Half of today’s buildings in advanced economies will still be standing by 2050. Given our nation’s preponderance of old, energy-inefficient buildings, retrofits will be essential to reduce the 28 percent of domestic energy consumption and 36 percent of U.S. emissions that stem from buildings.
Within this context, the Inflation Reduction Act’s (IRA’s) $1 billion push to cut consumer costs through energy efficiency and climate resilience is a boon to retrofitters and the nation’s decarbonization goals. Recently, the Department of Energy (DOE) announced the funding’s first installment: $530 million in technical assistance grants to help states, territories, and localities upgrade to the latest residential and commercial model energy codes, which reduce building energy consumption by up to 40 percent compared to codes just 15-years old.
To illustrate the significance of this funding, we’ll break down the incentivized model codes, how already-implemented net-zero building codes offer guidance, and which retrofit upgrades and assessments building owners should pursue for the biggest impact. Plus, we’ll touch on how a rise in energy-efficiency upgrades to existing buildings will support job growth within the retrofit industry.
Codifying Excellence: the DOE-Incentivized Building Codes
By offering $530 million in competitive technical assistance grants, the DOE is encouraging states, territories, and localities to update their base and stretch building codes to the latest models, which offer better energy efficiency and climate resilience.
For residential buildings, the latest model energy code is the 2021 International Energy Conservation Code, or IECC. According to the National Association of Home Builders (NAHB), the 2021 IECC “sets minimum efficiency standards in new construction for a structure’s walls, floors, ceilings, lighting, windows, doors, duct leakage and air leakage.” Thanks to its heightened efficiency, the newest edition reduces energy usage by 9.4 percent and GHG emissions by 8.7 percent compared to IECC’s 2018 edition alone. Plus, flexibility provisions facilitate easier design and construction, which benefit architects, contractors, etc. (Especially impactful, the 2021 IECC includes a “Zero Energy Appendix” that governments can implement as a stretch code to inspire zero-energy-capable construction, examples of which we’ll discuss shortly.)
Commercially, the latest code is ASHRAE 90.1-2022. According to the Pacific Northwest National laboratory (PNNL), it promotes “buildings that are energy efficient, more affordable to own and operate, and based on current industry standards for health, comfort, and resilience.” In New York, the code could yield annual average energy cost savings of $0.064 per square foot compared to the currently-enforced 90.1-2016 standard, reducing statewide CO2 emissions by 6.7 MMT over 30 years. Those reductions equate to removing 1,450,000 cars from the road for a year.
California and Massachusetts: Leading the Charge for Net-Zero Building Codes
As mentioned, the 2021 IECC includes net-zero building codes that states, territories, and localities can adopt as an optional “stretch” code or as a baseline mandate. The early decision of California and Massachusetts to implement net-zero building codes offer leadership which can inform other governments’ programs.
In California, all buildings permitted from January 2023 must comply with the 2022 Energy Code, which “encourages efficient electric heat pumps, establishes electric-ready requirements for new homes, expands solar photovoltaic and battery storage standards, [and] strengthens ventilation standards.”
In Massachusetts, nearly 300 other Massachusetts Green Communities opted into the Municipal Opt-In Specialized Stretch Code, where all new or majorly renovated buildings must conform to either a zero-energy, all-electric, or mixed-fuel pathway. Boston, where 70 percent of GHGs stem from buildings, is particularly trailblazing: it not only opted into the Stretch Code but built on it. Starting in 2024, all multifamily housing over 12,000 feet must achieve Passive House certification, which produces buildings that use 63 percent less energy per square foot than Boston’s median new multifamily building as of 2022. Overall, this “strong standard” will “ensure buildings are more resilient to power outages while enabling efficiency, electrification, and affordability.”
While net-zero codes are applicable for new construction, they don’t work so well for existing buildings. So, cities have used building performance standards and building efficiency disclosures to push existing buildings to improve. However, this doesn’t mean the codes for new construction can’t directly impact retrofits. The technology development that leads to more all-electric and deeply decarbonized buildings can naturally push the available technologies for deep energy reduction through retrofits.
Energy Efficiency Guide for Retrofitters
To maximize their impact, retrofitters looking to implement high-efficiency building codes should start by identifying properties with five key traits:
- High energy costs
- Decarbonization goals
- Mechanical and construction inefficiencies
- Rebates and financial incentives
- Alternative energy demands.
Once they’ve selected a candidate, retrofitters should audit the structure, building a model to identify the building’s inefficiencies. From there, they should institute a deep energy retrofit: installing LED lighting, low-flow water fixtures, and upgraded installation, then sealing and weatherizing the building envelope (a measure which can reduce storm damage as well as lower the cost of temperature control). Especially if the retrofitter is reaching for zero-energy stretch codes, the next step would be to electrify with Energy Star appliances—for example, induction stoves and a heat-pump-based space and water heating system, which further reduce the building’s energy consumption while lowering indoor noise and air pollution. Then, to offset remaining energy usage with renewable generation, retrofitters can install rooftop PVs or (if the building’s location is unsuitable for rooftop panels, or if curb appeal is an issue) subscribe to community solar projects. Finally, to maximize the building’s long-term operational efficiency, retrofitters should supplement new technologies with an energy management system to get real-time data on problems within the building, issues with equipment, and further opportunities for efficiency and savings.
Reducing Emissions, Boosting Jobs
DOE emphasizes that a key goal in its energy-efficiency push is to create high-paying, place-based jobs. States and localities can apply grant money to training people to perform the retrofits needed to bring buildings up to the latest codes, enabling local workers to gain skills they can then continue to use to deliver affordable, healthy buildings. Additionally, the Biden Administration’s Justice40 initiative means that at least 40 percent of the $530 million investment will benefit disadvantaged communities.
Best in Combination
Upgrading commercial and residential building codes is an important step for energy efficiency, climate resilience and building health. However, when it comes to decarbonization, building codes are one powerful tool in what must be a coordinated, multi-pronged program.
Ultimately, decarbonization of the building, power, and transport sectors must work together for maximum results. A big chunk of building emissions comes from their electricity usage, meaning power decarbonization lowers building CO2 emissions. Energy-efficiency retrofits reduce a building’s energy consumption, which both lowers its emissions and reduces its demand on the electric grid. That saved energy can then be repurposed to electrify transportation, thereby reducing air pollution and, in the long run, drastically lowering transportation emissions.
Overall, DOE’s support of upgrades to model building codes facilitates an essential piece to the overall emissions reductions puzzle—while boosting building affordability, building health, and the retrofit economy along the way.