VIEWPOINT: New York City’s 2025 Energy Conservation Code Raises the Stakes on Early Design Coordination

The following Viewpoint is written by Nathan Kegel, senior vice president at IES 

When the enforcement of New York City’s 2025 Energy Conservation Code comes into effect from March 30, many project teams will see it as another tightening of efficiency thresholds. In reality, though, its most significant impact may be procedural rather than technical.

The updated code increases the value of performance modeling, accurate HVAC load calculations and verification and commissioning, which shifts how contractors, engineers and developers coordinate projects long before equipment is ordered or permits are filed.

The new code increases the value of early-stage performance modeling and an integrated HVAC sizing and energy code compliance model. Stricter envelope performance, air-leakage testing, lighting controls and electrification requirements mean more elements of the building must be evaluated as integrated systems. And if those interactions are not assessed early, project teams may discover late in design that systems are oversized, underperforming or misaligned with compliance pathways.

For contractors and design teams this creates three immediate pressure points:

First, electrification strategies require earlier coordination: As more projects pursue high-efficiency electric heating and cooling systems, electrical capacity, distribution planning and equipment sizing must be aligned sooner. Modeling and understanding both peak loads and part-load performance is no longer just a design optimization step, it can actually determine whether a project remains compliant without costly infrastructure changes. The focus on only peak load sizing can miss important opportunities to both comply with code and add lifecycle cost value to each project.

Second, envelope performance is no longer theoretical: Expanded air-sealing verification and performance expectations mean that envelope decisions cannot be value-engineered in isolation. Contractors responsible for constructability must understand how envelope assemblies interact with HVAC sizing and ventilation strategies. Small changes in glazing ratios or infiltration assumptions can have downstream compliance implications.  

In addition, these requirements help ensure that equipment sizing can be based on better infiltration and thermal bridging assumptions than may have been used previously in the sizing of HVAC systems. Since testing and verification is required, this reduces the risk that the actual construction dramatically differs from what was intended on the design documents.

Third, not all energy code compliance paths offer equal value to the owner: Choosing a path to comply early on is paramount to budget success for both the overall construction budget and for the design teams’ design budgets. There are many nuances and factors that go into determining which performance path is best for a given project – and having these conversations and agreement is paramount to meeting the energy code requirements. While the prescriptive path may have the least amount of labor for the design team, it also (generally) carries the least amount of value in terms of early-stage decision-making when considering options for envelope, HVAC system choice, internal gains, and more.

This does not mean projects become more complex for complexity’s sake, but it does mean that the margin for late adjustments is shrinking as late changes or “value engineering” may cause the design to not meet the code requirements; studying multiple options early-on is the best way to avoid costly re-work late in the process. And in a market already challenged by labor constraints and supply-chain variability, rework driven by code non-alignment is an avoidable cost.

The practical takeaway is straightforward: compliance modeling and coordination should begin at schematic design, not during construction documentation. When energy analysis is integrated early, teams can evaluate multiple pathways, test assumptions and document compliance before procurement decisions lock in – only when using one of the two performance paths.

This should not be seen as a New York-only issue, either; New York’s updated code reflects broader national trends. Energy performance standards everywhere are becoming more integrated with decarbonization goals, grid resilience concerns and overall building lifecycle costs. The construction industry will increasingly be judged not only on delivering projects on time and on budget, but also on delivering buildings that perform as modeled.

For contractors and design teams operating in New York, the message is clear: Treat the 2025 Energy Code not as a final hurdle, but as a design and coordination framework. Those who adapt their workflows accordingly will reduce risk, protect schedules and position themselves competitively as performance expectations continue to rise.

Nathan Kegel is a senior vice president at Integrated Environmental Solutions, where he works with engineering and construction teams to integrate building performance modeling into project delivery workflows. He advises contractors, developers and design firms on reducing compliance risk and improving energy performance outcomes across complex projects.