San Francisco Department of the Environment

Strategic Energy Assessment (SEA)

A long term financial planning tool for building owners managing carbon emissions, energy efficiency, and electrification in San Francisco

Overview: The San Francisco Department of the Environment (SFE) has developed a tool to support San Francisco building owners as they manage the energy use and carbon emissions associated with their buildings over the coming decades.

Through the Strategic Energy Assessment (SEA), SFE seeks to improve the capital planning process and output to be more carbon aware for building owners. The goal is to enable identification and implementation of economically and environmentally beneficial building upgrades, including redesign of building systems. The key to this approach: acknowledging that eventual replacement of equipment is inevitable, and energy opportunities should be framed in a manner consistent with foundational real estate management practices. 

The tool is currently being accepted as an option for compliance with the audit requirement of the Existing Commercial Buildings Ordinance; this alternative path would be available to buildings over 50,000 square feet, in lieu of an ASHRAE Level 2 audit. The SEA can also help building owners develop electrification plans consistent with their broader asset management strategy.


Background: Most asset management strategies involve forecasting capital and operational expenses, consistent with the owner’s investment strategy. These forecasts typically include reactive plans to replace equipment at end of life or to avoid equipment replacement altogether. Proactive building system redesigns that offer better returns and less tenant disruption may be missed, locking in higher operating costs and carbon emissions.

Engineers have the expertise to identify forthcoming efficiency investment opportunities, but traditional analysis centered on “payback” implicitly assumes a “do nothing” baseline that has zero cost. In reality, equipment will need repair and replacement, and there is a cost to inaction. 

In a Strategic Energy Assessment, an engineer will propose smart, proactive improvement strategies that the owner can implement at advantageous times over the next 5 to 10 years to significantly reduce building carbon emissions and improve returns. Opportunistic building owners will incorporate these recommendations into their asset management plans to reduce operational expenses and increase net operating income.

SFE is currently seeking buildings to pilot the SEA concept, with support from SFE staff and consultants.
If you are interested in more info on the SEA, or to access the SEA calculator, contact [email protected].


SEA Key Questions:

  • How should this building perform?
  • What is the path to get there? When?

Traditional energy audits compel auditors to consider how a building’s performance could be improved within the owners’ “payback threshold”, and arbitrary length of time that can be as short as a single year. In a Strategic Energy Assessment, auditors will consider the building’s fundamentals, like location, space use, market position, as well as inherent physical constraints, and use that information to propose how, over time, the building owner should stage investments in better systems to reach the building’s ideal future performance and GHG emissions. These proactive scenarios undergo discounted cash flow analyses to inform building owners’ which options are more effective—financially and from an energy perspective.


SEA Template: SFE has developed a calculator supporting the SEA pathway. This spreadsheet template enables the analysis, including the forecast of equipment replacement at end of life, and comparison of the net present value of multiple proactive scenarios to the replace-when-broken baseline. The data requirements and engineering analysis are derived from ASHRAE 211 (2018) normative forms, but the approach is more consistent with fundamental real estate industry practices, processes, and standards.


The baseline scenario combines concepts from the Property Condition Assessment (PCA) with the ASHRAE Level 2 audit forms and process. A PCA is forward-looking and includes an estimated timeline and cost for equipment repair and replacement. This can serve as a baseline scenario from which the building auditor proposes more effective paths forward. From this “fix it when it breaks” baseline, the auditor is prompted to develop proactive efficiency-minded strategic improvement scenarios.

From the auditor’s perspective, the data collection is similar to an ASHRAE Level 2 audit, but with additional operational information about the building (such as expected rent and operating expenses) is collected where available, with assumptions provided by SFE as default values for San Francisco. The equipment inventory in the ASHRAE 211-2018 normative forms is key, cataloging at least 80 percent of the building’s HVAC and water heating energy use. This equipment inventory allows for the estimation of remaining useful life and generation of a replacement timeline for major equipment. While we expect to offer an online version of the process utilizing BuildingSync XML in the future (ideally via DOE Audit Template), during the current pilot  SEA uses a spreadsheet to help the auditor generate a baseline financial operating statement over the owner’s defined holding period and including expected equipment repair and replacement. The auditor then creates proactive scenarios of energy conservation measures (ECMs) that represent a better path forward than the reactive baseline. Proposed costs and benefits for each scenario are analyzed and presented in terms of annual net operating income and net present value over the owner’s holding period for the building compared to the baseline reactive scenario.


Credits: SFE developed the SEA concept through the implementation of Ember Strategies’ Empowerment Method, with support from the Energy Foundation. The SEA calculator was developed and refined by Arup and Ember Strategies.