Chicago’s 2025 Commercial Building Electrification Push: Why Your Business Needs Professional Electrical Upgrades Now

As Chicago continues its aggressive push toward carbon neutrality, the Chicago City Council passed the 2022 Chicago Energy Transformation Code, which requires that new buildings are constructed in alignment with stronger energy efficiency and electrification standards, with most changes applying to new building permit applications starting Nov. 1. While this ordinance primarily targets new construction, the ripple effects are creating unprecedented demand for commercial electrical upgrades across the city.

Understanding Chicago’s Energy Transformation Mandate

Chicago recently announced its building electrification plan to reduce emissions in the nation’s third-largest city, where nearly 70% of the greenhouse gas emissions come from buildings. The report recommends moving to electric heat of buildings over the next 20 years. This comprehensive strategy goes beyond new construction requirements and sets the stage for existing commercial buildings to face increasing pressure to modernize their electrical systems.

The ordinance includes several key provisions that directly impact commercial properties. Changes include requirements related to energy-efficient lighting; designing certain commercial building roofs to support future solar panel installations; constructing residential buildings with infrastructure that enables a future switch to electric-powered appliances; and incentives for smart HVAC and water appliances that integrate with the power grid to reduce demand during peak use.

What This Means for Existing Commercial Buildings

While the current mandates focus on new construction, the plan would change the City’s building codes to phase out fossil gas consumption in new buildings and homes and places undergoing major renovations, then it recommends setting incremental goals to ease the transition to full adoption. This signals that existing commercial buildings will soon face similar requirements during major renovations or system upgrades.

Commercial property owners are already seeing the writing on the wall. The ordinance applies to all existing commercial, institutional, and residential buildings larger than 50,000 square feet in the City of Chicago, requiring them to benchmark energy use annually using ENERGY STAR Portfolio Manager. This benchmarking requirement is creating transparency around energy usage that will likely drive future electrification mandates.

The Business Case for Proactive Electrical Upgrades

Smart business owners aren’t waiting for mandates to force their hand. Buildings, including homes and businesses but not factories, are responsible for 29% of greenhouse gas emissions in the United States, according to the U.S. Environmental Protection Agency, and experts say that building electrification can play an important role in reducing greenhouse gas emissions. Beyond environmental benefits, electrical upgrades offer tangible business advantages.

The federal Inflation Reduction Act provides substantial incentives for commercial electrification projects, making now an ideal time to invest in electrical infrastructure improvements. Additionally, Chicago has committed to power all of its municipal buildings with renewable energy by 2025, and all city buildings by 2035, creating a municipal example that many commercial tenants and customers increasingly expect from private businesses.

Essential Electrical Upgrades for Commercial Properties

Commercial buildings looking to stay ahead of Chicago’s electrification curve should prioritize several key electrical system upgrades:

• Panel Capacity Expansion: Most older commercial buildings lack the electrical capacity needed for full electrification of heating, cooling, and cooking systems.
• EV Charging Infrastructure: At least 20 percent (and at least one) of the total parking spaces must be either EVSE-ready or EVSE-installed for new construction, indicating future requirements for existing buildings.
• Smart Grid Integration: Advanced electrical systems that can communicate with the power grid to optimize energy usage during peak demand periods.
• Solar-Ready Infrastructure: Electrical systems designed to accommodate future solar panel installations.

Navigating Compliance and Permitting

For every permit application that requires architectural plans, an Illinois-licensed architect or engineer who is familiar with the project and the applicable Chicago energy code requirements must complete an Energy Code Compliance Statement. The completed Compliance Statement must be submitted along with the supporting documents as part of the permit application process.

This complexity underscores the importance of working with experienced electrical contractors who understand Chicago’s evolving regulatory landscape. Professional Commercial Electrical Services Chicago providers can navigate these requirements while ensuring your electrical upgrades meet both current codes and anticipated future mandates.

The Cost of Waiting

While the current mandates primarily affect new construction, the trajectory is clear. For new construction projects that want to use natural gas during the phase-in process, the plan outlines a “fossil fuel mitigation fee” that owners can pay during construction, which will go to a fund to help lower-income homeowners retrofit their homes for electrification. This fee structure suggests that future regulations may include financial penalties for non-compliance.

Moreover, as electrification becomes standard, commercial properties without modern electrical infrastructure may face reduced property values, difficulty attracting tenants, and higher operating costs. The businesses that invest in electrical upgrades now will be positioned as market leaders when stricter mandates inevitably arrive.

Taking Action

Chicago’s energy transformation represents both a challenge and an opportunity for commercial property owners. While the full scope of future mandates remains to be seen, the direction is unmistakable: the city is moving toward comprehensive building electrification.

Commercial property owners who act proactively can take advantage of current incentives, avoid future penalties, and position their properties as attractive, forward-thinking spaces for tenants and customers. The key is partnering with electrical contractors who understand both the technical requirements and the regulatory landscape shaping Chicago’s commercial real estate future.

As Chicago continues to lead the nation in urban sustainability initiatives, businesses that embrace electrical modernization today will find themselves ahead of the curve tomorrow. The question isn’t whether commercial building electrification will become mandatory in Chicago—it’s whether your business will be ready when it does.