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Two recent initiatives announced by the White House will help spur additional energy efficiency and decarbonization upgrades in new and existing buildings.
President Biden invoked the Defense Production Act to expand domestic manufacturing of a number of critical clean energy technologies, including heat pumps and building insulation. The White House also recently debuted its National Initiative to Advance Building Codes, which will bring together federal agencies to help lower energy costs for families, while making homes and buildings more resilient against the effects of severe weather. Taken together, these policies are a great start toward strengthening the market for important clean energy technologies such as heat pumps, while helping local governments improve both new and existing buildings–but Congress needs to finish the job by passing bills that provide the investments necessary to help transition buildings to clean and affordable renewable energy.
Clean energy manufacturing
The Defense Production Act (DPA) gives the president the authority to direct private companies to prioritize orders from the federal government. Most recently, the DPA was used to make protective equipment during the coronavirus pandemic. Now, President Biden is using the act to authorize the Department of Energy (DOE) to rapidly scale up domestic production of a number of clean energy technologies, including heat pumps, building insulation, solar panel parts, equipment used to make and use cleaner fuels, and critical power grid infrastructure. The White House and DOE will convene stakeholders to determine how to maximize the impact of the tools made available by use of the DPA.
Existing buildings are one of the largest sources of carbon pollution in the country, and eliminating the emissions from these millions of buildings will require improving efficiency while dramatically reducing their fossil fuel consumption. Insulation, heat pumps, and solar panels are some of the most critical technologies needed to achieve our 2050 climate goals. Increasing domestic manufacturing of these products will make them more easily accessible to American families by reducing retail costs, smoothing supply chain issues, and building a robust market for these technologies. In addition, the job creation benefits are substantial. Recent reports from Rewiring America estimate that 500,000 manufacturing jobs could be brought back to the U.S. in the solar and clean heating industries, and an additional 450,000 installation and maintenance jobs could be supported through electrification of the clean heating sector.
Additionally, there are cost savings and health benefits from better buildings. Heat pumps have the potential to save $400 to $1000 annually when compared to electric resistance or oil heating systems. Better insulated homes–especially when insulated with healthy materials—help improve occupant comfort and safety on the hottest or coldest days, while reducing energy waste. Efficient, electrified homes powered by renewable energy help to protect consumers’ wallets against spiking fossil fuel prices.
While use of the DPA to quickly increase domestic manufacturing of efficiency and clean energy products will certainly be beneficial, it is only a start. It is still incredibly urgent for Congress to act to pass tax incentives and additional measures to advance manufacturing and deployment in the energy sector.
National initiative to advance building codes
New buildings are the “low-hanging fruit” of the climate crisis: constructing them to be efficient and zero-emission from the start is the cheapest, easiest way to address energy use while improving resilience and reducing costs. The White House’s National Initiative to Advance Building Codes will examine programs across the federal government to increase the use of updated building and energy codes as follows:
Lead by example
This initiative commits the federal government to “leading by example” by improving the energy use of federal buildings, which will help drive the market toward greater efficiency. The federal government has more than 130,000 buildings across the country— many of which are in need of modernization—so this initiative could have a huge impact on decarbonizing these buildings.
- All new construction and retrofit projects above 25,000 gross sq. ft. will be designed to be net-zero emissions, which includes all-electric appliances and equipment, and significant energy efficiency above and beyond the minimum required energy code. This takes effect starting now, in fiscal year 2022.
- There will be the first-ever Federal Building Performance Standard, which is currently under development. This will establish the metrics and tracking methods to meet the federal carbon emissions reduction goals: reducing emissions by 50% by 2032 and net-zero emissions from federal buildings by 2045.
- The White House Council on Environmental Quality will explore how to integrate resilience standards to protect against natural hazards like floods and fires.
Department of Energy building codes funding
The Bipartisan Infrastructure Law specified $225 million to support energy codes in fiscal years 2022 through 2026, a marked increase for a program that historically has an annual budget of around $10 million. This funding gives the Department of Energy (DOE) a transformative opportunity to support states in the adoption of, enforcement of, and compliance with updated energy codes.
The agency recently solicited comments on a request for information about how to structure the funding opportunity and which projects to prioritize. In joint comments, National Resource Defense Council and the Building Electrification Institute (BEI) expressed our strong support for energy codes that transition to efficient, all-electric new construction as soon as possible. We requested DOE funds be used to prioritize building decarbonization through a combination of efficiency and electrification, while addressing issues of equity. We support projects which incorporate workforce training, innovative approaches to code implementation (including stretch codes, and standards for existing buildings), and dedicated enforcement and compliance strategies.
DOE is currently reviewing comments, then will release a funding announcement in the upcoming months. The Infrastructure Law specifies that projects must include a state agency, but our comments underscore the importance of projects to include partners that have a real impact on – or are impacted by – new codes and policies. In many states, code adoption and/or enforcement is handled at the local level, so DOE must ensure that those jurisdictions can access funding. Many local jurisdictions are leading the way on energy codes and policies even when their state policies are lagging. We expect DOE to underscore the importance of partnerships in project funding, and state and local governments should stay tuned to take advantage of this opportunity to transform their energy codes.
Federal funding and financing
Across the federal government, there are a wide number of programs that fund or finance building construction. These range from funding housing projects through the Department of Housing and Urban Development (HUD) to specifying the codes that must be used when rebuilding from a disaster with FEMA funding. The administration’s building codes initiative lays out an interagency effort to “ensure that building activities receiving federal funding or financing will meet or exceed the latest building codes to the greatest extent feasible regardless of local code adoption.”
Given the broad portfolio of buildings that potentially receive federal funding, the impact could be immense. A number of federal programs, including Federal Housing Administration (FHA) mortgages, loans through the Department of Veterans Affairs (VA) or Department of Agriculture (USDA), and HUD HOME Investment Partnership grants already include efficiency requirements, but are dramatically out of date. These programs make up about 20% of all new residences and about one-eighth of new units in multifamily buildings. Furthermore, the government-sponsored enterprises of Fannie Mae and Freddie Mac are involved in nearly half of all mortgages for both single-family and multifamily properties, yet there are no minimum efficiency requirements for these properties.
A recent analysis by the American Council for an Energy Efficient Economy (ACEEE) found that, if new homes receiving federal support were required to meet updated energy codes, there would be a net savings by 2050 of more than $27 billion, with emissions reductions of more than 275 million metric tons of carbon dioxide. This is equivalent to the annual CO2 emissions from 59 million cars. Requiring ENERGY STAR certification for new homes would save an additional $16 billion and 154 million metric tons of CO2. And requiring heat pumps for heating and water heating would have the greatest impact while being incredibly cost-effective: ACEEE found that all-electric ENERGY STAR homes would see significant savings within just one year.
ENERGY STAR new homes
Speaking of ENERGY STAR, the Environmental Protection Agency recently finalized the latest version of its ENERGY STAR New Homes for single (version 3.2) and multifamily (version 1.2), which will require homes to be about 10% more efficient than the 2021 national model code. There are various versions of ENERGY STAR in place depending on the minimum base code of the state, and many states are still following version 3, which results in less-efficient homes. As of January 1, 2023, all states will be required to meet version 3.1 regardless of the status of their base energy code, and states that have updated their base code to the 2021 IECC will be required to meet version 3.2. Version 3.2 includes a phase-in for strong building envelope requirements, which ensures that ENERGY STAR new homes will save homeowners money while keeping them more comfortable.
Energy efficient buildings powered by clean energy are more resilient, save energy, and cut carbon emissions. Building them right the first time around means avoiding expensive retrofits at a later date: it just makes logical sense. President Biden’s National Initiative to Advance Building Codes leverages the power of the federal government to move building codes forward—and the resulting climate and energy savings will benefit us all.
Lauren Urbanek is senior energy policy advocate in the Climate & Clean Energy Program at the Natural Resources Defense Council. This post was originally published at the NRDC Expert Blog and is republished here with permission.
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26 Comments
The big news about this announcement is temporary suspension of the tariff on imported solar panels.
It seems to me there would be huge unintended consequences if you required all FHA/Fannie/Freddie mortgages to apply to houses that meet current codes. I have a Fannie mortgage, and the house I bought had no insulation ANYWHERE. Not even in the attic. It has no air barrier. The natural gas boiler, since it dates to the 1980s, likely does not meet federal minimum efficiency, as called for in the local code. I don't know if the storm windows that were there would have met the .35 U factor, but one window had no storm window at all, so...
I spent somewhere in the neighborhood of $5,000-$10,000 to insulate the attic and upgrade the storm windows, but I see what houses sell for in my neighborhood when they take off the old siding and do zip panels and replace windows and put new systems in -- it adds about $200,000 to the price.
This article was about updating energy standards for federal buildings and "new construction" of private homes. The only sentence I noticed that was remotely related to your concern about your own Fannie financed home was one sentence: "the government-sponsored enterprises of Fannie Mae and Freddie Mac are involved in nearly half of all mortgages for both single-family and multifamily properties, yet there are no minimum efficiency requirements for these properties." There was no mention of applying this new program to older homes that I could see. I don't understand the point of focusing all one's attention on a sentence that was included in the article just for completeness of context. Your concern was not what the article was about.
The GSE's only care if new construction meets current local code. They will NEVER force a home to be upgraded to current code. That's just silly thinking.
Dear Eric, I agree, most of the article concerns retrofitting federal buildings and requiring rebuilding funded by FEMA or new building partly funded by HUD, USDA etc. to meet a higher standard. But she talks about existing buildings very high up in the story: "Existing buildings are one of the largest sources of carbon pollution in the country, and eliminating the emissions from these millions of buildings will require improving efficiency while dramatically reducing their fossil fuel consumption."
I am for improving the performance of existing buildings, I just wanted to point out that it's complicated, especially in cities with old housing stock like my own.
(By the way, my city requires higher standards whenever there are major additions or gut rehabs of older buildings, which I think is great)
Yes, it's definitely complicated. Believe me, I know it. I certainly would not want there to be a revision of law in which all existing homes sold under Fannie or Freddie had to meet the requirements of the new program. It's not like it wouldn't be great if it could be done - but it can't. It would lock up the real estate market immediately because of both the expense and time required to make the alterations. Just not feasible. I'd also like to make world peace mandatory, but the world doesn't work that way. Changes come in baby steps, if at all. In most things perfection is the enemy of the good because it stops the implementation of the good.
The trick is to know what is both good and also feasible. My opinion, for whatever that's worth, is that this latest program as applied to federal government buildings and new homes is both good and feasible.
Sweet, biden admin has killed the stock market, given us the highest inflation in 40+ years, record high materials prices, and a shortage in the housing market. On the east coast there is a diesel shortage, and they are predicting that by fall we will be seeing $10 a gal diesel, which will only worsen inflation, and make everything else more expensive (even the Amish folks around here that run lumber mills are suffering, and have had to double the price of rough cut lumber).
These regs will surely make it easier and more affordable to build.
No he hasn't. Stop. The USG shutting down the economy combined with helicoptering trillions of dollars into peoples pockets combined with Federal Reserve policy over the last decade has caused this issue.
Inflation: 80% of all US dollars in circulation have been printed since March 2020.
Printed money wears out. The amount of money printed in the past two years is an indicator of how durable it is more than anything else. The exchange of printed money is an exceedingly small percentage of all transactions in this day and age, and for this reason alone it can't be used as an economic indicator.
Its got nothing to do with replacing worn out bills, it has to do with the volume in circulation, and how it got there.
At the beginning of 2020 there was $4.0192 trillion in circulation. By January 2021 $6.7 trillion and by November of last year, that number climbed to $20.354 trillion dollars in circulation.
You didn't mention the historic worldwide COVID epidemic, supply chain disruption, and Russia's war on Ukraine.
Ummmm. Normally we stick to buildings around here. FWIW, Trevor, I’ve found these articles interesting and helpful in trying to separate out the toxic koolaid and understand this strange economy.
Oil companies posting record profits:
https://www.usatoday.com/story/money/economy/2022/05/07/oil-company-record-profits-2022/9686761002/
Lumber prices spike due to climate change:
https://www.theatlantic.com/science/archive/2022/01/why-climate-change-pushing-lumber-prices/621288/
Climate change driving inflation in other things like wheat, corn, coffee::
https://www.theatlantic.com/science/archive/2022/02/greenflation-prices-inflation-climate-change-coffee-lumber/621456/
I’ve noticed that many of those complaining about gas prices are also the same ones who complain about the government setting higher fuel standards. Same applies to buildings. More efficiency means less to complain about when prices spike. So to my mind conservation ought to be patriotic and I don’t blame people for trying to do the right hard thing.
I work with a lot of guys who blame Biden for everything. I feel their pain. But I also figure if you buy an f250 or whatever, you better be prepared for the consequences.
Small consolation but people driving Priuses and the like are actually paying less per driven mile than they did in other other cars in other decades when gas was cheaper: https://www.google.com/amp/s/www.marketwatch.com/amp/story/the-price-of-gasoline-isnt-really-at-a-record-high-in-fact-the-inflation-adjusted-cost-of-driving-a-mile-was-higher-for-most-of-the-past-century-11646770318
We used to be a can-do kind of country. Wish we could get that back somehow.
"We used to be a can-do kind of country. Wish we could get that back somehow."
Yep. We seem to just feel sorry for ourselves and blame some nebulous "other" when things don't go our way. So many people engage in conspiracy theories.
I saw what was heading our way in increased fuel costs and also saw the need to cut my carbon footprint. I installed my own mini split to replace my propane fireplace. My heating bill is now much reduced, and I actually have AC for summer now. Who would've thought? I also installed a solar array/ microinverter system on my home. I did it myself but got some help for permitting it as a grid tie system though my local utility, PG&E. It is early days but it looks like I won't be paying anything for energy when my energy "true up" date comes in March of '23. I am exporting an average energy surplus equivalent to negative $100 each month so far.
I will only get pennies on the dollar of surplus in my utility district. I'm fine with that for one reason; I just bought a used Chevy Bolt EV. That surplus energy is now being used to charge my Bolt. If I don't use all the surplus then so what. Those extra solar panels producing energy above what I use were not expensive to purchase or install. If California ever does install utility level batteries then they can use it and I'm glad to contribute to that.
I understand that not everyone is as fortunate as myself with the level of insolation that my location gets and with a utility, despite all their problems, that will work with me. I'm not a wealthy person and am on a fixed income. That is why I did so much of the work myself. I literally could not afford to pay someone to do it. Your point is well taken. Instead of people complaining and getting an expensive new car or truck with hefty payments they should just plan ahead and save some money in the bargain. If my utility bills are now credits as they are indicated to be, my future utility bill will now be ZERO! I won't even be paying for gas for my car anymore. We have become a nation of whiners and conspiracy theorists instead of taking responsibility for our actions.
The Atlantic.... ;)
FWIW the war in Ukraine has nothing to do with oil, or fuel prices, but the Biden admin banning Russian oil imports does. As does the legislation that makes it basically impossible to build a refinery in the US. The east coast has lost 7 or more refineries in recent years, which is the reason we have a diesel shortage (and why the rise if fuel prices have way outpaced the rise in oil price).
Even without that way back during the democratic primaries oil and fuel prices had been forecast to rise if Biden was elected.
Food prices are going to rise because of the huge jump in diesel, farmers are paying $6 a gallon here, and that is projected to reach $10 by harvest time. We already have plenty of folks around here talking of just letting their crops die in the field, because they can't afford the fuel to harvest.
Food shortages are going to happen when politicians refuse to buy Russian crops, not because of climate change (which will further drive prices higher).
We are a country of addicts all jonesin’ for a cheap fix. And there’s a lot of power and money and propaganda behind keeping it that way.
Among other things I install high performance heat pumps made by Japanese manufactures. That technological innovation arose years ago in response to outrageous Japanese energy prices which were 300-400% higher than in the US.
The Japanese turned a severe competitive disadvantage into a highly profitable world-leading industry. Necessity, the mother of invention, all that. Of course I wish I could install US made, but the performance isn’t there and I don’t want the call-backs.
We could take that approach—hard work, collaboration, innovation, technical skill. But the delusional fantasy of blame and hate and the freedom to fail is somehow easier to sell and easier to swallow. Ah well, gotta go to work.
Why invoke the defense production act?
When did we declare war and on who?
Is there a shortage of heat pumps?
Will the government buy all the heat pumps orders?
Is there room in the warehouse seems like it is full of unused ventilators?
The Democrats see DPA as a hammer and now every problem looks like a nail.
Walta
Along with most of Europe, we are partners with Ukraine in their war with Russia. Just not declared war. The USA has not declared war since 1942 but we've been involved in wars in Korea, Viet Nam, Iraq, Afghanistan, and in Africa. Wars are costly and inflationary.
The Defense Production Act has been reauthorized over 50 times since 1950.
It allows him to act unilaterally. High energy prices could be considered a national security issue. Ironically the Biden Administration took a negative position towards Oil/Gas sector which acts as a disincentive for these companies to expand supply. They spent months in 2021 demonizing Oil/Gas yet here is trying to shame them into lowering prices. Soon he's going "hat in hand" to Saudi Arabia in order to beg for them to increase production. It's political because American voters always blame the current POTUS for everything wrong with their miserable lives.
BTW the Trump Administration evoked the DPA as a response to COVID.
The DPA has been delegated to federal agencies for decades. For example FEMA evokes the DPA whenever they respond to a disaster (ex, Food and Water orders are moved to the front of the line ahead of existing private sector orders)..
He's going hat in hand to beg the Saudi's because his policy has restricted American producers
You are forgetting something.
https://www.politico.com/news/2020/04/02/trump-calls-on-russia-and-saudi-arabia-to-cut-oil-production-161368
And you are purposely ignoring the facts that that the USA was a net exporter of oil before biden's policies forced us to be reliant of foreign supplies, and that story is from during the pandemic.
Biden begging Russia for more oil:
https://townhall.com/tipsheet/katiepavlich/2021/11/01/during-climate-change-speech-biden-begs-opec-to-pump-more-oil-n2598360
Biden banning Russian oil:
https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/08/fact-sheet-united-states-bans-imports-of-russian-oil-liquefied-natural-gas-and-coal/
Biden begging/threatening the oil companies to increase production, after he has promised to put out of business:
https://nypost.com/2022/06/16/bidens-begging-oil-companies-to-produce-while-wanting-to-bankrupt-them/
I thought the future was all about heat pumps, now Im reading "Joe" is all about retrofitting homes with mod cons?
The U.S. electric grid is not up to the task, is that the hint?
Has the U.S. realized it can't "go green" with its wasteful appetite, so next best is to appear green and install mod-con fossil burners?
Is the plan now, Americans will buy Russian fuel to "pay for peace" instead of using its own domestic production?
In MA, RI and no doubt other states, there are state programs (e.g., MASS SAVE) that will subsidize energy improvements to existing homes, targeting the "low-handing fruit" of air sealing, attic insulation, empty stud bay insulation, LED lamps, aged refrigerators, etc. This avoids electric and gas utilities from making capital improvements (new transmission lines or power stations) to meet increasing demands for service. Makes sense to erase some of the need for energy rather than put the money into building more energy generation and transmission facilities. Makes sense to reduce the costs to those least able to pay for energy, than to have utilities build up their infrastructure and charge customers for that work by increasing utility bills.
Yes, use less energy with conservation. Environmental discrimination is going strong in 2022.
"And the gaffer is a man of substance
Drives a jag and takes high tea.
Lives beyond the industrial wasteland,
Laughing in the lap of luxury". Jethro Tull
Looks like instead of the Green New Deal we are going to get more of the Brown Old Deal.
Aqualung my friend, don’t go away uneasy, love the Tull quotes, I think your Tull quote was about one of my former colleagues, a Brit that had to drive his Jag to his home town to show others he had “made it”.
Obama worked hard to spark inflation and the tariffs were to spark domestic solar panel production- two failures. Obamacare was to spark outrageous increases in healthcare and insurance and it did, how soon Larry Summers forgets, while the US now approaches MBS, to reduce inflation?
We need a balanced policy that honors innovation in all energy sectors and conservation. Reliance on foreign countries is not the best whether for solar panels or gas and oil. And where is the antitrust regulation? Fair markets? I’m paying over $20k per year in health insurance premiums and I lived in Europe, where I gladly paid taxes for healthcare for all, and gas/diesel pricing in the US, welcome to what others pay. To me, higher gas/diesel prices should help innovation, as long as antitrust does its job. The healthcare/insurance costs are criminal, with no escape.
As to energy/solar, we need a systems approach that accounts for all costs, past, present and future. Conservation, yes. It can make an immediate difference and is within control of each individual. Government can’t force us to use more energy. Or who knows maybe it can?
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