BEPS is an acronym for Building Energy Performance Standards. It refers to laws regulating energy use for buildings by local, district, and state governments.
Building Performance Standards (BPS) laws have been passed by various governments across the country. They all vary significantly.
The parts of the DMV with active BEPS laws are the State of Maryland, the District of Columbia, and Montgomery County, MD.
The legislation is changing often as data is gathered on buildings in the region and as our local governments learn what works best from other building performance laws around the country.
These laws aim to achieve a government’s long-term greenhouse gas emission goals by splitting their timeline into smaller compliance cycles.
Compliance cycles were designed to encourage building owners to take action early with small steps toward energy savings, instead of requiring immediate, expensive, and time-consuming overhauls. Each compliance cycle is 5 years long.
To start, multifamily buildings are given an energy use or emissions target to meet based on their size.
If your building meets the target you can relax and forget about BEPS until the next cycle starts in 5 years. If not, you have 5 years to implement changes to reduce energy usage to the target level or face fines.
Then, the next compliance cycle starts with a new, lower building energy target.
DC’s goal is to reduce energy use in buildings by 50% by 2032.
It uses two compliance cycles to achieve this goal. The first compliance cycle began in 2021 and will end in 2026.
DC’s energy target is based on a building’s Energy Star score. Energy Star scores measure a building’s energy use intensity relative to similar buildings in the US, presented as a percentile from 0 to 100.
A building with a score of 100 is in the top 1% of energy efficiency in the country. A score of 1 is very inefficient, while a score of 50 is average.
The target Energy Star score for multifamily buildings in DC is 66. This means that multifamily buildings must be more efficient than 66% of comparable buildings in the US.
The maximum energy use intensity reduction DC’s BEPS law is asking for in each compliance cycle is 20%.
So, if achieving an Energy Star score of 66 would require a greater than 20% energy use reduction in your building, you can instead target the 20% reduction and avoid any fines, even if your Energy Star score is less than the target of 66.
The maximum fine is set at $10 per foot.
The only buildings that would get the maximum fines are buildings that need to reduce their energy use intensity by 20% or more AND make zero progress towards reducing their energy consumption during the compliance cycle.
If your building needs to reduce by 20% but only achieves a 10% reduction, you’d pay $5 per square foot.
If your building only needs to reduce by 10% at the beginning of the cycle to achieve an Energy Star score of 66, the highest fine you could get would be $5 per square foot.
If you got halfway to your target, you’d be fined $2.50 per square foot.
If your building in DC is not meeting its BEPS target, we recommend you implement energy saving measures before the start of 2026. January 1st, 2026 will be the first day of energy use that counts towards compliance.
Montgomery County is using site energy use intensity as the measurement for its BEPS program. This is the amount of energy used per square foot, represented as kBtu/ft2.
The end goal of the county’s BEPS plan is to get multifamily buildings to 37 kBtu/ft2 and is using two compliance cycles to get there.
At the start of the program, multifamily buildings will have their baseline usage set. After 5 years, they will need to meet an interim standard which is halfway to the goal of 37 kBtu/ft2. from where they started. After another 5 years, they will need to be at 37 kBtu/ft2.
A 300,000-square-foot condominium with a site energy use intensity of 57 kBtu/ft2 in 2024 will need to reduce its energy usage to 47 kBtu/ft2 by the end of 2030 and down to 37 kBtu/ft2 by the end of 2035.
For multifamily properties between 25,000 ft2 and 250,000 ft2, the program begins and ends one year later than for properties greater than 250,000 ft2 so enforcement will occur at the end of 2031 and 2036.
The exact fine structure for the Montgomery County BEPS program isn’t clear yet. Current laws limit the fines to $500 for the first offense and $750 for each subsequent offense but whether these fines will be applied annually, daily, or anywhere in between has not been determined.
Maryland’s state-wide BEPS program goal is to incentivize all buildings greater than 35,000 ft2 to achieve net-zero direct greenhouse gas emissions by 2040.
Net direct greenhouse gas emissions are the amount of CO2 being released on-site, typically from the combustion of fuels for space heating, water heating, or cooking, represented as kgCO2/ft2.
Baseline values will be finalized in 2025, then buildings will enter compliance cycles which end in 2030, 2035, and 2040.
Currently, the legislation indicates all multifamily buildings will be held to the same targets. The targets for condominiums will be 0.82 kgCO2/ft2 in 2030, 0.41 kgCO2/ft2 in 2035, and 0 kgCO2/ft2 in 2040.
When fines begin in 2030, Maryland properties not achieving the BEPS standards will be fined annually for each ton of CO2 released by the building beyond the standards. Fine amounts are tied to the EPA’s estimated social cost of carbon dioxide emissions which will be $230/ton of CO2 in 2030.
Maryland also planned on having Site Energy Use Intensity limits, which track both onsite combustibles and electricity usage, but has removed these limits. These are expected to be reinstated in 2027 when they announce new limits that are chosen using the 2025 baselining data to inform the new targets.
You have to follow both.
We recommend taking the time to understand where each law sets the targets for your property.
In most cases, the state law will set more aggressive targets for a given property. The state law also sets a clear structure for its fines. Be sure to keep track of it.
There are currently no BEPS laws or corresponding fines in place for the state or local governments in Virginia.
However, utilities are expensive no matter where you are and many of the improvements related to BEPS can be economically favorable. When done right, energy efficiency measures can lower your community’s operating costs.
If you find that your building’s energy baseline is above the targets for your jurisdiction, there are several options available to achieve compliance.
There is no one-size-fits-all solution to energy performance so it may be worth contacting an energy auditor or advisor in our market to help navigate this process and understand your options.
“Silver Spring” – Image Credit IntangibleArts via Flickr.
Is your building facing BEPS fines? Do you want to learn more about BEPS? Email contact@paritygo.com and we will get back to you soon.