The DoE Will Run Energy Star. What Does That Mean for Multifamily?
One official called Energy Star a crown jewel that needs to be preserved and protected.
The US Department of Energy has taken over primary oversight and management of the Energy Star program, popular with the multifamily and commercial real estate industry because of its key benchmarking tool.
The program was moved from the Environmental Protection Agency. Under a joint memorandum of agreement, the EPA and DOE agreed to an orderly transition that will be detailed in a plan to be approved within 90 days.
The agreement notes that DOE will consult with other federal agencies, including EPA and the Small Business Administration as needed. Transition of Energy Star activities, including partnership agreements, trademarks and IT systems and databases, will be outlined in the plan. EPA and DOE intend to initially subsidize transition activities with their own appropriated funds, but the memo notes that as the transition progresses, EPA may enter into separate agreements to transfer funds to directly to DOE.
The MOA took effect March 3 and is to remain in place for 10 years. However, it can be extended or modified if both parties agree. It can also be terminated by either party with written notice provided a year in advance of the desired termination date.
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The move comes weeks after Congress demonstrated bipartisan support for the program by approving $33 million in spending for fiscal year 2026 in a bipartisan spending bill that awaits the president’s signature. It also comes about a year after the Trump administration considered ending the program or privatizing it before receiving pushback from politicians as well as energy, consumer, construction and real estate groups.
Since the program was signed into law in 1992, it has become one of the most successful public-private partnerships in the U.S. and has helped American businesses and families save more than $500 billion in energy costs, according to the Institute for Market Transformation.
‘Track record of success’
“It’s got a long track record of success and it’s beloved. About 90 percent of American households recognize the Energy Star logo and value it, and it’s absolutely foundational to the real estate sector,” Cliff Majersik, a senior advisor at the Institute for Market Transformation, told Multi-Housing News. “It’s a crown jewel that needs to be preserved and protected.”
Majersik noted that building owners, investors, lenders and service providers rely on Energy Star’s buildings program and its Portfolio Manager platform to monitor and track efficiency, lower energy use, save money and serve as the basis for contracts and agreements.
Because of the program’s importance to the real estate industry and impact on several sectors of the American economy, Majersik said there needs to be a smooth transition and called for transparency, oversight and public engagement during the process.
“Congress and the many stakeholder groups who rely on this program deserve to know more about the transition and how DOE would manage, staff and fund the program moving forward,” he stated.
Keys to a smooth transition
Ben Evans, federal legislative director with the U.S. Green Building Council, also called for more transparency during the transition. While he notes that the DOE has had a significant role in reducing energy waste through programs like the Better Buildings Initiative and has been a strong supporting partner to EPA, he said in a prepared statement that the move raises questions about how the program will be funded in the future and if it will maintain its current scope of operations.
Evans noted that disruptions or reductions in operations could have significant economic consequences because the program is embedded in so many sectors of the economy, including new home construction, commercial real estate and manufacturing facilities. He stated thousands of CRE companies, homebuilders and industrial facilities rely on the label to improve their properties and increase their value.
Mary Lue Peck, president and chief operating officer of BOMA International, notes in a prepared statement that the MOA did not mention a critical program resource—staff. She stated BOMA encourages the agencies to provide employees with critical programmatic experience the option to transfer with the program so there will be no interruption of service. Peck said BOMA members use the Portfolio Manager program to benchmark their energy use, using the data to improve their operations, reduce operational costs and comply with local regulations. She detailed that more than 330,000 buildings use Portfolio Manager, representing nearly 25 percent of all commercial floor space in the U.S.
Peck said the 10-year MOA provides certainty for the program and BOMA members who rely on it, allowing them to invest time, effort and data into the program with confidence as Energy Star continues to evolve.
