Energy efficiency upgrades in buildings promise reduced operating costs, improved occupant comfort, job market stimulation and environmental benefits. However, commercial building owners have often resisted pursuing such projects in spite of these strong and clear incentives. This is especially the case when the lease imposes the burden of the capital expense primarily to owner and the tenants reap the savings in operating cost - the so-called "split incentive" problem.

 

A working group convened by the New York City Mayor's Office of Long-Term Planning and Sustainability developed a model clause for the lease to resolve the split incentive. Urban Green Council, the New York City chapter of the U.S. Green Building Council, is leading the outreach effort to help owners, tenants, brokers and attorneys understand how it works. The expectation is that widespread use of the "clause" will create an uptick in EE upgrades.

 

This AGRION webinar will enable attendees to use or recommend the Energy Aligned Clause and understand the concept and some associated nuances. Join us to explore how the Energy Aligned Clause creates a structure that allows both parties share the cost savings of these projects, protect the tenant from retrofit underperformance, and lead to an improved payback period for the owner.