How the Smart Readiness Indicator Is Revolutionizing the Real Estate Industry

The Smart Readiness Indicator is currently a major topic of discussion in the EU. But what exactly does the term mean and how does it differ from familiar smart home buzzwords? The legal framework behind the SRI is particularly relevant for building operators and asset owners alike. With the help of the SRI, property owners can already take important steps today to future-proof their buildings and portfolios.

What Is the Smart Readiness Indicator?

The Smart Readiness Indicator (SRI) is a building intelligence indicator developed by the European Commission, introduced in 2018 as part of the revision of the European Energy Performance of Buildings Directive (EPBD). The updated 2024 version of the EPBD has once again emphasized the importance of the SRI (Article 15 "Smart Readiness of Buildings"). Simply put, the SRI measures a building's ability to utilize modern information and communication technologies as well as electronic systems to improve energy efficiency while meeting both user needs and grid requirements. The three core functionalities of the SRI can be summarized as follows:

• Optimizing energy efficiency and building operations, for example through automated control of heating, cooling or lighting based on actual demand
• Adapting to user needs, such as intelligent indoor climate control to improve comfort and well-being
• Integration with the energy grid, meaning the ability to respond flexibly to grid signals, reduce peak loads or make optimal use of locally generated solar energy

The Smart Readiness Indicator (SRI) goes far beyond remote-controlled LED lights or isolated smart home solutions. Instead of focusing on lifestyle-driven tech gadgets, the SRI emphasizes intelligent, integrated building technology. A project team commissioned by the European Commission has defined a standardized assessment methodology for this purpose and implemented it in an official SRI evaluation tool.

The Current Legal Situation: EPBD Amendment 2024

Currently, 16 EU member states – including Germany, France, and Austria – are participating in a voluntary test phase. During this phase, national administrations are supported by several local technical partners and the official SRI support team, accompanied by numerous research projects.

An example from Germany is the collaborative project BIMpact, funded by the Federal Ministry for Economic Affairs and Climate Action (BMWK). The project is led by Ed. Züblin AG and involves several partners, including aedifion. BIMpact aims to assess the impact of buildings throughout their entire life cycle – based on digital building models, smart sensor technology, and cloud-based data processing. The abbreviation “BIM” stands for “Building Information Modeling,” a digital planning approach that consolidates all relevant building data into a central, structured 3D model. Combined with digital platforms like the one developed by aedifion and IoT systems, the BIM model can in the future automatically provide information relevant to the SRI assessment (for example, regarding system interoperability, controllability, and energy efficiency).

The introduction of the SRI is currently still voluntary in EU Member States. However, according to the latest amendment of the EPBD from 2024, the SRI could soon become mandatory for non-residential buildings with high energy consumption, shifting from a recommended status to binding requirements: By June 30, 2026, the European Commission is expected to report on the outcomes of the pilot phase and ongoing testing. Based on these results, the Commission will be authorized to introduce mandatory SRI assessments starting in 2027. In concrete terms, this will likely apply to buildings with extensive technical systems and a combined rated output of more than 290 kW for heating, ventilation, and air conditioning (HVAC) systems. This threshold is identical to the one that already triggers mandatory installation of digital energy monitoring systems in building automation today. Building owners, however, already have the option to voluntarily assess the smart readiness of their properties.

How the Smart Readiness Indicator is measured

With the SRI, the EU aims to establish smart, energy-efficient buildings as the new standard in order to meet climate targets. For the real estate sector, this represents a fundamental shift away from analogue, isolated building operations toward integrated connectivity, open interfaces, and measurable building intelligence. To assess this, the so-called “Smart-Ready Services” are evaluated. These services are divided into nine technical domains:

• Heating
• Cooling
• Domestic hot water
• Ventilation
• Lighting
• Dynamic building envelope
• Electricity
• Electric vehicle charging
• Monitoring and control

The concrete performance of each service within the nine categories is evaluated with regard to the desired impacts of smart buildings:

• Energy efficiency
• Maintenance and fault prediction
• Comfort, convenience
• Health, well-being and accessibility
• Information to occupants
• Energy flexibility and storage

The outcome is summarized into an overall class and an SRI score, which demonstrate a building's position on the Smart Readiness scale.

Assessment packages and informational materials can be requested via an online platform provided by the European Commission.

Why the Smart Readiness Indicator Is Crucial for Future-Proof Buildings

While smart home technologies often provide isolated solutions, the SRI considers the entire building management system and its interactions. The focus is on sustainable and long-term benefits: saving energy, simplifying maintenance, increasing flexibility, and improving comfort — all in an objectively measurable way. Moreover, regulatory pressure on building owners is steadily increasing. Thus, the SRI becomes a key indicator of a property's future viability.

The following six points clearly illustrate why owners and investors should start engaging with the SRI today:

• Increased energy efficiency, reduced costs: A high SRI score reflects intelligent energy management and efficient building systems. This leads to lower energy costs and reduced CO₂ emissions.
• Enhanced comfort and better indoor climate: Automated, demand-driven control of temperature, air quality, and lighting creates healthier and more pleasant indoor environments. Occupants benefit from improved well-being.
• Optimized operation, reduced maintenance effort: AI-based monitoring enables early detection of maintenance needs (predictive maintenance), minimizing downtime, user complaints, and long-term operating costs.
• Future-proof connectivity and energy flexibility: Smart buildings can store surplus energy, manage loads flexibly, and benefit from dynamic electricity tariffs. This adaptability actively supports the energy transition, lowers electricity costs, and increases energy independence in the era of renewable energy.
• Compliance with legal requirements and ESG criteria: Sustainability and smart technologies are increasingly mandated by law or demanded by investors. A high SRI score clearly demonstrates a property's future viability and reduces the risk of becoming a "stranded asset."
• Increased property value and market attractiveness: Intelligent, sustainable buildings offer significant market advantages. They remain attractive longer, show lower vacancy rates, and experience slower value depreciation – clear benefits for owners and asset managers.

Building Intelligence in Practice: Preparing for the SRI

How can property owners and asset managers proactively prepare their building portfolios to meet the requirements of the Smart Readiness Indicator (SRI)?

In short: through targeted digitalization and automation of building technology. Modern, AI-based cloud platforms already enable plug-and-play digitalization of buildings today. A key factor on the path to smarter buildings is data availability, as buildings are increasingly seen and managed as holistic digital ecosystems.

The necessary technologies are already available and can provide a comprehensive data picture of building operations as well as connectivity across all energy-relevant systems. With aedifion’s Optimization Bundle, for example, inefficiencies are easily identified, potential is unlocked, and performance improvements are implemented. An add-on for intelligent electricity cost optimization also connects HVAC systems, photovoltaic systems, heat pumps, or battery storage and flexibly adjusts energy use from the grid or on-site generation based on real-time electricity prices.

Bottom line: Now is the right time to lay the foundation for future-proof buildings. Numerous real-world examples already show that smart buildings are more energy-efficient, sustainable, stable in value, and more comfortable for users. The SRI makes these advantages visible, measurable, and comparable. This creates an entirely new level of transparency. Those who make their properties SRI-ready today not only meet upcoming regulatory requirements but also gain a clear competitive edge.