While concerns about the potential elimination or privatization of ENERGY STAR Portfolio Manager (ESPM) are understandable, the possible transition away from ESPM could, in fact, present opportunities for innovation, competition, and improved data management.
1) Data Portability and Market Innovation
The ESPM program does not necessarily disappear if EPA decides to no longer sponsor it. The most likely scenarios are that EPA sells the intellectual property it has developed to a private company, or it spins ESPM off to a non-profit. In either of these cases, it is likely that the use of ESPM could continue uninterrupted if the users agree to have their data migrated over to the new sponsoring entity. While it is also possible that EPA just abruptly shuts down ESPM, it is not clear why they would do that when less disruptive alternatives are available.
Even if ESPM does disappear, this would not necessarily result in the loss of millions of dollars’ worth of data investment. EPA policy already designates the property data administrator as the owner of their data, and there are established procedures for data retrieval and migration. Any provider of a replacement service for ESPM would have a powerful incentive to make the data migration process to the new service as painless as possible. The private sector, with its resources and technical expertise, is well-equipped to create more flexible, user-friendly, and feature-rich alternatives, possibly improving upon ESPM’s current limitations.
2) Privatization: Risk or Opportunity?
The fear that privatization would lead to excessive costs and data misuse underestimates the benefits of competition and regulation.
Today, ESPM is a government monopoly supported by your tax dollars. A private entity would have to be funded either by fees, if it is a for-profit business, or by donations, if it is a non-profit. In either case, it would be the users of the program who would bear its costs rather than the general public. Also, to the extent that competing products are introduced, they could drive down costs as multiple vendors vie for business by offering better services, enhanced security, and lower prices.
Concerns about data security are not unique to privatized systems. Government platforms are not immune to data breaches. In fact, private companies often have stronger incentives to invest in cutting-edge cybersecurity and to comply with data privacy regulations to maintain customer trust and market share.
Protection against data misuse would be provided by the terms under which the data was supplied to the ESPM service. These obligations are not negated by a change in ownership of the service. A company who violates those terms will be exposed to legal liability for breach of contract. It would also likely fail as its customers flee to competing platforms that do not misuse customer data.
3) Compliance and Administrative Burden
There are many jurisdictions that require energy consumption benchmarking data through ESPM. It may have been chosen since it is free to the user because of its taxpayer subsidy rather than due to its superior capabilities. It is likely true that, if ESPM does not continue under new ownership, there may be a period of uncertainty before the market coalesces around one or two replacement services.
The dominance of ESPM has led to a lack of innovation and customization. If ESPM were phased out, the market would respond with new solutions, potentially tailored to the unique needs of different regions or building types. The Department of Energy’s SEED Platform and other emerging tools are already positioned to fill the gaps. The transition period presents an opportunity to streamline processes, eliminate inefficiencies, and modernize compliance systems. The fear of skyrocketing costs ignores the long-term benefits of healthy competition and technological progress.
4) Green Loan Reporting: Adaptation is Possible
In the event that ESPM is shut down, the providers of green financing would specify the mechanism for complying with the terms of their loans. Any ESPM-successor selected by a majority of them would have the inside track to becoming the new industry standard. Lenders and regulators have a vested interest in maintaining clear, consistent reporting standards and would likely collaborate with industry to approve alternative benchmarking tools. The current reliance on a single platform is a risk in itself; diversification of tools and standards could make the system more resilient and adaptable.
A government-run, one-size-fits-all solution like ESPM can stifle innovation and limit user choice. The private sector has repeatedly demonstrated its ability to deliver superior solutions when given the opportunity. The transition away from ESPM could catalyze a new era of energy management tools-more customizable, interoperable, and responsive to user needs.
Rather than viewing the potential loss or transformation of ESPM as a catastrophe, the industry should see it as a catalyst for progress. Far from being a critical concern, this moment could unleash a wave of innovation and improve data ownership and security through competition. The industry’s energy data needs will not disappear, but the way they are met may soon become smarter, more efficient, and more user-driven.
The companion article outlining the causes for concern is available here.
