NYC Energy Laws & Incentives: Your 2025 Compliance Guide

Navigating New York City's complex energy laws and incentives can be challenging, especially as the 2025 compliance deadlines approach.

These regulations, such as Local Law 97, Local Law 84 benchmarking, and Local Law 87, are reshaping how building owners and managers approach energy efficiency, sustainability, and compliance in the city.

This guide will help you understand these key energy laws and discover tax incentives like the 179D tax deduction.

It will also offer expert recommendations on compliance strategies, energy solutions for manufacturing, and the benefits of conducting a building energy audit.

Whether you're a building owner, real estate developer, or facility manager, this blog serves as a roadmap to ensure your business achieves compliance while taking advantage of incentives designed to lower operational costs and environmental impacts.

Why NYC Energy Laws Matter

NYC’s energy laws were introduced to tackle climate change and promote sustainable practices.

Real estate plays a major role in the city’s carbon footprint, contributing nearly 70% of greenhouse gas emissions. These laws set the city on a path to achieve a 40% reduction in emissions by 2030 and an 80% reduction by 2050.

Failing to comply with these requirements doesn’t just harm the environment; penalties for non-compliance can be costly and reflect poorly on your organization’s reputation.

Last year, NYC imposed fines of up to $2,000 per building for Local Law 84 non-compliance—$500 per quarter for missed benchmarking deadlines.

If you want to stay ahead and leverage the financial incentives available, this guide is for you.

Demystifying NYC’s Key Energy Laws for 2025

Below is a concise overview of NYC’s energy regulations and the steps you can take to meet compliance.

Local Law 97

Local Law 97, a centerpiece of NYC's Climate Mobilization Act, mandates strict carbon caps for buildings larger than 25,000 sq. ft. If your building exceeds its carbon limit, you'll face fines starting at $268 per ton of emissions over the cap.

What You Can Do:

• Upgrade HVAC systems with energy-efficient alternatives using programs like NYSERDA’s Clean Energy Funds.
• Schedule a building energy audit to identify inefficiencies and areas for improvement.
• Partner with energy consultants to create a decarbonization strategy (read more here).

Local Law 84 Benchmarking

Under Local Law 84 benchmarking, buildings over 25,000 sq. ft. must track and report their annual energy and water consumption via the Environmental Protection Agency’s Portfolio Manager.

Why It’s Important:

• Benchmarking helps track progress toward sustainability goals.
• Buildings failing to file their reports will face fines of $500 per missed quarter.

Improve your building’s benchmarking process with NY Engineers’ advanced tools. Contact us for more details.

Local Law 87

Local Law 87 requires energy audits and retro-commissioning every 10 years for applicable buildings. These assessments identify operational inefficiencies and suggest improvements that can significantly lower energy costs.

Quick Tip:

Schedule your audits in advance to avoid last-minute compliance issues. Undertaking a building energy audit now could also qualify your business for valuable tax deductions.

Financial Incentives to Maximize Savings

Beyond compliance, NYC provides several incentives to ease the financial burden of transitioning to energy-efficient systems.

179D Tax Deduction

The 179D tax deduction allows building owners and designers of energy-efficient properties to claim deductions of up to $5 per square foot, depending on the improvements made.

Eligible upgrades include:

• Energy-efficient lighting systems
• High-performance HVAC systems
• Building envelope improvements

NYSERDA Incentives

Through NYSERDA’s programs, you can receive rebates and grants for adopting renewable energy solutions such as solar panels and geothermal heating.

Implementing Energy Solutions for Manufacturing

While office spaces and multi-family properties dominate the discussion, energy solution manufacturing facilities in NYC are also under pressure to comply with Local Law requirements.

Strategies for Manufacturing Facilities:

• Conduct a building energy audit to identify areas for improvement.
• Invest in energy-efficient production equipment and renewable energy sources like on-site solar power.
• Leverage tax credits applicable to industrial activities.

Whether you oversee a large-scale production facility or a smaller operation, the right strategy will save energy and reduce emissions.

How AI and Data Analysis Are Streamlining Compliance

Artificial Intelligence is reshaping how businesses approach energy compliance. Tools powered by AI can analyze your building systems, generate recommendations, and predict energy consumption trends.

For instance, smart data analysis integrated into building management systems can help identify inefficiencies in real time, from HVAC performance to lighting usage.

If you're thinking about how to implement these solutions, visit our guide on Smart HVAC to Net-Zero Buildings.

Start Your Compliance Journey Today

The clock is ticking toward the 2025 deadlines for NYC's energy laws. Taking action now will save you from last-minute fines and ensure you stay ahead of the curve.

NY Engineers specializes in bespoke engineering solutions that simplify compliance and maximize value. Whether you need help with Local Law 97 audits, Local Law 84 benchmarking, or securing the 179D tax deduction, we’re here to guide you every step of the way.

Schedule a consultation today and get started on achieving your compliance goals.