Energy Efficiency Gets a Compliance Push: Understanding the Proposed Mandatory Rating for Commercial Buildings

India’s Ministry of Power has proposed a mandatory rating framework for new buildings and building complexes with a built-up area of 20,000 square metres or more, intended for office, commercial or residential use. The framework would apply to buildings whose construction commences after the final notification comes into force and would require a rating from the Bureau of Energy Efficiency (“BEE”) or a BEE-registered rating agency. The proposal comes against the backdrop of rapid urbanisation, expanding commercial activity and rising demand for thermal comfort, with buildings accounting for a significant share of India’s electricity consumption and greenhouse gas emissions.

Regulatory Framework

Against this backdrop, BEE has developed two key building energy codes under the Energy Conservation Act, 2001:

1. Energy Conservation and Sustainable Building Code (“ECSBC”);

2. Eco Niwas Samhita (“ENS”)

The proposed framework seeks to establish a nationally recognized Rating system for large buildings that provides a simple, transparent and credible measure of building energy performance. The proposed notification also seeks to recognize established building rating systems under a common regulatory framework, thereby leveraging existing institutional capacity while ensuring consistency, transparency and credibility in the assessment and communication of building energy performance.

Why a uniform framework is being proposed

Several building rating systems already promote sustainable and energy-efficient practices, but they use different methodologies, assessment criteria and certification processes. The draft seeks to address the absence of a nationally harmonised framework for assessing, benchmarking and publicly disclosing building energy performance.

The absence of a uniform framework has led to the following challenges:

1. There is a lack of transparency among building owners, occupiers, investors and financial institutions making it difficult to compare the energy performance of buildings;
2. Absence of a mandate around disclosure requirements eventually results in a reduction in market incentives for developers to invest in higher levels of energy efficiency beyond minimum requirements;
3. Not having a centralised repository of building energy performance data, is limiting the ability of policymakers to monitor compliance, evaluate policy outcomes, identify sectoral trends and formulate evidence-based interventions.

Proposed Mandatory Rating Framework of buildings and building complex

The Ministry of Power’s draft notification proposes a mandatory rating framework for large buildings and building complexes with a proposed built-up area of 20,000 square metres or more, intended for office, commercial or residential use. It would apply only where construction commences after the final notification is published in the Official Gazette and would supersede the Energy Conservation and Building Code Rules, 2018.

Key compliance obligations proposed in the draft

The principal compliance requirements under the draft are as follows:

1. Building rating requirement: Any building or building complex with a proposed built-up area of 20,000 square metres or more, intended for office, commercial or residential use, must obtain a rating from BEE or a BEE-registered rating agency. The draft also prescribes minimum ratings for recognised systems: 3-Star under BEE and GRIHA, Gold under IGBC and LEED, and GEM-3 under ASSOCHAM’s GEM.
2. Registration for BEE Star Rating: An owner or occupier seeking a BEE Star Rating must register on BEE’s web portal and pay the prescribed fee.
3. BEE Star Rating documentation: The owner or occupier must submit the prescribed compliance documents, together with a Certificate of Compliance issued by a Certified Energy Auditor (Building) or an empanelled Third-Party Assessor.
4. BEE Star Rating Certification Procedure: Based on the submitted documents, BEE will issue a provisional Star Rating Certificate. For the final certificate, the owner or occupier must submit the prescribed compliance documents, after which BEE is to issue the building rating within 30 days of receipt. For commercial and office buildings, the final BEE Star Rating is valid for 10 years and must then be renewed; the explanatory note states that renewal for residential buildings will be voluntary.
5. Display of building rating: The owner or occupier will be required to display the building rating issued by the rating agency or BEE at clearly visible locations. The rating should also be mentioned in advertisements for promotion and information to the public, including prospective buyers, tenants, and other stakeholders.
6. Verification and non-compliance: BEE may conduct sample verification of displayed ratings. If non-compliance is found, the owner or occupier must remove the rating display, and BEE may place the findings in the public domain. The draft also notes that States may levy penalties under the Energy Conservation Act, 2001.

Conclusion

The proposed framework would establish a nationally harmonised rating system for large new buildings. For developers, owners and occupiers of qualifying buildings, a rating would become a defined compliance requirement rather than a purely voluntary certification choice, backed by disclosure, verification and potential penalties. The notification remains in draft, and the final requirements may change before they take effect.

Sources

• Ministry of Power draft notification on Mandatory Rating of buildings and building complex https://www.powermin.gov.in/static/uploads/2026/07/f981ac1fc7a15c1136606ec2cd1979ca.pdf
• Eco Niwas Samhita https://www.beeindia.gov.in/WriteReadData/RTF1984/1772175926.pdf
• Energy Conservation and Sustainable Building Code https://www.beeindia.gov.in/WriteReadData/L45218/7534511430467336.pdf

Author: Sarnindita Chatterjee

Co-Author: Baishali Chakraborty

This content is intended for informational purposes only and does not constitute a legal opinion. Readers are encouraged to seek legal counsel prior to acting upon any of the information provided herein. Despite our efforts to maintain accuracy, we do not make representations, warranties or undertakings regarding the quality, completeness or reliability of the content.  This content, including the design, text, graphics, their selection and arrangement, is Copyright 2026, Lexplosion Solutions Private Limited or its licensors. ALL RIGHTS RESERVED, and all moral rights are asserted and reserved.

For any clarifications, please reach out to us at 91-33-40618083 or inquiries@lexplosion.in. Refer to our privacy policy by clicking here.