Energize Denver Ordinance: How Solar Helps Your Building Comply With Requirements

If you own or operate a building in Denver, you’ll want to pay close attention: When the City launches its new Energize Denver program, it could cost commercial buildings some serious green if they fail to hit upcoming energy usage targets. How much money are we talking about? Depending on the size, age, and category of the facility, fines could easily range anywhere from hundreds of thousands to millions of dollars per year.  

The good news is there are a whole host of ways to improve a building’s energy performance — from electrification to deploying renewables. In this blog post, we’ll guide you through the key components and requirements of the new regulations and explore why implementing an onsite solar energy system could be a solution for you.

(Related: Understanding the Alternative Fuel Vehicle Refueling Property Credit For Businesses)

What Is the Energize Denver Ordinance?  

In November 2021, the Denver City Council passed the Energize Denver ordinance with a goal of reaching net-zero greenhouse gas (GHG) emissions by 2040. It requires commercial and multi-family buildings, which comprise nearly half of Denver’s GHG emissions, to meet new energy performance standards.  

After gathering benchmarking data in 2019, performance targets were set for each building type based on the top 15% of energy-performing buildings at the time. The rules also emphasize replacing gas-powered space and water heaters at the end of their lives with electric models, as burning less natural gas will also improve indoor and outdoor air quality.

For owners, the benefits of greener buildings are improved ROI, higher property values, and reduced energy bills and operating costs. According to Denver’s Office of Climate Action, Sustainability and Resiliency (the agency spearheading the program), high-performance buildings capture an additional $18.56 in value per square foot from enhanced employee productivity, retention, and wellness, plus utility and maintenance savings.

Energize Denver Requirements for Commercial Buildings

The program splits buildings into two categories based on their size and usage:  

• Commercial and multifamily buildings 25,000 square feet and up must reduce their greenhouse gas emissions by 30% from the 2019 baseline and report annual energy usage.  
• Smaller buildings with floor areas between 5,000 and 24,999 square feet must reduce energy use by demonstrating that 90% of their lights are LED or they’ve achieved equivalent power density.  

There are several commercial exceptions:

• Because of the small sample size, the following building types don’t have category averages: aquariums, museums, zoos, convention centers, data centers, fitness centers, ice rinks, parking facilities, and utilities. Each site is unique, and instead must achieve a general 30% reduction from their self-reported 2019 baseline.
• Due to their energy intensity, buildings designated for manufacturing, agricultural, or industrial use are currently awaiting final guidelines.  

How Energize Denver Is Enforced

The Office of Climate Action, Sustainability and Resiliency (CASR) combines a building’s energy usage information into a single metric called Site Energy Use Intensity (EUI) to measure energy performance targets. EUI is calculated as one-thousand British thermal units (kBtu) divided by square footage. The lower a building’s EUI score, the higher its energy efficiency.  

Every commercial and multi-family building 25,000 square feet and larger must report annual energy use and meet an Energy Use Intensity target by 2030, or face penalties. To ensure buildings are making continuous improvements in the lead-up to the 2030 goal, step-down or interim targets have been established for 2025 and 2027.  

Denver building owners received their EUI targets in February 2023. The City encourages everyone to review their building’s information in the Performance Requirements Look Up Tool or interactive benchmarking map, as each building's baseline and interim EUI targets are unique.

Building owners verify they are meeting their performance targets by submitting annual Benchmarking Reports. Those who fail to meet their interim targets will have to pay 30 cents per kBtu used above the threshold. Owners who initially meet their 2030 targets but don’t maintain the required EUI levels will be penalized 5 cents per additional kBtu consumed.  

Meeting Energize Denver Targets With Solar

There’s no beating around the lightbulb: Energize Denver’s electrification targets are ambitious. Owners and managers of larger buildings will have to make upgrades to electrify their operations and meet their obligations under the program — simply improving lighting just won't cut it. For this reason, installing an onsite solar energy system may be a great way to meet part or all of your reduction requirements.  

Calculating the Value of Solar Under Energize Denver  

Solar energy production, measured in kilowatt-hours (kWh), is credited toward your building’s electricity consumption under the Energize Denver ordinance, lowering your EUI. Solar systems can be installed onsite or offsite, and the generation still counts whether you retain the renewable energy credits or not. (Some facilities sell their solar energy credits to the utility, for example, under a net metering program).  

You’ll want to work with an experienced end-to-end solar solutions provider, like PowerFlex, that will work through all the necessary steps to understand how solar can help you comply, including:

• Conducting a site assessment to determine how large of a solar energy system — rooftop, carport, or ground-mounted — your facility can support
• Estimating how much energy the system will produce and how that can lower your building’s overall consumption, especially during times of high demand
• Tailoring system design to your building to effectively implement your energy efficiency strategy
• Using Energize Denver’s Building Performance Forecasting Calculator to combine your solar energy project with any other eco-friendly mitigations you have planned to forecast EUI reductions, avoided fines, and target achievement

To illustrate the important role a provider like PowerFlex plays, we used the performance calculator linked above to estimate fines and savings if a 1-megawatt (MW) solar energy system were installed on five different types of commercial buildings under the program:

• Refrigerated Warehouse
  • 2030 EUI Target: 70
  • 2030 Fines for Missed Target: $600,000
  • 2030 Fines With 1-MW Solar Installed: $0

• Non-Refrigerated Warehouse
  • 2030 EUI Target: 27
  • 2030 Fines for Missed Target: $1 million
  • 2030 Fines With 1-MW Solar Installed: $0

• Data Center
  • 2030 EUI Target: 67
  • 2030 Fines for Missed Target: $1.2 million
  • 2030 Fines With 1-MW Solar Installed: $0

• Distribution Center
  • 2030 EUI Target: 25
  • 2030 Fines for Missed Target: $200,000
  • 2030 Fines With 1-MW Solar Installed: $0

• Hospital
  • 2030 EUI Target: 165
  • 2030 Fines for Missed Target: $8.5 million
  • 2030 Fines With 1-MW Solar Installed: $3.9 million

As you can see, investing in solar energy is a viable way to either significantly reduce or eliminate potential fines. And since a properly maintained solar energy system will easily last 25 to 30 years, you can rest assured that you have a path to compliance for years to come.

Contact PowerFlex to Install Your Onsite Solar Energy System  

When you choose PowerFlex as your solar partner, you get complete project support including system design, permitting, incentive guidance, installation, and asset management supported by the PowerFlex X™ adaptive energy management platform. With PowerFlex X, you’ll get access to annual production data for accurate and consolidated Energize Denver Benchmark Reporting, asset optimization for maximum EUI savings, and virtual support from our customer success team.

And besides bringing your building into compliance with Energize Denver, PowerFlex can help you unlock a wealth of other solar benefits including energy savings thanks to reduced reliance on expensive utilities as well as returns on investment in the form of federal tax credits and local incentives. Contact PowerFlex today to learn how you can leverage clean solar energy to meet your Energize Denver EUI targets and a whole lot more.