How to Upgrade Your Building Equipment to Optimize Efficiency and Cost Savings

For property owners, every investment decision counts. Replacing aging building equipment is not just about maintenance — it’s an opportunity to improve efficiency, reduce costs, and future-proof operations. While California’s Title 24 Building Code sets the baseline for energy efficiency, choosing to exceed these standards can lead to significant long-term savings.

As part of our Owner Strategy Series, GM Properties consulted with Marika Erdely, CEO of Green Econome, to provide building owners with guidance on navigating energy regulations and optimizing property performance.

Why Energy-Efficient Upgrades Matter

Proactively investing in high-efficiency building equipment not only reduces energy costs but also ensures compliance with evolving regulations. With upcoming mandates like the State of California SB 48 (Building Energy Savings Act), which will require buildings over 50,000 square feet to reduce carbon emissions, acting now can help you avoid future penalties. While some building owners may want to wait until stricter reduction requirements are enforced at the city or state level, making these changes now can be a strategic move.

Even though high-efficiency equipment has a higher upfront cost, the investment pays for itself within a few years through reduced utility expenses, providing financial and operational benefits well into the future. Additionally, buildings equipped with advanced technologies are more attractive to tenants, particularly those prioritizing corporate sustainability goals or long-term operational planning initiatives. 

Best Technology Upgrades for Building Equipment

Choosing the right equipment upgrades is key. Here’s what property owners should consider when looking to modernize their buildings:

• Energy Star Certified Equipment: Always opt for Energy Star-rated appliances and building systems. These certified products meet higher efficiency standards, which can lead to lower operating costs for both owners and tenants.
• Heat Pumps vs. Gas Boilers: Instead of replacing old gas boilers, consider installing modern heat pumps. These systems offer better efficiency, reduce reliance on natural gas, and come with extended warranties for added protection.
• Lighting Upgrades: If lighting equipment needs replacement, switching to LED fixtures with integrated occupancy sensors can reduce energy waste and provide immediate cost savings.
• Smart Thermostats and Controls: Installing programmable thermostats allows building owners to better regulate energy use by setting heating and cooling schedules, preventing unnecessary energy consumption outside business hours.

Leveraging Incentives for Cost Savings

Many utilities offer rebates and incentives to encourage energy-efficient upgrades. Property owners should research available programs to help offset initial investment costs:

• Utility Provider Rebates: Look at each utility company for their specific business savings solutions and incentives, including gas, water, and electric providers such as Southern California Edison and LADWP. These programs offer financial incentives for upgrading HVAC systems, installing efficient lighting, and replacing outdated equipment.
• PACE Financing: For large-scale energy efficiency projects, Property Assessed Clean Energy (PACE) financing may be an option. While recent changes have altered eligibility, it remains a valuable tool for certain high-impact upgrades.
• Limited-Time Programs: Some incentives, like those offered by LADWP, are only available for a short period. Acting now ensures access to these financial benefits before they expire.