The Tier 2 Incentive

Washington’s Tier 2 Early Adopter Incentive gives eligible building owners a chance to offset part of the cost of preparing for the Clean Buildings Performance Standard. Tier 2 documentation is due to the Washington State Department of Commerce by July 1, 2027. Owners who complete the required work early, meet the program rules, and receive energy from a participating utility may qualify for an incentive payment.

Tier 2 generally covers nonresidential, hotel, motel, and dormitory buildings with more than 20,000 and no more than 50,000 gross square feet, excluding parking, as well as multifamily residential buildings over 20,000 square feet. Eligibility is not determined by size alone. The building must meet Commerce’s program criteria, complete the required compliance steps, and be served by a utility participating in the incentive program.

The base incentive is $0.30 per square foot of eligible floor area. An eligible 30,000-square-foot building, for example, could receive a base payment of about $9,000. Parking and certain unconditioned or semi-conditioned spaces are excluded from the calculation, so owners should verify the floor area that Commerce and the utility will use before estimating a payment.

Some qualifying multifamily buildings may receive an enhanced incentive of up to $0.75 per square foot. To qualify, the owner must sign the required anti-displacement agreement and meet the other program conditions. The enhanced payment cannot exceed the estimated cost of compliance when that cost is lower than the amount produced by the square-foot calculation. That safeguard is important when comparing an expected incentive with actual project costs.

The incentive is earned through completed work, not registration alone. Owners must benchmark energy use, identify the building’s EUI target, and develop and implement the required energy management and operations and maintenance programs. Commerce reviews the compliance and incentive applications. Once an application is approved, the participating utility issues the payment. Clear data, complete documents, and coordination among the owner, facility staff, Commerce, and the utility all matter.

Washington allocated $150 million for Tier 2 incentives, and funds are distributed on a first-come, first-served basis. Commerce reported in July 2026 that $5 million had been awarded and more than $144 million remained available. That balance represents a meaningful opportunity, but it is not a guarantee for any individual building. Waiting also leaves less time to resolve utility-data gaps, confirm building details, and complete the management programs before the deadline.

SEM can help owners organize building information, collect and review energy-use data, support walkthroughs, develop the required management documentation, and identify questions that need input from facility staff or qualified professionals. Beginning now can make the compliance process more manageable, uncover operational savings, and improve an eligible owner’s chance of applying while incentive funds remain.

To assess your building and begin Tier 2 preparation, visit SEM’s Get Started page.