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We’re Still Putting Up Buildings That Waste Energy. It’s Time to Update Building Codes.

The Inflation Reduction Act has funding to help states and localities implement better energy codes. Energy-efficient buildings can save their owners a lot of money while dramatically reducing emissions.

(Stuart Monk/Shutterstock)
The federal Inflation Reduction Act is law, and it includes $369 billion for climate mitigation and decarbonization in the U.S. economy. Now, cities and states are beginning to plan to put that money into action. A smart place to start is by tapping the law’s new $1 billion grant program to update local building energy codes.

Residential and commercial buildings account for 40 percent of U.S. energy consumption and nearly a third of U.S. greenhouse gas emissions. That’s more than transportation, manufacturing, agriculture or any other sector of the economy. By any measure, we simply can’t adequately address the climate crisis in a timely way without aggressively upgrading our building stock.

And the first thing we must do is stop digging the hole we’re in. That means that while we work on the tougher challenge of improving our existing buildings, we have to stop allowing new homes and buildings that threaten to lock in massive amounts of energy waste for decades, generating hundreds of millions of tons of unnecessary emissions.

Building energy codes do that by requiring minimum energy performance for new construction and major renovation of residential and commercial buildings, just as building safety codes establish minimum safety requirements. States — and in some cases local governments — have the choice to adopt stronger codes. The problem is most have not kept up. Only about a dozen states have adopted model residential energy codes dating from 2012 or later, which require upgrades such as improved insulation, windows and other energy-saving features. Eight states have no energy code at all.

That adds up to a lot of wasted energy. According to the U.S. Department of Energy, the latest model code for homes, released in 2021, delivers energy and cost savings of more than 27 percent compared to the 2009 code that many states still use. Nationally, the department estimates that modernizing building energy codes could save U.S. households and businesses as much as $138 billion through 2040 and cut the emissions-equivalent of 108 million homes. And there are increasingly more ambitious stretch codes that chart the course for buildings that consume net-zero energy.

Considering all those benefits, what’s stopping states and localities from adopting better, more modern energy codes? In some cases, it’s politics. Some leaders are reluctant to impose mandates, even when the upfront investment is documented to deliver significant net cost savings to businesses and homeowners through lower energy bills. But often, it’s inertia and lack of resources. Developing, implementing and enforcing new codes takes time and staff that many states and local governments simply don’t have.

The Inflation Reduction Act could help overcome both of those obstacles. The $1 billion program provides grants through the Department of Energy to help states do the work of implementing codes, along with training, technical assistance and enforcement, that would ensure that new construction meets modern performance standards. A third of the money is for meeting the latest codes and two-thirds is for meeting stretch codes such as for zero-energy buildings.

Additionally, the law sweetens the pot by significantly expanding tax incentives for builders to construct high-performance commercial buildings and houses. Starting next Jan. 1, for example, the law provides a $5,000 tax credit per unit for new homes that meet zero-energy-ready standards, such as having superior insulation and HVAC equipment and being pre-wired for solar panels, and up to $5 per square foot for commercial buildings that exceed code.

This is an enormous opportunity to permanently change the trajectory of our built environment. The U.S. builds well over 1 million homes and other buildings annually, and most of them will be in use for 50 or 100 years. With readily available and affordable technologies, it makes no sense to continue permitting structures that waste energy at such a high cost — both the societal costs of climate change and the direct cost to households and businesses paying higher energy bills. Let’s stop digging and get to work.

Ben Evans is the federal legislative director for the U.S. Green Building Council.

Governing's opinion columns reflect the views of their authors and not necessarily those of Governing's editors or management.
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