What The End of 2025 Means for Building Owners

As 2025 approaches, building owners across California are facing a pivotal moment. Energy compliance laws in major cities — from Los Angeles’ EBEWE program to San Francisco’s Existing Buildings Ordinance (EBO) and San Jose’s Building Performance Ordinance (BPO) — are tightening, deadlines are stacking up, and enforcement is becoming more aggressive.

The next few months aren’t just about avoiding penalties. They’re about positioning your properties for long-term efficiency, sustainability, and value.

If you own or manage a commercial building in California, the clock is ticking — but there’s still time to act strategically.

The Regulatory Landscape Tightens

California’s major cities have led the country in energy benchmarking and performance standards for years. But as the state pushes toward its 2045 carbon neutrality goals, local programs are raising the bar.

Here’s what’s happening city by city:

Los Angeles: EBEWE Compliance Deadlines Intensify

The Existing Buildings Energy and Water Efficiency (EBEWE) program requires annual energy benchmarking and a five-year cycle of audits and retro-commissioning (RCx) for all commercial and multifamily buildings over 20,000 square feet.

By the end of 2025, another major wave of five-year audit and RCx cycles will be due. Building owners who fail to complete their required audits face potential penalties — and even worse, costly inefficiencies that continue to drain operating budgets.

The City of Los Angeles has already increased enforcement in 2024, issuing compliance warnings and monetary fines to owners who missed Phase II requirements. In 2025, expect even stricter follow-ups.

San Francisco: Energy Audit and Benchmarking Enforcement

In San Francisco, the Existing Buildings Ordinance (EBO) requires nonresidential buildings over 10,000 square feet to complete annual benchmarking and periodic energy audits.

The City’s focus in 2025 is verification. Many building owners have submitted audits without proper ASHRAE-level detail or failed to document actual follow-up improvements. Expect more audits to be rejected or flagged for incompleteness, leading to fines or rework.

San Jose: Building Performance Ordinance (BPO)

San Jose’s BPO is newer, but it’s quickly becoming one of the most comprehensive frameworks in the state. By late 2025, the city plans to expand requirements for larger buildings to include performance targets — not just reporting.

That means owners can’t just file data anymore; they’ll need to demonstrate measurable improvements in efficiency or emissions reduction. The BPO will likely evolve into a true “performance standard” similar to Washington D.C.’s BEPS or New York City’s LL97.

Why This Matters for Owners

In short: 2025 is the turning point where compliance transitions from optional to essential.

Energy performance is no longer a quiet sustainability effort — it’s now a core part of financial management. Buildings that don’t meet compliance risk:

• Fines and enforcement actions that can escalate quickly.

• Reduced property value as inefficient buildings underperform in the market.

• Higher insurance and financing costs, as lenders and insurers increasingly evaluate ESG risk.

• Lost tenants, as companies prioritize energy-efficient buildings for their own sustainability commitments.

Meanwhile, proactive owners are discovering the opposite — that early compliance leads to better returns, stronger tenant retention, and operational resilience.

The 2025 Opportunity: Turning Compliance Into Strategy

If you act before the end of 2025, compliance becomes an advantage, not a burden. Here’s how to make the most of the year ahead.

1. Start with Benchmarking

Before you can manage energy, you have to measure it. Annual energy benchmarking is already required in Los Angeles, San Francisco, San Jose, and Berkeley through programs like EBEWE, EBO, BPO, and BESO.

Benchmarking data identifies your building’s biggest inefficiencies — and more importantly, provides a baseline for improvement. Buildings that consistently track performance outperform those that only scramble during audit years.

2. Schedule Your 5-Year Audit and RCx Early

Waiting until Q4 2025 to schedule your audit is a common — and quite frankly — mistake. Qualified auditors and commissioning providers book up months in advance, especially as deadlines approach.

A professional energy audit and RCx (retro-commissioning) not only ensures compliance but also pinpoints operational savings opportunities. Many owners discover that the upgrades recommended during RCx pay for themselves within a year through reduced utility costs.

3. Address “Low-Hanging Fruit” Retrofits

Not every efficiency measure requires a capital plan. Smart thermostats, lighting controls, HVAC scheduling, and plug load management often deliver measurable savings with minimal upfront cost.

By tackling operational improvements first, you build momentum and free up budget for larger upgrades later — such as chiller replacements or solar PV integration.

4. Leverage Incentives and Financing Programs

Utilities across California, including LADWP and PG&E, offer rebates and performance incentives for energy-efficient upgrades. Many of these programs are time-sensitive and align with compliance milestones.

An experienced energy compliance service provider can help identify which incentives apply to your building and streamline the application process.

5. Document and Communicate Your Results

One of the biggest missed opportunities in compliance is failing to communicate progress. Tracking improvements not only helps maintain future compliance but also demonstrates ESG performance to investors, lenders, and tenants.

By showing tangible reductions in energy use and emissions, you position your property as a responsible, forward-thinking investment.

The Consequences of Waiting

Every year that a building delays compliance or efficiency improvements, operating costs rise. Here’s what waiting looks like in practice:

• Your energy bills continue to increase with no insight into why.

• Fines accumulate for missed deadlines or incomplete reports.

• When you finally act, you’re competing with hundreds of other owners rushing to hire the same limited pool of qualified auditors.

• You miss rebate deadlines, leaving money on the table.

In short: the longer you wait, the more you pay — both in lost savings and in regulatory risk.

The End of 2025 Isn’t the End — It’s the Beginning

California’s energy compliance landscape isn’t slowing down. In fact, programs like EBEWE, BPO, and BESO are expected to evolve into performance-based standards, meaning future compliance will hinge on achieving measurable improvements — not just reporting.

By acting now, you get ahead of that curve.

Buildings that meet today’s standards are better positioned for tomorrow’s. They attract higher-value tenants, command stronger resale prices, and align seamlessly with corporate ESG goals.

If you’re a building owner in Los Angeles, San Francisco, San Jose, or Berkeley, 2025 is your chance to shift from reactive compliance to proactive performance.

Start now — because next year, waiting won’t be an option.