Thresholds and deadlines below are as published by each city or authority at the time of review; confirm with the local code before scheduling.
A commercial building energy audit is a structured survey of how a building uses energy, carried out by a qualified auditor against a recognised standard, that produces a list of measures with their cost, savings and payback. It is required by law in a growing list of cities on a fixed cycle, it is the starting point of every emissions-reduction plan that has to survive a capital committee, and it is the document a lender, a buyer or a GRESB submission asks for when the question turns from "what does the building use" to "what are you doing about it".
For the property manager the audit is a project to arrange, not a report to read. Someone has to determine when it is due, choose the level, appoint the auditor, assemble the data the auditor needs, walk the building with them, receive the findings, and turn them into a capital plan with owners and dates. This guide covers each of those steps: when an audit is required and where, the three ASHRAE levels and which one to buy, what the auditor needs from you, the cost ranges, how to turn findings into a capital plan, and how to record the findings against the asset so they are still findable at the next cycle.
At a glance
| Question | Answer |
|---|---|
| What is a commercial building energy audit? | A survey of a building's energy use by a qualified auditor, to a standard such as ASHRAE Standard 211, producing a list of energy conservation measures with cost, savings and payback |
| What are the ASHRAE levels? | Level 1 is a walk-through and utility analysis; Level 2 is a detailed survey with measure-by-measure costs and savings; Level 3 is investment-grade analysis of specific capital measures with modelling and monitoring |
| Where is an audit required by law? | New York City (Local Law 87, every 10 years, buildings over 50,000 sq ft), Los Angeles, San Francisco, Atlanta, Seattle and others in the US; ESOS in the UK and the Energy Efficiency Directive in the EU for large organisations |
| What does retro-commissioning add? | A hands-on test and correction of existing systems (controls, schedules, setpoints, sensors) so they run as designed; low-cost, fast-payback, and required alongside the audit under LL87 |
| What does it cost? | Planning ranges: Level 1 about $0.05 to $0.15 per sq ft; Level 2 about $0.15 to $0.35; Level 3 from $0.35 to over $1.00; retro-commissioning about $0.20 to $0.50 |
| What does the auditor need from you? | Two to three years of utility data, drawings, equipment inventories, BMS access, occupancy and operating schedules, past audits and works, and a site contact who can open every plant room |
When an audit is required
Audits are required by three kinds of rule: city building performance laws that mandate audits on a cycle, national schemes that mandate audits for large organisations, and contractual or financial requirements (lender covenants, green loan terms, investor frameworks) that expect one. The table covers the main statutory ones.
| Jurisdiction | Law | Covered buildings | What is required | Cycle and deadline |
|---|---|---|---|---|
| New York City | Local Law 87 (2009) | Buildings over 50,000 gross sq ft; two or more buildings on one tax lot or condominium board totalling over 100,000 sq ft | ASHRAE Level 2 energy audit plus retro-commissioning of base building systems, filed as an Energy Efficiency Report signed by a New York PE or RA; audit by a CEM, CEA or equivalent | Every 10 years; the year is set by the last digit of the tax block number (block ending in 6 files in 2026); due 31 December; audit must be less than 4 years old at filing; penalty $3,000 for the first year late and $5,000 for each further year; extension request by 1 October with a $155 fee |
| Los Angeles | Existing Buildings Energy and Water Efficiency (EBEWE) | Buildings of 20,000 sq ft and over | Energy audit and retro-commissioning, or an exemption (for example an ENERGY STAR score of 75 or higher, or a demonstrated reduction in energy use) | Every 5 years, phased by building size; due 1 December of the compliance year |
| San Francisco | Existing Commercial Buildings Energy Performance Ordinance | Non-residential buildings of 10,000 sq ft and over | ASHRAE Level 1 audit for 10,000 to 49,999 sq ft; Level 2 for 50,000 sq ft and over; or retro-commissioning or certification pathways | Every 5 years; audit filed with the Department of the Environment |
| Atlanta | Commercial Buildings Energy Efficiency Ordinance | Commercial buildings of 25,000 sq ft and over | ASHRAE Level 2 audit, with exemptions for ENERGY STAR certification, LEED and other pathways | Every 10 years |
| Seattle | Building Tune-Ups | Non-residential buildings of 50,000 sq ft and over | A tune-up (retro-commissioning-style assessment and corrections of operations) by a qualified tune-up specialist; alternative pathways for high performers | Every 5 years, phased by size |
| United Kingdom | Energy Savings Opportunity Scheme (ESOS) | Large undertakings (250 or more employees, or turnover over £44 million and balance sheet over £38 million), covering their buildings and transport | Audit of 95% of total energy consumption by a lead assessor, with an action plan and annual progress updates from Phase 3 | Every 4 years; Phase 4 compliance date 5 December 2027 |
| European Union | Energy Efficiency Directive (recast 2023) | Enterprises above consumption thresholds | Energy management system for average annual consumption over 85 TJ; energy audit every 4 years for consumption over 10 TJ; as transposed by each member state | Deadlines from October 2026 and October 2027 as transposed |
Two things are worth noting for a portfolio spread across cities. The energy audit requirement LL87 imposes is the most prescriptive of the group, and the one with the longest lead time because the audit must be recent and the report needs a PE or RA signature. The emissions laws in New York and Boston do not themselves require audits, but the audit is how an owner finds the measures that bring the building under its emissions limit, and in New York the LL87 audit and the LL97 penalty maths belong in the same planning file. And several ordinances exempt buildings with a recent ENERGY STAR certification, a LEED certification or a demonstrated reduction, which is a reason to keep those certifications current and recorded against the asset.
ASHRAE levels compared
ASHRAE Standard 211 defines three levels of commercial building energy audit, and the ASHRAE Level 1 2 3 audit choice depends on what the audit is for: compliance, planning, or investment.
| Level 1: walk-through | Level 2: energy survey and analysis | Level 3: detailed analysis of capital measures | |
|---|---|---|---|
| Scope | Utility bill analysis, benchmarking against similar buildings, a brief site walk, interviews with operators | Everything in Level 1 plus a detailed survey of envelope, lighting, HVAC, domestic hot water, plug loads and controls; end-use breakdown; operator interviews | Everything in Level 2 plus engineering analysis of selected capital measures, often with hourly energy modelling, sub-metering or monitoring over weeks, and detailed cost estimates |
| Output | List of low-cost and no-cost measures with rough savings; list of capital measures worth further study; energy use intensity and benchmark | Measure-by-measure list with estimated cost, savings and simple payback; a financial summary; identification of measures needing Level 3 study | Investment-grade estimates for the selected measures, with modelled savings, costs to a quotation standard, and a risk assessment suitable for a capital committee or lender |
| Time on site | Half a day to a day | One to several days depending on size and system complexity | Weeks, including monitoring periods |
| Typical use | Portfolio screening; deciding which buildings need a Level 2; a first look at an acquisition | Compliance (LL87 and most city ordinances specify Level 2); the capital plan for a single building; GRESB and investor evidence | Justifying a major plant replacement, envelope works or a net zero pathway; performance contracts; green loan conditions |
| Who performs | Energy manager or auditor | Certified auditor (CEM, CEA or equivalent) with mechanical and electrical competence | Engineering team, often with modelling specialists |
Retro-commissioning is not one of the levels. It is a separate process, usually run alongside a Level 2 audit, in which the existing systems are tested and corrected so they operate as designed: control sequences checked, schedules matched to occupancy, setpoints and deadbands reset, sensors calibrated, economisers and dampers freed, simultaneous heating and cooling stopped. It produces no capital list; it produces a set of corrections that are made on the spot or within weeks, and it is the reason the first year after an audit often shows savings before any capital has been spent. LL87 requires it as a defined list of items on base building systems; Seattle's tune-up is a version of it.
The practical choice for most managers is a Level 2 audit with retro-commissioning, because it satisfies the compliance ordinances, produces the measure list a capital plan needs, and captures the operational savings immediately. Level 1 is for screening a portfolio to decide where the Level 2 money goes. Level 3 is bought for specific measures after the Level 2 has identified them, not for the whole building.
What the auditor needs from you
The quality of a commercial building energy audit is set before the auditor arrives, by what the manager can hand over. An auditor who spends the first two days reconstructing the utility history and finding the drawings produces a thinner report for the same fee.
| Item | Detail | Why |
|---|---|---|
| Utility data | 24 to 36 months of monthly consumption and cost for every fuel and water, landlord and tenant supplies, with meter and account references; interval data if available | The baseline and benchmark; without tenant data the whole-building intensity is incomplete |
| Building basics | Gross and net floor area by use, year built, storeys, occupancy and operating hours, number of occupants, vacancy | Normalisation and benchmarking |
| Drawings and specifications | Mechanical, electrical and plumbing drawings, as-builts, controls drawings, envelope details | Equipment inventory and system understanding |
| Equipment inventory | Age, capacity, condition and maintenance history of boilers, chillers, air handlers, pumps, fans, lighting, DHW, lifts, transformers | Identifies end-of-life plant where replacement is the measure |
| BMS access and trend logs | Read access to the building management system; trend data for setpoints, schedules, valve and damper positions | Retro-commissioning and control findings |
| Past reports and works | Previous audits, commissioning reports, retrofit records, EPC or ENERGY STAR reports, any incentive applications | Avoids repeating measures already done; shows what worked |
| Tenant information | Fit-out plans, supplementary plant, tenant operating hours, sub-meter data where the landlord holds it | Separates base building from tenant loads |
| Site contact and access | A person who can open every plant room, roof and riser, and who knows how the building is actually run | The walk-through findings depend on it |
| Constraints | Lease events, planned works, budget cycle, any plant already scheduled for replacement | So the measures are timed to what is possible |
The utility data is the item that most often delays the audit. Collecting it monthly through the year, with the tenant supplies included, is covered in our guide to utility data for ESG reporting, and the audit is one of the reasons to have that collection running before it is needed.
Cost ranges
Audit fees vary with building size, system complexity, the level and the market, and any figure should be treated as a planning range rather than a quotation. The ranges below are consistent with what managers in US markets have been paying in the mid-2020s; UK and EU fees are of a similar order per square metre once converted.
| Service | Planning range (US$ per sq ft) | 200,000 sq ft office |
|---|---|---|
| ASHRAE Level 1 | $0.05 to $0.15 | $10,000 to $30,000 |
| ASHRAE Level 2 | $0.15 to $0.35 | $30,000 to $70,000 |
| ASHRAE Level 3 (selected measures) | $0.35 to over $1.00 | $70,000 to $200,000 and above, depending on the measures studied |
| Retro-commissioning | $0.20 to $0.50 | $40,000 to $100,000 |
The energy audit cost per square foot falls as buildings get larger, because much of the fee is fixed (mobilisation, report writing, data analysis), and rises with system complexity (central plant with multiple chillers and a complex BMS costs more to survey than packaged rooftop units). Bundling the Level 2 audit and retro-commissioning with one firm, and auditing several buildings in one portfolio under one engagement, usually brings the per-square-foot figure to the low end of the range.
The return is on the other side of the ledger. The most cited study of retro-commissioning, Lawrence Berkeley National Laboratory's 2009 review of 643 buildings, found a median cost of $0.30 per square foot, median energy savings of 16%, and a median simple payback of 1.1 years for existing buildings. Audit measure lists typically contain no-cost and low-cost items that pay back inside a year, capital items with three-to-seven-year paybacks, and envelope or plant replacements that only make sense at end of life or under an emissions penalty. A manager who spends $60,000 on a Level 2 audit and retro-commissioning for a 200,000 square foot building with a $600,000 annual energy bill, and who then implements the operational findings alone, is in the region of the study's 16% saving, or roughly $96,000 a year, before any capital measure is approved.
Turning findings into a capital plan
The audit report arrives as a list of measures. The capital plan is that list sorted, scheduled and owned.
The first sort is by category: operational and no-cost measures (schedules, setpoints, controls corrections) that the facilities team implements now; low-cost measures under the manager's discretionary limit (lighting controls, sensors, pipe insulation, VFDs on small motors) that go into this year's operating or minor works budget; capital measures (plant replacement, lighting retrofit, envelope, heat pump conversion) that go to the owner with a business case; and measures dependent on lease events or tenant cooperation that go into the lease-event calendar.
The second sort is by financial and compliance value together. Simple payback alone ranks the cheap measures first, which is right for the operational tier, but it undervalues measures that avoid an emissions penalty or an MEES exemption. For a building under Local Law 97, each tonne of CO2e avoided is worth $268 a year in penalty avoided, and that figure belongs in the measure's savings line. For a UK building over 1,000 square metres under the MEES 2031 standard, a measure that moves the EPC from D to B has a value beyond its energy saving. The business case for each capital measure should show energy saving, penalty or compliance value, maintenance saving from replacing end-of-life plant, any incentive or tax relief, and the cost of doing nothing.
The third step is scheduling against the building's own calendar: plant that is due for replacement in the maintenance plan (replace it with the efficient option rather than like-for-like), lease expiries and refits that give access to tenant areas, the owner's capital budget cycle, and the compliance deadlines (the next LL87 filing, the emissions limit step-down, the MEES date). The output is a measure list with, for each item: category, cost, savings, payback, compliance value, owner, funding source, scheduled year and the lease or maintenance event it depends on.
Where the landlord needs to recover the cost of measures from tenants, the mechanism is the service charge or operating expense clause, and it only works if the lease permits improvement recovery; our guide to green lease clauses sets out the cost recovery clause that makes it possible.
Recording audit findings against the asset
The audit is a ten-year document in New York and a five-year document in Los Angeles and San Francisco, and the measures it lists are implemented over several years by people who may not have been in the building when it was written. If the report lives in a consultant's PDF in a shared folder, the next cycle's auditor starts again and the capital plan loses track of what was done.
The findings should be recorded against the building's asset register: each measure as a record against the asset it concerns (the chiller, the lighting system, the BMS, the envelope), with the audit reference, the recommended action, the estimated cost and saving, the status (recommended, approved, scheduled, completed, rejected with reason), the date completed and the actual cost. The audit report and the retro-commissioning findings sit as documents against the building, alongside the certifications and the compliance filings, with the next audit due date as a dated reminder with an owner.
In RIOO on NetSuite, the utility and asset management module tracks the building's assets with their condition, maintenance history and lifecycle data, holds the compliance documentation and scheduled inspections against the property, and records the building's utility consumption from bills and meter reads, which is the baseline the audit is measured from. The corrective actions from retro-commissioning and the works from approved measures run through service request and task management as work orders assigned to technicians or vendors and monitored to completion, and the contractors' invoices come through vendor management and AP with PO matching. That is what lets the next audit start from what was done rather than from the last report.
Water benchmarking
Several of the ordinances above cover water as well as energy, and GRESB scores water intensity separately. A water audit follows the same pattern at lower cost: utility data for the period, an inventory of fixtures, cooling tower make-up and blowdown, irrigation and any process use, a leak check by comparing night-time flow with daytime, and a measure list (fixture replacement, cooling tower controls, irrigation scheduling, leak repair). The variance check on monthly water consumption described in the utility data guide catches most leaks before an audit does, and a building with sub-metered cooling tower make-up can usually explain its water use without a separate study. Los Angeles's EBEWE includes water in its benchmarking, and ENERGY STAR Portfolio Manager tracks water use intensity alongside energy.
Tenant ESG requests
Tenants increasingly ask the landlord for the building's audit findings and emissions pathway, because their own reporting needs the building's data and their own targets depend on the base building performance. The audit report, or a summary of it, is a reasonable thing to share under a cooperation clause, and the measures that need tenant cooperation (access for works, changes to tenant plant, data sharing) are best raised with the audit in hand rather than in the abstract. A tenant who has seen that the landlord's plan reduces the building's energy by 20% over four years is more likely to agree the licence to alter and the data-sharing terms that make it possible. Where the tenant asks for measures inside its own premises, the audit can be extended into the demise at the tenant's cost, and the findings recorded against the lease as well as the asset.
Energy audit preparation checklist
| Step | Done when |
|---|---|
| Determine the requirement | The building's audit obligation (law, cycle, level, deadline) is confirmed and the due date is in the compliance calendar |
| Check exemptions | ENERGY STAR, LEED or other exemption pathways checked and, if available, the certification is current and filed |
| Choose the level | Level 1, 2 or 3 selected, with or without retro-commissioning, based on the purpose |
| Appoint the auditor | A qualified auditor (CEM, CEA or equivalent; PE or RA sign-off where required) engaged, with a scope that names the standard and deliverables |
| Assemble utility data | 24 to 36 months of monthly consumption and cost for every fuel and water, landlord and tenant, with meter references |
| Assemble building documents | Drawings, equipment inventory, BMS access, past audits and works, certifications |
| Brief operations | Site contact appointed; access to every plant space arranged; operating schedules and known issues written down |
| Walk the building with the auditor | Manager or facilities lead attends the site survey |
| Receive and review the report | Measures reviewed with the auditor; questions on costs and savings resolved |
| Implement retro-commissioning corrections | Operational corrections made and verified within weeks |
| Build the capital plan | Measures sorted, valued, scheduled and owned; business cases prepared for capital items |
| File the report | Compliance filing submitted before the deadline, with the filing receipt retained |
| Record against the asset | Report, findings and measure records entered against the building and its assets; next audit due date set |
Frequently asked questions
Q1. What is a commercial building energy audit?
A survey of how a building uses energy, carried out by a qualified auditor to a standard such as ASHRAE Standard 211, that identifies energy conservation measures and estimates the cost, savings and payback of each. It is required on a fixed cycle in several US cities and for large organisations in the UK and EU, and it is the basis of any credible emissions-reduction or capital plan.
Q2. What is the difference between ASHRAE Level 1, 2 and 3 audits?
Level 1 is a walk-through with utility analysis and a rough list of measures. Level 2 is a detailed survey of every system with a measure-by-measure list of costs, savings and paybacks; it is the level most city ordinances, including Local Law 87, require. Level 3 is an investment-grade analysis of selected capital measures with modelling and monitoring, used to justify major works.
Q3. What does Local Law 87 require?
For New York City buildings over 50,000 square feet (or 100,000 square feet combined on one lot), an ASHRAE Level 2 energy audit and retro-commissioning of base building systems every ten years, filed as an Energy Efficiency Report by 31 December of the year set by the last digit of the tax block number. The audit must be less than four years old at filing. Late filing carries a $3,000 penalty for the first year and $5,000 for each further year. Buildings with recent ENERGY STAR certification may be exempt from the audit component.
Q4. What is retro-commissioning?
A systematic test and correction of a building's existing systems so they operate as designed: control sequences, schedules, setpoints, sensor calibration, dampers and economisers. It is low-cost and fast-payback; LBNL's 2009 study of 643 buildings found a median cost of $0.30 per square foot, 16% median energy savings and a 1.1-year median payback. Local Law 87 requires it alongside the audit.
Q5. How much does a commercial energy audit cost?
As planning ranges per square foot: Level 1 about $0.05 to $0.15, Level 2 about $0.15 to $0.35, Level 3 from $0.35 to over $1.00 for the measures studied, and retro-commissioning about $0.20 to $0.50. Fees per square foot fall with building size and rise with system complexity, and bundling buildings or services under one engagement brings them down.
Related reading
- Utility data for ESG reporting: collecting it from your property system
- ESG in property management: a practical framework for operators
- Local Law 97 compliance guide
- BERDO reporting: Boston's emissions rules for property managers
- MEES and commercial EPC rules: what landlords must do before 2031
- Green lease clauses: what they oblige and how to draft them
