NYC’s 2025 Energy Code: What Owners Need to Rethink Now
Melisa Yepes-Schaefer of Goldman Copeland outlines the shifts landlords and developers face as enforcement kicks in.
New York City’s energy code is entering a major new chapter. With enforcement of the 2025 New York City Energy Conservation Code set to begin March 30, 2026, the shift it not simply technical, but strategical. Electrification requirements, envelope performance standards and expanded testing protocols are reshaping how projects are designed, budgeted and sequenced across the city.
For owners and development teams, the implications extend well beyond equipment selection. Decisions around HVAC sizing, facade design, compliance pathways and documentation now carry direct cost, schedule and operational consequences. In an environment where Local Law 97 penalties and capital discipline already frame project economics, missteps in compliance can quickly become expensive.
To unpack what’s changing and how to manage risk during the transition, Commercial Property Executive spoke with Melisa Yepes-Schaefer, a senior associate & senior mechanical engineer at Goldman Copeland, a local MEP and energy engineering firm. With more than a decade of HVAC engineering experience across new construction and retrofit high-rise projects in New York City, Yepes-Schaefer outlines how to avoid common compliance pitfalls and where owners can find the strongest return on enegery-related investments.
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What are the most consequential shifts in the 2025 Code vs. the 2020 edition, and how will they affect capital budgets, project timelines and compliance strategy?
Yepes-Schaefer: The 2025 Code represents a major step toward New York’s target to reduce emissions by 80 percent by 2050. For owners and operators, the most consequential shift is the aggressive move toward electrification. We are seeing a significant cap on electric resistance heating and a mandate for cold-climate heat pumps.
On the CapEx side, expect higher upfront costs for high-performance HVAC and controls. However, this investment pays off in operating performance. By reducing your energy use intensity, these systems help you stay ahead of Local Law 97 carbon caps and avoid future penalties.
On schedules, we can see some design phases lengthen. Requirements like thermal bridge modeling and air-leakage testing for envelope-driven projects are now more integrated requirements that require early coordination between architects and MEP engineers.
For owners of existing commercial buildings, the material compliance threshold has tightened. This is particularly critical for office-to-residential conversions, where you essentially enter the new construction compliance path.
Which project scopes are most likely to feel the most significant cost and schedule impacts first?
Yepes-Schaefer: Every project will feel the weight of the 2025 Code, but those involving building envelope modifications will face the steepest climbs in both schedule and budget. When you touch the exterior of an existing building, the code triggers mandatory upgrades that can be expensive and time-consuming to execute.
New tenant fit-outs will also see an initial cost bump due to required upgrades in lighting controls and HVAC distribution, though these are generally smart investments that should translate into operational savings.
How does the shift toward electrification change HVAC design, envelope strategy and winter performance under the new code?
Yepes-Schaefer: We are moving away from the era of safety-net electric heaters. The 2025 Code caps electric resistance heat at 25 percent of the total load and generally prohibits it as a primary heating source except under low outdoor temperature conditions. This shift changes how we design the envelope and control strategy.
In an electrified building, heating is not just about the equipment; it is about the envelope acting as thermal storage. We need better infiltration mitigation and airtightness to support the heat pumps, which do not heat a space quickly. Unlike gas boilers that can provide a sudden blast of heat, heat pumps are designed to maintain a steady temperature efficiently by operating continuously.
This reality means our building management systems must be smarter and more predictive. Older HVAC systems are largely reactive and respond once a space has already drifted from its setpoint. Moving forward, a smart BMS must understand the historic thermal capacity of the building. For example, instead of a standard Monday morning warmup that starts a few hours before occupancy, a proactive BMS will analyze the outdoor conditions and the building’s specific “warmup curve” to begin pre-charging the building much earlier if needed.
By using the building’s mass to store heat during off-peak hours, we can ensure the space is at temperature by the time tenants arrive, even on the coldest days when the equipment capacity is at its lowest. We are advising owners to design their BMS to look ahead at the future needs of the space. By pre-charging for high-heating periods and maintaining strict control over ventilation, you reduce the peak mechanical load. This allows for smaller HVAC systems and more manageable electrical service, ultimately protecting both the project’s bottom line and the long-term comfort of the occupants.
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When should owners pursue the prescriptive path vs. performance/modeling under the new code?
Yepes-Schaefer: The prescriptive path is the most straightforward and least likely to fail a review, but it is also the most rigid, forcing every component to meet a specific minimum. Performance modeling enables design optimization by leveraging high-efficiency mechanical systems to offset the thermal loads of a façade with more windows or glazing, for example.
Within the building envelope and building systems, where’s does compliance deliver the strongest ROI?
Yepes-Schaefer: The highest compliance ROI currently lies in air sealing and thermal bridge mitigation. These are relatively low-cost labor items with an outsized impact on the energy model. While performance compliance can provide flexibility, the prescriptive portion often pressures teams to limit glazing to meet prescriptive requirements. Rethinking the façade to prioritize performance over pure transparency can allow for smaller, less expensive mechanical systems.
For projects aiming to stay under the 2020 Code, what does a “complete” filing require in practice?
Yepes-Schaefer: March 30, 2026, is the anticipated enforcement date for the 2025 Code. To remain under the 2020 Code, your application must be deemed complete by the Department of Buildings before this date. In practice, a complete filing requires a full energy analysis that is synchronized with your architectural and MEP drawings.
What types of post-approval changes most often trigger a material compliance issue, and how can owners prevent that through documentation and oversight?
Yepes-Schaefer: A material compliance change occurs when a post-approval amendment is substantial enough to affect the project’s energy compliance basis. Common triggers include changing your compliance path or making major swaps in mechanical equipment. Owners can reduce this risk by requiring submittals that confirm any equipment substitution matches the efficiency assumptions used in the approved energy analysis.
Which new requirements under the 2025 Code are most likely to affect timelines and budgets?
Yepes-Schaefer: The 2025 Code adds a mandatory energy credits system. You now must select a specific number of additional efficiency measures from a menu, which requires the architect, MEP engineer and owner to make value-based decisions early. Additionally, expanded requirements for air barrier testing and commissioning are now rigorous field tests that can prevent you from obtaining a temporary certificate of occupancy if the building does not pass testing and commissioning.
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