which require onsite electricity generation and have substantial year-round cooling requirements. In these cases, heat by-product can be used for cooling in an absorption chiller.

Developments in small-scale technologies such as microturbines and fuel cells are also opening up new opportunities for the application of co-gen.

Cool roofs

Reflective cool roofs are achieved by painting surfaces with special coatings or by applying a covering material. This can reflect solar radiation by up to 85% and can be cost-effective in decreasing cooling costs in some situations.

Cool roof suitability depends on a number of factors, especially the local climate and building type. Areas with long hot summers and mild (or no) winters are generally the most suitable for cool roofs. Low-rise buildings with expansive metal roofs are especially exposed to solar radiation and may benefit the most from cool roof design.

Low embodied-energy materials

The concept of embodied energy has started to be included in life-cycle energy calculations of buildings.

The average commercial building contains tens of thousands of gigajoules of energy embodied in its construction materials, especially where large amounts of concrete and steel are used. Databases such as the EcoSpecifier can assist in selecting innovative materials with low embodied energies.

Hybrid dry air/water cooling systems

An Australian innovation in air-conditioning systems is hybrid dry air/water cooling systems, which use 80% less water than the typical water-based cooling towers. This also significantly reduces the life-cycle energy consumption associated with water use, such as the treatment and pumping of fresh water to buildings.

More information

Australian Government

Building management systems guide

HVAC guide

Buildings case studies

Energy-mass balance - commercial buildings

Buildings research and analysis

Green leases

Commercial Building Disclosure (CBD) Program 

National Australian Built Environment Rating System (NABERS) 

Australian Renewable Energy Agency (ARENA)

Emissions Reduction Fund 

Energy Efficiency in Government Operations (EEGO)

Other resources

HVAC factsheet - Overcoming split incentives

Calculating Cool Sustainability Victoria

Energy efficiency Australian Building Codes Board (ABCB)

Built environment Climate Works

Energy efficiency in commercial buildings Energy Efficiency Council

Electrifying Space Heating in Existing Commercial Buildings: Opportunities and Challenges American Council for an Energy-Efficient Economy (ACEEE)

Emerging Energy-Saving HVAC Technologies and Practices for the Buildings Sector ACEEE

Energy efficiency International Energy Agency (IEA)

The Fifth Estate