Purpose
This article explains the difference between site energy and source energy, how each metric is used across common real estate ESG frameworks, and how energy data is treated within Scaler. The goal is to help users understand which metric to use, when, and why.
What is site energy?
Site energy is the heat and electricity directly consumed by a building. It is the energy that appears on utility bills and is measured by conventional or smart meters at the asset.
Site energy reflects what is actually used at the building and may come from:
- Primary energy, such as fuel burned on site for heating or electricity generation
- Secondary energy, such as electricity purchased from the grid or heat supplied via a district energy system
Because it represents on-site consumption, site energy is the most direct measure of a building’s operational energy use.
What is source energy?
Source energy represents the total amount of raw fuel required to operate a building, including:
- Energy used at the power plant
- Energy lost during generation, transmission, and distribution
- Energy ultimately delivered to the building
Source energy therefore extends beyond the building boundary and captures the full upstream energy chain. It is typically used as a normalised metric to compare buildings with different energy mixes, rather than to measure on-site performance.
Why the distinction matters
Site and source energy answer different questions:
- Site energy shows how much energy a building actually consumes
- Source energy shows how energy-intensive that consumption is when upstream losses are included
These metrics should not be mixed within the same analysis. Most real estate ESG reporting and regulatory frameworks are explicitly based on site energy, while source energy is used primarily for benchmarking purposes.
Site vs. source energy across reporting frameworks
Frameworks based on site energy
The majority of ESG and regulatory frameworks used by real estate investors rely on site energy inputs:
- GRESB: reports site energy consumption and emissions
- CRREM: uses site energy to calculate Scope 1 and 2 emissions and decarbonisation pathways
- Building Performance Standards (e.g. NYC LL97): calculate compliance based on emissions derived from site energy
Because these frameworks are emissions- and performance-focused, site energy is the appropriate and required input.
ENERGY STAR and source energy
ENERGY STAR is the main exception. While users enter site energy data, ENERGY STAR converts this into source energy using national average source-to-site ratios. This converted value is used to generate ENERGY STAR scores for cross-building benchmarking.
ENERGY STAR uses source energy to ensure that buildings are neither rewarded nor penalised for the relative efficiency of their local electricity grid.
Site energy in asset management
Standard real estate asset management practice focuses on site energy because it:
- Reflects controllable building-level performance
- Directly drives Scope 1 and 2 emissions
- Supports retrofit planning and efficiency measures
- Aligns with investor reporting and regulatory requirements
For these reasons, site energy is the most actionable metric for managing transition risk and operational performance.
How Scaler treats energy data
Scaler uses site energy as the single source of truth for energy reporting and analysis.
Within Scaler:
- All energy data inputs represent site energy
- Emissions calculations (Scope 1 and 2) are derived from site energy
- Energy and emissions intensities are calculated using site energy
- Data is mapped consistently across reporting frameworks such as GRESB, CRREM, and regulatory disclosures
This approach ensures consistency, auditability, and alignment across all supported reports.
ENERGY STAR reporting in Scaler
ENERGY STAR is a national program in the United States focused on protecting the environment through energy efficiency. Its primary purpose is to enable fair, standardised benchmarking of building energy performance across a diverse building stock.
To support this goal, ENERGY STAR uses source energy as its core performance metric.
Why ENERGY STAR uses source energy
ENERGY STAR defines source energy as the total amount of raw fuel required to operate a building, including energy used in generation as well as losses during transmission and distribution. By accounting for these upstream impacts, source energy provides a more holistic view of the energy burden associated with operating a building.
ENERGY STAR describes source energy as the most equitable unit of evaluation for comparing buildings to one another. This is because buildings rely on different energy sources and electricity grids with varying efficiencies, which are outside the control of building owners and operators.
To avoid crediting or penalising buildings based on the relative efficiency of their local utility provider, the Environmental Protection Agency applies national average source-to-site ratios when converting site energy into source energy. This ensures that ENERGY STAR scores reflect building performance rather than regional differences in power generation.
How this relates to Scaler
In Scaler, users always enter site energy data. When ENERGY STAR reporting is required, this site energy data is passed to ENERGY STAR Portfolio Manager, where source energy is calculated using ENERGY STAR’s standard methodology.
Scaler does not convert site energy to source energy internally, and source energy is not used for emissions calculations, ESG reporting, or regulatory compliance within the platform.
As a result:
- ENERGY STAR source energy values and scores may differ from Scaler’s energy or emissions metrics
- This difference is expected and reflects the different purposes of the two systems
- ENERGY STAR scores should be used for benchmarking, while Scaler outputs should be used for reporting, emissions accounting, and compliance
What Scaler users should do
- Enter site energy data in Scaler
- Use Scaler outputs for reporting, emissions accounting, and regulatory compliance
- Use ENERGY STAR scores for benchmarking and peer comparison
- Do not manually convert site energy to source energy for ESG or emissions reporting
Keeping site and source energy conceptually separate ensures accurate, consistent, and framework-aligned reporting.