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Improving Building Energy Efficiency: Adoption, Enforcement, and Compliance with
Energy Standards and Codes
Minjoo Lee
Bucknell University, 2012
ASHRAE
August 4, 2011
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About WISE
Since 1980, Washington Internship for Students of Engineering, a nine week program in
Washington, D.C., has been providing college engineering students with a great opportunity to
learn about public policy issues that are related to technology and science. Each intern is
sponsored by a professional engineering society and writes a policy report related to their
corresponding society after independent research. Interns meet with influential figures in
Congress, committees, industries, and non-governmental organizations in an effort to write a
thorough policy report. As policy research associates, they get a chance to explore a different
path that engineering can take them.
About ASHRAE
The American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE),
was founded in 1894. It is an international organization of more than 52,000 members in more
than 128 countries. ASHRAE develops standards for ventilation systems, energy efficiency, air
quality, accidents on site, etc. Their research program was developed in 1912 and has been
involved in more than 800 projects that were worth a net cost of $60 million. Its headquarters is
in Atlanta, Georgia, and the office in Washington, D.C. is involved in helping members of
Congress and the Executive Branch understand the importance of standards, codes, energy
efficiency, climate change, and education in science and engineering.
About the Author
Minjoo Lee is from Clarkston, Michigan. She is a rising senior at Bucknell University in the
process of earning a Bachelor of Science degree in Mechanical Engineering with a minor in
Mathematics. She was a resident assistant for 2010-2011 and will continue for 2011-2012. She
has been on the Bucknell Women’s Varsity Golf Team since 2008 and will be co-captain for
2011-2012. In 2010 and 2011, she made the Big South All Academic Team and was the Scholar
Athlete of the Year. She was also the recipient of the Charles F. White Memorial Prize for
Scholar-Athletes in 2010. She is a member of ASHRAE and ASME. At Bucknell, she is a member
of the Student-Athlete Advisory Committee, the Athletics Diversity Issues Committee, Tau Beta
Pi, and serves as the class representative for the Society of Women Engineers.
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Acknowledgments
I would like to thank Doug Read, Mark Ames, and Pat Ryan of ASHRAE for always lending out a
helping hand. Doug and Mark were great mentors who always made sure that I was staying on
the right track with my research and gave me great insight into policy making. Sandy Yeigh, our
Faculty Member in Residence of WISE, did a wonderful job introducing us to how public policy
and technology can merge, and what our roles as engineers are. Thank you to Leanne Tobias,
Dru Crawley, Cliff Majersik, Dave Karmol, Robin Snyder, Jeremy Sigmon, Bryan Howard, Joelle
Michaels, and Steve Ferguson for personally taking the time to meet with me during my
research. I want to thank my colleagues – friends – in WISE that made my summer in DC an
unforgettable one. And finally, I want to thank my parents, and Misook and Billy Dodds for
always supporting me and encouraging me to chase after my dreams.
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Executive Summary
Energy consumption has increasingly outgrown its domestic production in the U.S. since the
1950’s, requiring more imports. Over the past year, the price of imported energy has increased
by 37%. The dependence on imported energy will grow if demand continues to outgrow supply.
If people want to continue having a comfortable standard of living, they should be more aware of
how they consume energy. There is a limited source of natural gas and coal, the primary sources
of energy for buildings. Yet, there is not enough emphasis on energy conservation and efficiency.
Energy efficiency should be the second necessary attribute of buildings, next to safety. Designing
energy efficient buildings can reduce environmental degradation, reduce utility bills, create
more jobs, and stimulate the economy – a much needed assistance in this current state of high
unemployment rates. Retrofitting just 40% of the building sector can create 625,000 new jobs.
Furthermore, if higher standards were required, the benchmark for the market would be raised.
Following standards and codes is the most cost-effective way to increase building energy
efficiency because it requires implementation of existing minimum benchmarks. There is a
strong linkage between adoption, enforcement, and compliance that makes each process equally
important. Unfortunately, there are barriers to each process. There is not enough urgency in
adoption of energy codes, not enough regulation on measuring compliance, inconsistent
structure of training for code officials, misconception that all energy efficient buildings demand
high upfront costs, a lack of awareness and interest of the public, and a lack of cooperation from
building owners themselves.
Standards are voluntary until state or local jurisdictions take action to adopt them into codes
and enforce them. The American Society of Heating, Refrigerating, and Air-Conditioning
Engineers (ASHRAE) sets standards that state and local jurisdictions are advised to use. The
International Code Council (ICC) writes codes that are intended for the sole purpose of being
adopted into law. However, these standards are not always properly adopted and enforced. It is
up to the jurisdictions to realize the importance of abiding by them.
In this report, seven recommendations are proposed to promote and encourage the usage of
standards and codes to increase building energy efficiency: targeting commercial buildings, up-
to-date data collection, standards focused on simpler methods, national building code, energy
disclosure laws, revising Property Assessed Clean Energy (PACE) programs, and consistent
structure of training for code officials.
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Table of Contents
About WISE .................................................................................................................................... 2
About ASHRAE ............................................................................................................................... 2
About the Author ............................................................................................................................ 2
Acknowledgments ........................................................................................................................... 3
Executive Summary ........................................................................................................................ 4
Table of Figures .............................................................................................................................. 6
Abbreviations ...................................................................................................................................7
Introduction to Energy Efficient Buildings .................................................................................... 8
Why is energy efficiency important? Why standards and codes? ..............................................10
Background Information ............................................................................................................... 13
Lack of Interest in Buildings and Awareness of Standards ....................................................... 13
Voluntary Standards and Code Development Process .............................................................. 14
Past Policies ................................................................................................................................ 16
Proponents of Energy Efficiency ................................................................................................ 19
Key Conflicts and Concerns ........................................................................................................... 21
Out-of-Date Energy Data ........................................................................................................... 21
Inconsistent Training for Code Officials .................................................................................... 21
Building Rating Systems ........................................................................................................... 22
Initial Cost ................................................................................................................................. 25
No Statewide Energy Policy & Misinformed Legislators .......................................................... 27
Possible Solutions ......................................................................................................................... 30
Energy Disclosure Laws ............................................................................................................ 30
Reauthorization of PACE .......................................................................................................... 33
Structure of Training for Code Officials .................................................................................... 36
More Regulatory Authority ....................................................................................................... 37
Educational Outreach ............................................................................................................... 38
Recommendations ........................................................................................................................ 39
Bibliography .................................................................................................................................. 47
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Table of Figures
Figure 1: Jobs created for new construction projects and renovations .......................................... 8
Figure 2: Benefits of raising energy efficiency of buildings ........................................................... 11
Figure 3: Barriers in adoption, enforcement, and compliance with energy codes ........................ 12
Figure 4: Requirements that states must meet in order to receive ARRA funds .......................... 18
Figure 5: Moderately high-performance buildings vs. Conventional buildings ........................... 26
Figure 6: Nationwide map of status of codes................................................................................ 28
Figure 7: Issues that ASTM had to address when developing BEPA ............................................. 31
Figure 8: Reasons why FHFA did not support PACE ................................................................... 34
Figure 9: Outline of policy recommendations in this report for implementing energy standards
and codes to raise energy efficiency .............................................................................................. 40
Figure 10: Sales of environmentally certified vs. non-certified homes ........................................ 45
Figure 11: Recommended structure of training for code officials................................................. 46
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Abbreviations
AIA: American Institute of Architects
ARRA: American Recovery and Reinvestment Act
ASHRAE: American Society of Heating, Refrigerating, and Air-Conditioning Engineers
ASTM: American Society for Testing and Materials
BBI: Better Building Initiative
BCAP: Building Code Assistance Program
BEPA: Building Energy Performance Assessment
CABO: Council of American Building Officials
CBECS: Commercial Building Energy Consumption Survey
CBI: Commercial Building Initiative
DOE: Department of Energy
EERE: Energy Efficiency and Renewable Energy
EIA: Energy Information Administration
EU: European Union
FHFA: Federal Housing Finance Agency
GBCI: Green Building Certification Institute
GBI: Green Building Initiative
HVAC: Heating, Ventilation, and Air-Conditioning
ICC: International Code Council
IECC: International Energy Conservation Code
IGCC: International Green Construction Code
IMT: Institute for Market Transformation
LEED: Leadership in Energy and Environmental Design
LTV: Loan-to-Value
NECPA: National Energy Conservation Policy Act
PACE: Property Assessed Clean Energy
PSC: Public Service Commission
RECA: Responsible Energy Codes Alliance
SPLS: Standards Project Liaison Subcommittee
USGBC: United States Green Building Council
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Introduction to Energy Efficient Buildings
President Obama announced the Better Building Initiative (BBI) earlier this year to
address the national need to improve the energy efficiency of commercial buildings by 20% by
2020. The BBI will create more than 114,000 jobs with better tax incentives and competitive
grants. Why did he choose to focus on the building sector? Commercial buildings utilize 68% of
the nation’s electricity, 39% of total energy consumption, and 12% of water usage. Furthermore,
38% of carbon dioxide emissions are from buildings.1 Thus, designing efficient buildings lessens
environmental damage in addition to reducing utility bills, creating more jobs, and stimulating
the economy – a much needed assistance in the current state of high unemployment rates.2 Over
the past four months alone, the number of unemployed Americans increased by 545,000 – over
half a million people lost their jobs. About 20% of those people can be reemployed with the
initiation of programs like the BBI. Retrofitting just 40% of the building sector can create
625,000 new jobs.3 Figure 1 displays the number of jobs that are created in the building sector
for every $1 billion spent.
1 “Why Build Green?|Green Building |US EPA.” US Environmental Protection Agency. Web. 19 July. 2011 <http://www.epa.gov/greenbuilding/pubs/whybuild.htm>. 2 According to the Bureau of National Statistics of US Department of Labor, the number of construction jobs have shown little to no change since early 2010. For more information, see http://www.bls.gov/news.release/pdf/empsit.pdf 3 Cliff Majersik of IMT spoke about the positive impact energy efficient buildings can have on the nation’s economy at the High-Performance Building Congressional Caucus Coalition luncheon briefing in May 2011. For the rest of the slides, see www.hpbccc.org/hpbweek/HPBCCC_Briefing_Invite_May_24_2011.pdf
Figure 1: Jobs created for new construction projects and renovations
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There is a limited source of natural gas and coal, the primary sources of energy for
buildings. Energy conservation should be a major concern if people want to continue living as
comfortably as they are accustomed: watching TV, using computers, charging cell phones,
taking showers, doing laundry, cooking, etc. Thus, energy efficiency should be the second
consideration of building construction and maintenance, next to safety. Otherwise, much of the
consumed energy will be wasted and accelerate the unnecessary depletion of fossil fuel. To give
an idea of how much energy production will increase in the future, data from 1996 to 2006 can
be observed. Dry natural gas was the third primary source of energy in the world in 2006,
increasing in production from 81.1 trillion cubic feet in 1996 to 104.0 trillion cubic feet in 2006.4
Higher efficiency would lead to less fuel consumption, decreasing dependence on fossil fuel, and
maximizing building performance.
So what can be done to construct high performance buildings with higher energy
efficiency? Industries and organizations have been researching ways to address this issue. While
it is important to continue to focus on innovating new technologies and expanding research and
development, the most cost-effective solution would be the adoption, enforcement, and
compliance of existing energy standards. This approach cannot be stressed enough. Building
codes address not only safety and proper designs for construction and renovations but can also
set standards for energy efficiency. Raising the code compliance would save Americans billions
of dollars every year in energy expenditures. Standards are voluntary until state or local
jurisdictions take action to adopt them into codes and enforce them. If higher standards were
required, the benchmark for the market would be raised. There would be a healthy competition
between industries to make buildings more efficient. As each contractor tries to surpass the
other, the average energy efficiency of buildings will most likely rise. Furthermore, such high
4 “International Energy Annual 2006.” US Energy Information Administration. Web. 19 July. 2011 <http://www.eia.gov/iea/overview.html>.
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energy standards would increase the likelihood of buildings performing as originally intended.
This in turn would increase the satisfaction of the client.5
As local jurisdictions adopt more standards that involve energy efficiency, more detailed
inspections would have to focus on energy savings. In addition, the collaboration of code
officials with different expertise would expand as more knowledge of lighting, insulation, HVAC,
plumbing, etc. would be needed. The American Society of Heating, Refrigerating, and Air-
Conditioning Engineers (ASHRAE), sets standards that state and local jurisdictions are advised
to use. These standards are called model codes by the federal government. However, these
standards are not always properly adopted and enforced. Some jurisdictions do not have the
proper resources, such as training for code officials, to increase the level of compliance.
Standards are voluntary so it is up to the jurisdictions to realize the importance of abiding by
them. If buildings met the existing standards, the annual energy savings would increase
significantly. Taking action to fully commit to adopting codes and complying could result in
energy savings as high as $10.2 billion for American consumers every year as well as reducing
CO2 emissions by 30 million tons.6 If jurisdictions realized the importance of adopting these
standards, it would make a significant difference in the building sector. However,
inattentiveness continues and there is still a lack of compliance.
Why is energy efficiency important? Why standards and codes?
The current economic state of the country has taken a toll on everyone. The price of
energy is still relatively low compared to those of other countries. Energy bills have not quite
reached the price that would otherwise compel average Americans to be more concerned with
their level of energy consumption, thus lowering the issue in terms of perceived urgency and
importance. For instance, American drivers will be more conscious of investing in fuel-efficient
5 Tobias, Leanne. Personal Interview by Minjoo Lee. 14 June 2011. 6 "Policy Maker Fact Sheet |Building Energy Code Compliance: A Low-Cost Tool to Boost Jobs, Cut Pollution, and Advance Energy Independence; Every Dollar Spent Yields $6 in Energy Savings."Building Energy Code Compliance. Institute for Market Transformation, Oct 2010. Web. 19 Jul 2011. <http://www.imt.org/codecompliance.html>.
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Reduce emissions and have less harmful impact on the environment
Help air quality control and provide a better working environment for employees
Raise the value of property
Create more jobs
Increase energy savings
or hybrid cars only when the price of gas exceeds $4 per gallon, which was noticeable in 2008
when the average price did reach $4.7 Hence, the expectation of people to change their lifestyles
is low until there is a dramatic rise in utility bills. For this reason, it is difficult today to persuade
building owners to strive for higher energy efficiency and make them see the benefits of energy
savings. However, this makes it even more important to continue to raise awareness.
Following standards and codes is one of the cheapest ways to increase building energy
efficiency because it requires implementation of existing minimum benchmarks. Figure 2 shows
that raising efficiency can:
The current problem is that the standards developed by qualified professionals and public
commentaries are pushed aside by state and local governments from adoption or the codes are
powerless because the follow-up process after adoption is executed poorly and without strong
regulation. Persuading states to adopt building energy codes is not as big of a barrier as
7 Sternal, John. "LeaseTrader.com Says Consumer Behavior May Not Change Until $4 per Gallon."Reuters (2011): n. pag. Web. 24 Jul 2011. <http://www.reuters.com/article/2011/03/01/idUS255255+01-Mar-2011+MW20110301>.
Figure 2: Benefits of raising energy efficiency of buildings
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enforcing the codes and measuring the level of compliance. However, this should not give the
false impression that adoption, enforcement, and compliance do not possess an equal degree of
importance or urgency. One does not have precedence over the other. There are barriers to every
stage as shown in Figure 3:
Figure 3: Barriers in adoption, enforcement, and compliance with energy codes
There is a strong linkage between adoption, enforcement, and compliance that makes
each process equally important. More creative approaches should be taken by federal, state, and
local governments to make sure that the adopted codes are being followed as intended. The
states must be more aware about the need to raise energy efficiency of buildings by legally
adopting standards to be codes and take serious action to confirm that people are complying.
The efforts to adopt and enforce these standards will be a waste if there is no teamwork or
commitment from all the players of the building industry and the government. Each stakeholder
has a different part and need to contribute in order to come to an agreement of what is best for
the country as a whole.
Adoption
•Not enough state and local jurisdictions are aware of how cost-effective energy codes can be
•Energy efficiency of buildings usually does not take precedence over other issues
Enforcement
•Variations in training code officials between jurisdictions
•Difficult to regulate how closely the building owners are following standards and codes
Compliance
•Tendency to think energy efficient buildings will always require more money upfront
•Lack of interest and awareness among the general public
•Lack of incentives for building owners to retrofit
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Background Information
Lack of Interest in Buildings and Awareness of Standards
Technology has grown tremendously over the past few decades, and people have become
accustomed to expecting everything they use to be efficient. For instance, cars receive a great
deal of attention, and the automobile industry has expanded research and development for more
speed, less fuel, and less emissions. The media does a good job of advertising the newest car or
the greenest car, however, there is not enough of a spotlight on buildings. People spend 90% of
their time inside buildings,8 not cars. While it is true that interest in building efficiency has
grown over the past few years, it is still not as well advertised or promoted to the public. For
instance, when “green cars” are searched on Lexis Nexis – an information provider of legal
documents, news, and business sources – it has about 70% more results than “green buildings.”
Architects and engineers pay close attention to energy efficiency of buildings than
consumers, partially due to lack of general public education and awareness. If more standards
are adopted into codes, and information on energy efficiency is disclosed to consumers, there
will be more assurance for consumers or investors, who will have the comfort of knowing that
the building will perform to its full potential while saving money. An additional benefit to
complying with standards is the reduction of greenhouse gas emissions. In fact, the
International Code Council (ICC) proposed the International Green Construction Code (IGCC),
which addresses the issue of harmful impacts of buildings on the environment. IGCC specifically
targets the need for protecting the environment but following other energy standards can also
assist.
8 Environmental Protection Agency. Buildings and their Impact on the Environment: A Statistical Summary. , 2009. Web. 24 Jul 2011. <http://www.epa.gov/greenbuilding/pubs/gbstats.pdf>.
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Voluntary Standards and Code Development Process
ASHRAE’s Board of Directors is responsible for selecting from volunteering ASHRAE
members to be part of the Standards Committee to collaborate, to propose, and to revise
standards. They are then approved by the Standards Project Liaison Subcommittee (SPLS). The
Standards Committee must be diverse in the members’ knowledge and expertise in the relevant
standards. It is important that the standards are revised in order to be parallel with the
constantly changing technology. Following up-to-date standards would increase the likelihood
of energy efficiency. Once new standards are proposed or modifications are made to previous
proposals, it is reviewed by the public for feedback and comments. This collaboration assures
objectivity as any person or group can participate in the process. The Standards Committee
settles on the final version after considering and taking the public’s comments into account. The
final draft is then reviewed by the ASHRAE Board for approval to be official.9
ASHRAE 90.1 is a well known standard that is intended for new constructions, additions,
and alterations of all commercial buildings, excluding low-rise residential buildings.10 It is used
as a model code by many jurisdictions and is revised every three years. It sets minimum
requirements for lighting, HVAC, insulation, fenestration, equipments, and more. The standard
is written in a broad way that can be applied to a wide range of buildings, which makes
compliance easier, regardless of the climate or site conditions.11
ASHRAE 189.1 is a standard that incorporates energy efficiency but its main goal is to
address the construction and alterations of green buildings. Like 90.1, it was developed for all
buildings except low-rise residential buildings. It is written in code language so that it can be
easily adopted by jurisdictions as their building energy policy. ASHRAE 189.1 covers a range of
9 "How to Join Project Committees." ASHRAE. ASHRAE, n.d. Web. 21 Jul 2011. <http://www.ashrae.org/technology/page/1952>. 10 Low-rise building is a building with three stories or less. Commercial buildings include all building types except residential, manufacturing, industrial, and agricultural. 11 Charles Eley Associates and United States. Dept. of Energy. 90.1 user's manual: ANSI/ASHRAE/IESNA standard 90.1-2004. 90. American Society of Heating, Refrigerating and Air-Conditioning Engineers, 2004, Print.
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topics: water use efficiency, materials, site sustainability, indoor environmental quality, and
effect on the environment. The standard has mandatory provisions and prescriptive options. It
encourages careful selection of sites and utilizing existing building envelope, better insulation,
sensor controlled lighting systems, use of Energy Star equipment, installation of solar power and
other renewable energy power systems, and more. Standard 189.1 is not a design guide but it is a
model code. If a builder were to use Standard 189.1 for construction or retrofitting, the building
would perform at about the same efficiency as it would have with Standard 90.1 with an
additional 30%.12
There are a few differences between what ASHRAE does and what the ICC does.
ASHRAE writes standards while the ICC develops codes.13 It is a different developmental
process for the ICC because their process is not based on consensus. The final decision is
dependent on members of the ICC that are governmental members, who are people with legal
authority to adopt or enforce codes. All comments and proposals are brought up in public
hearings. These ideas are discussed by the ICC and put back into the Final Action Hearing to
observe the differences in comments and the changes. ASHRAE, on the other hand, takes all
commentaries into consideration, including the private sector. Input from the private sector
raises the possibility of limiting what standards can be developed because they have financial
interests.14 At the same time, it is a good opportunity to hear from the stakeholders that are
involved in the private sector because they are members of the building community that will
have to comply. The ICC published its IGCC and has made ASHRAE 189.1 a compliance option
for jurisdictions that wish to adopt the IGCC. The International Energy Conservation Code
(IECC) was published in 1998 by the ICC and it is intended for both residential and commercial
buildings. In 1992, the federal government released the Energy Policy Act, which required states
12 Majersik, Cliff. "What is ASHRAE/USGBC/IESNA. Standard 189.1P? The Framework and Elements." IMT, May 2009. Web. 21 Jul 2011. <http://www.imt.org/files/FileUpload/files/Codes/ASHRAEoneeightyninepointone.pdf>. 13 Standards are voluntary benchmarks that serve multiple purposes when written; adoption is one of the purposes. Codes are developed with one intention – to be adopted into law. 14 Karmol, Dave. Personal Interview by Minjoo Lee. 14 July 2011.
16
to consider adopting a national model code. New codes were developed in response to the act,
including the publication of the IECC. These codes are model codes that jurisdictions can follow
on a minimum basis.15 Since the first version, the IECC was modified in 2001, 2004, 2007, and
2009.
Past Policies
A general overview of past policies on energy codes is important to consider. Studying
what approaches have already been taken can help develop changes that should be made in the
future for further improvements. Gustave Flaubert, a 19th century French novelist, once said,
“Our ignorance of history causes us to slander our own time.”
In 1978, the National Energy Conservation Policy Act (NECPA) was passed in response
to the energy crisis of the 1970’s.16 In order to reduce the consumption of energy and conserve
non-renewable energy, the act addressed all areas that were the cause of the high demand for
energy, including the building sector. It replaced the Energy Policy Conservation Act of 1975 and
made multiple amends of other acts that included the Energy Conservation in Existing Buildings
Act of 1976, Housing Act of 1949, the Government National Mortgage Association, and the
National Housing Act. The Act appropriated $5 million dollars for the Utility Program every
year from 1979 to 1981. To popularize the idea of saving energy, it allowed loans to be provided
to homeowners if they chose to incorporate solar panels and other methods of energy
conservation.17 The National Energy Conservation Policy Act is an important understructure for
many of the energy requirements today, and set a good precedent for offering incentives for
efforts to increase energy efficiency.
15 "Code Development." Online Code Environment and Advocacy Network. Building Codes Assistance Project, n.d. Web. 21 Jul 2011. <http://bcap-ocean.org/research-topic/code-development#>. 16 Sigmon, Jeremy. "Greening the Codes." USGBC Updates White Paper and Introduces a New Policy Brief. USGBC, June 2010. Web. 21 Jul 2011. <http://www.usgbc.org/ShowFile.aspx?DocumentID=7403>. 17 United States. National Energy Conservation Policy Act. , 1978. Web. 21 Jul 2011. <http://www1.eere.energy.gov/femp/regulations/necpa.html>.
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Congress passed the Energy Policy Act of 1992 in order to increase overall energy
efficiency across the country, including the building sector, and to raise awareness of alternative
or renewable energy sources. There are twenty-seven titles in the act that address the issue of
reducing the amount of imported energy, emphasizing the need to conserve energy in buildings,
and authorizing incentives to increase the use of renewable energy. States had to develop their
own codes that established minimum energy guidelines or adopt model codes such as ASHRAE
90.1. Within two years after the act was passed, every state was required to notify the Secretary
of Energy that it verified its current policies on residential building codes and that they were
already energy efficient or they were modified to meet or surpass the Council of American
Building Officials (CABO) Model Energy Code, 1992. For commercial buildings, the states’ code
had to meet or surpass ASHRAE 90.1 standards. The Secretary was given the authority to assist
states by offering incentive funding in order for states to develop and enforce appropriate energy
efficiency codes.
The act required all Federal buildings to establish Federal building energy standards
within two years of passing the act by consulting pertinent agencies, such as CABO and ASHRAE.
These standards had to be realistically achievable for modern technology as well as be
economical. As it was previously stated for states, residential buildings had to refer to CABO
Model Energy Code 1992 and commercial buildings had to refer to ASHRAE 90.1-1989. These
standards had to be effective within a year of the release of the standards.
Aside from the previous mandatory rules, the Secretary was also given permission to
support the progress of voluntary building energy codes. The Secretary could advocate the
upgrading of codes by assisting the research for better energy efficiency, including collecting
data and developing new technology relevant to the set standards. To ensure compliance, the
Secretary was required to give annual reports to the Congress regarding state-by-state activities,
recommendations for voluntary codes, and advice for Congress to support further opportunities
to make progress in building energy efficiency.
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Adopt a building energy code for residential buildings that meets or exceeds the 2009 IECC
Adopt a building energy code for commercial buildings and high-rise residential that meets or exceeds ASHRAE 90.1-2007
Develop and implement a plan to achieve 90% compliance by 2017
The Energy Policy Act of 2005 made amends to the NECPA and updated previous energy
standard requirements, along with measuring and reducing energy.18 It essentially revised the
Energy Policy Act of 1992 so that it would match the rising demand for energy and correspond
to the need for better energy efficiency. It addressed how energy consumption should be
metered and reported, establishing building energy code compliance programs, how much
renewable energy should be utilized, the financial support that could be given to state and local
governments that wanted to implement efficient technologies or renewable energy,
requirements for Federal buildings to follow ASHRAE standards, and other topics regarding
energy efficiency.
The American Recovery and Reinvestment Act of 2009 (ARRA) was signed by President
Obama primarily to help the country recover from the economic downturn and create jobs. $3.1
billion were designated to the State Energy Program (SEP). If the state agreed to receive the
funds, it had to agree to the following conditions as presented in Figure 419:
The state or local governments that have the power to adopt the codes should adopt
ASHRAE 90.1 – 2007 or adopt standards of their own to meet or exceed the same energy
18 Energy Policy Act of 2005 - Summary by Senate Committee on Energy and Natural Resources. , 2005. Web. 20 Jul 2011. <http://doi.net/iepa/BillSummary.pdf>. 19 The National Association of State Energy Officials (NASEO) and BCAP wrote “Building Energy Codes 101: Statewide Benefits to Adoption & Compliance” that summarized these requirements from ARRA.
Figure 4: Requirements that states must meet in order to receive ARRA funds
19
savings, expand energy efficiency programs, funnel funds to regulatory authorities to check for
compliance of codes, and distribute appropriate financial assistance to projects that would help
with energy efficiency.
Proponents of Energy Efficiency
There are programs, organizations, and agencies that promote higher energy efficiency of
buildings including non-profit organizations and government agencies. The Building Code
Assistance Program (BCAP) is part of the Alliance to Save Energy, which is made of about eighty
different organizations that are all built on the common ground of the importance of energy
efficiency. It was started in the U.S. in 1977 to lean towards greater energy efficiency – beyond
just buildings – and to refrain from using more energy than necessary. They consist of
professionals and experts from all over the world in all sectors that research, educate, and
politically collaborate to achieve better energy efficiency and protect the environment.20 The
main goal of BCAP is to convince state and local governments to adopt and enforce building
codes, and help them comply. It educates the public about the fundamentals of codes that are
not being met and the consequences of not meeting them.
The Alliance to Save Energy also administers the Responsible Energy Codes Alliance
(RECA), which is an association of professionals of energy efficiency that encourages state and
local governments to adopt the IECC or make little changes to it. RECA members believe that
the nation should be more consistent and adopt a single code to make it easier for all players
involved.
The Institute for Market Transformation (IMT) is a non-profit organization that has
been dedicated to promoting energy efficient and sustainable buildings since 1996. IMT has
helped write codes and plays a consulting role for state and local governments by helping them
strategize effective policies for adoption and enforcement of codes. They often conduct
20 "Our Mission." Alliance to Save Energy. The Alliance to Save Energy, 2011. Web. 21 Jul 2011. <http://ase.org/about-us/our-mission-statement>.
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educational outreaches by holding presentations and events that raises awareness of energy
efficiency of buildings.21 They believe that following codes helps raise energy efficiency and
stimulate the economy overall by creating more jobs and increasing property values. They help
drive policymakers to push for adoption of codes and help them through the process.
The United States Green Building Council (USGBC) is a non-profit organization that was
developed in 1993. It was started to advocate better building design in terms of sustainability
and created a building rating system called Leadership in Energy and Environmental Design
(LEED) in 2000. The Green Building Initiative (GBI) is a non-profit organization that is
dedicated to promoting better and cost-effective building practices that will increase the energy
efficiency of buildings and reduce negative environmental impact, a very similar mission to that
of the USGBC. It also provides a building rating system, Green Globes, and can give
certifications like LEED. These organizations do not develop standards and codes but they are
building codes advocates.
The DOE has an office of Energy Efficiency and Renewable Energy (EERE) that does
research on all things essentially related to energy. The EERE has numerous programs that
focus on solar, geothermal, wind, biomass, etc. along with building technologies. It launched the
Commercial Building Initiative (CBI) in 2008 that was intended to reduce energy use of new
and existing commercial buildings. The CBI is primarily focused on researching cost-effective
technologies to retrofit existing buildings and their target for the future is to help construct
buildings that will be 50%-70% better in comparison to those that follow ASHRAE 90.1-2004.
The CBI also promotes educating consumers about energy efficiency, collaborates with
organizations that develop standards and codes, and generates ideas on how to incentivize
builders and building owners to support energy efficient buildings.22
21 "About IMT." IMT. Institute for Market Transformation, n.d. Web. 21 Jul 2011. <http://www.imt.org/about.html>. 22 "Commercial Building Initiative." About the Initiative. US Department of Energy |Energy Efficiency and Renewable Energy, n.d. Web. 21 Jul 2011. <http://www1.eere.energy.gov/buildings/commercial_initiative/about.html>.
21
Key Conflicts and Concerns
Out-of-Date Energy Data
The Commercial Building Energy Consumption Survey (CBECS) is conducted by the
Energy Information Administration (EIA) of the Department of Energy (DOE). The EIA is an
independent agency whose primary goal is to collect statistical data about energy. CBECS has
been conducted since 1979. The current issue with CBECS is that agencies are using their data
from 2003 because CBECS 2007 was determined to be invalid due to sampling problems and
CBECS 2011 was suspended due to insufficient funding. The EIA hired a new contractor in 2007
that was using an experimental sampling method that was intended to lower the cost of the
survey but after finding numerous errors, the EIA rehired their previous contractor. ASHRAE
and members of the building community are collaborating to raise funds and convince the
Congress the importance of the survey for the building industry. A version that was created
almost a decade ago that is used as a reference for current technology is very ineffective and
hinders the progress of improving energy efficiency. Energy Star, ASHRAE, and other
organizations use CBECS in order to get a grasp on what the minimum benchmark should be for
energy efficiency.
Inconsistent Training for Code Officials
Today, the code officials generally inspect the buildings for safety purposes so it is
possible that their inspections are not carried out adequately – or properly. The code official is
expected to check for safety as well as the overall building performance. There are different code
officials to specialize in different fields, such as fire safety, but it is not always so. Their main
concern is usually focused around the issue of safety, thus increasing the likelihood of
overlooking energy related components of the building.23 For small jurisdictions or states with
smaller populations, there is a shortage of code officials. When there are not enough code
23 Crawley, Dru. Personal Interview by Minjoo Lee. 17 June 2011.
22
officials in the area, the process of inspecting buildings on site can get a lot more difficult and
not as productive. Codes can be quite difficult to interpret and the handbooks that the code
officials use are very lengthy and extensive.24 It is not realistic to rely on just one or two code
officials to understand every code and apply it correctly.
Code officials do not work out of the state office but typically work for the local
jurisdiction with authority or a third party agency. Some jurisdictions have the resources and
can afford to train their code officials thoroughly, while others do not. There are variations in
training between jurisdictions. Georgia’s state policy essentially adopts ASHRAE 90.1 and IECC,
and does a good job with enforcement and compliance. However, when looking at the number of
their code officials and the training that they have had, only 14% have professional credentials
with annual training, 20% receive on-site job training, and 18% have no technical backgrounds
with limited training.25
It is difficult to observe how code officials are trained because it widely varies across the
nation, which makes it difficult to identify problems within the training. While the reason
behind the differences in training is logical due to different standards and codes between
jurisdictions, the variations can hinder finding the best methods to train code officials. Different
training structures prevent consistency in enforcement and compliance.
Building Rating Systems
Some building rating systems have misled people to believe that they serve the same
purpose as standards and codes. LEED is a rating system that was intended to get the building
industry to be more involved in bettering the environment by lowering emissions, using
renewable energy, increasing daylight, and utilizing recyclable or sustainable materials because
buildings have a significant impact on the environment. Its overall intention is ethically sound;
however, it is structured in a way that it is criticized for digressing from lowering energy
24 Sigmon, Jeremy. Personal Interview by Minjoo Lee. 29 June 2011. 25 Ferguson, Steve. Telephone Interview by Minjoo Lee. 08 July 2011.
23
consumption. An uninformed person may be falsely misled to believe that a LEED credited
building will consume less energy and is green. For example, a roof that uses solar panels may
need to consume an excessive amount of water to avoid high temperatures. So while the
building may be green in terms of using less electricity, it would be consuming much more water
than it otherwise would require. Some say that the second letter of the acronym LEED, energy,
is not emphasized enough.
The USGBC hired a third party, Green Building Certification Institute (GBCI), for the
review process. GBCI’s main responsibility is to review the buildings and verify that they meet
the standards set by LEED in order to give them the certification.26 A major flaw in this
verification process is that there are no on-site reviewers for the commercial sector. GBCI takes
photographs and makes assessments from documentations, rather than physically sending out
reviewers to inspect.27 This off-site verification can create room for error in the certification of
the building.
The GBI consists of a board of fifteen directors with diverse backgrounds ranging from
construction companies, academic institutions, non-governmental organizations, and building
industries. Each director is a representative of the group they belong to and they are each
entitled to one vote in order to have a fair system of checks-and-balances. The GBI provides a
rating service, called the Green Globes, which was started towards the end of 2004. Green
Globes gives guidance to builders that include optional certifications. Like LEED, the rating is
based on a point system that addresses energy, indoor environment, water, emissions, site, and
resources. If more than 35% of the point system is achieved, the construction company and the
building owners are qualified to pursue a Green Globes certification. A third party assessor is
26 "About GBCI." GBCI. Green Building Certification Institute, n.d. Web. 21 Jul 2011. <http://www.gbci.org/org-nav/about-gbci/about-gbci.aspx>. 27 Sigmon, Jeremy. Personal Interview by Minjoo Lee. 29 June 2011.
24
hired to do an extensive review that includes documentation reviews and on-site assessments, a
slightly different process than that of the USGBC’s LEED.28
It is possible that some people can be confused about what the difference is between a
LEED or Green Globe certification and adoption of codes. Why would a state need to require all
buildings to follow codes if there are those who take the initiative to go above and beyond in
order to be certified by a rating system? Why should they expect everybody to be on board by
legally adopting them into laws? They must understand, however, that those certifications are
given by rating programs and they do not necessarily follow ICC or ASHRAE standards. The
common problem with rating systems is that when builders receive credits for incorporating
certain innovative designs for better sustainability, it does not necessarily mean that the
building emits fewer gases or performs at higher efficiency. They can pick and choose from a list
and claim they have a green building when in actuality, they may have missed other major
building components that need to be altered to reduce energy consumption.
Building rating systems can undermine the importance of standards and put them on the
sideline when it doesn’t have the same credibility as standards. They have created a bit of
confusion in the market and some states have actually used rating systems as a code, which is
not what they were intended to be. Connecticut Public Act 07-242 was adopted in 2007 and
required public and private buildings to meet LEED Silver standards if the cost of construction
exceeds $5 million.29 The USGBC is making an effort to clear up this misinterpretation. LEED
and Green Globes can also give a wrong impression to the public that the process of constructing
or retrofitting a building to be high performance is expensive, when that is not the case at all.
Following standards is not equivalent to unaffordable upfront costs.
28 "About the GBI." Green Building Initiative. GBI, n.d. Web. 21 Jul 2011. <http://www.thegbi.org/about-gbi/>. 29 "Level IV Policy Action - Innovative Legislation." Online Code Environment and Advocacy Network. BCAP, n.d. Web. 21 Jul 2011. <http://bcap-ocean.org/policy-action-tool/Level-IV>.
25
Initial Cost
Some building owners do not support code adoption or compliance because they do not
see the direct connection between their choice to retrofit and the potential personal benefits, as
it is not their responsibility to pay the utility bills. The incentive is limited. And those that do pay
the utility bills most likely do not have an extensive knowledge on what makes a building energy
efficient, whether it is increasing daylight or having cost-effective insulation. Energy efficient
standards would decrease the amount of faulty equipment that is manufactured, thereby
increasing the chance of purchasing equipment of good quality to install in buildings.30
There is also a misconception that energy efficient buildings lead to costly projects that
endorse the newest technology. On the contrary, there are low-tech methods and equipment
that can be effective when retrofitting a building. In many countries, the initial cost of
constructing high-performance buildings has actually been lower than constructing
conventional buildings. Those buildings that do cost more due to incorporating more efficient
equipment and methods end up being paid off in only a few years.
A study was done in Vancouver, Canada that compared the cost and energy consumption
of conventional and moderately high-performance buildings. The conventional buildings
utilized double glazed windows that were filled with air in between with conventional heating
and cooling systems while the moderately high-performance buildings used triple glazed
windows that were filled with argon (alternative gases with heavier molecular weight create less
motion between the layers and increases thermal resistance) and radiant-slab heating and
cooling systems. The moderately high-performance building was 9% less expensive to construct
30 Loper, Joe, Lowell Ungar, David Weitz, and Harry Misuriello. Alliance to Save Energy. Building on Success: Policies to Reduce Energy Waste in Buildings. , 2005. Web. 24 Jul 2011. <http://www.cee1.org/eval/db_pdf/964.pdf>.
26
Moderately High-Performance Conventional
and consumed less energy compared to the conventional building.31 Figure 5 shows the average
construction cost and energy consumption of both buildings.
Funds would need to be raised to promote awareness and heighten compliance but it
should be noted that every dollar spent in the effort would result in six dollars in energy
savings.32 Enforcing energy codes is effective, affordable, and a necessary step. This method
would mainly demand professionals to follow regulations that already exist. Policies must be
proposed to emphasize that standards are constructed to be followed and are highly
recommended. These policies can include financial incentives, such as tax deduction and utility
rebates, for agreeing to make standards mandatory or for voluntarily meeting them. The initial
cost may seem high but it would be paid off, and jobs would be created in the process.
31 Harvey, L.D. Danny. Energy & the New Reality 1: Energy Efficiency & the Demand for Energy Services. 1. London: Earthscan, 2010. Print. 32 "Policy Maker Fact Sheet |Building Energy Code Compliance: A Low-Cost Tool to Boost Jobs, Cut Pollution, and Advance Energy Independence; Every Dollar Spent Yields $6 in Energy Savings."Building Energy Code Compliance. Institute for Market Transformation, Oct 2010. Web. 19 Jul 2011. <http://www.imt.org/codecompliance.html>.
Figure 5: Moderately high-performance buildings vs. Conventional buildings
27
No Statewide Energy Policy & Misinformed Legislators
All states are required to meet the minimum energy requirement as stated by the Energy
Policy Act of 1992 and 2005, whether they adopt ASHRAE standards or implement their own.
However, this does not mean they have a statewide energy policy. This can be due to several
reasons. Some states feel very strongly about local jurisdictions taking precedence and feel that
energy policy should be determined at the local level, which is not unreasonable because smaller
shops and stores may not even be able to afford to make initial payments to raise energy
efficiency. Some city councils are very close with local developers that bring in business and do
not want to create trouble by mandating energy codes for them to follow. Smaller developers
think of codes as a hassle and do not feel the need to submit to them if customers do not vocalize
their feelings and opinions. Following energy codes would make their jobs a little more difficult.
The attitudes of the builders are not always positive towards government mandates. They can
get offended by the government telling them how to do their jobs. There are some states that are
very sensitive on being “commanded” to adopt codes and are offended by the federal
government ordering them to do so. It can be the principle behind the federal government
legally binding them to codes rather than the codes themselves that can disintegrate the support
behind code adoption.33 The building industries and architectural firms usually belong to trade
associations. When there are disagreements within the trade association on the issue of
updating or adopting codes, the trade association will usually protect the status quo and
continue what they have been doing rather than make changes. In order to avoid these
disturbances, they speak to the state and local jurisdictions so there won’t be more stringent
codes or changes to adopting new codes.34 The barrier to making codes mandatory is not always
technical or about expenses, it can be behavioral. Figure 6 visually shows how states implement
33 Snyder, Robin. Personal Interview by Minjoo Lee. 06 July 2011. 34 Majersik, Cliff. Personal Interview by Minjoo Lee. 13 July 2011.
28
codes differently and what states have adopted the latest ASHRAE standards while others use
older standards or none at all.
State legislators are misinformed at times about how energy efficiency can be achieved,
which can be the reason why they refuse to adopt IECC of ASHRAE standards. They will hear
that it costs thousands of dollars to meet the standards if they are adopted without concrete
proof. BCAP was concerned that if this was indeed the case, there was a major problem that
needed to be addressed. In response, they calculated the cost benefit analysis. Their results and
Figure 6: Nationwide map of status of codes
29
data showed that a moderately high performance building only needs a thousand dollars for the
initial payment on average. People tend to think about the money that they have to invest only at
the present moment rather than think about the net amount they will end up saving in the long
run. Approximately $2,150 is spent every year per household for utility bills for residential
buildings in America. This can be reduced by 15% or more by meeting energy standards alone,
which is equivalent to saving $300 per year.35 Hence, a moderately high-performance building
that requires an initial cost of a thousand dollars would be paid off in less than four years.
A common misbelief is that standards force the federal, state, and local governments to
adopt them into codes when they are only a reflection of biased opinions of organizations like
ASHRAE. On the contrary, jurisdictions have the option of writing and adopting their own codes
without referring to ASHRAE standards. Kent Peterson, past president of ASHRAE, said that
“these standards do not reflect the state-of-the-art solutions for energy or high-performance
building design. They reflect the minimum benchmarks for performance if jurisdictions choose
to regulate these areas.”36 If a jurisdiction is not comfortable or is unfamiliar with the building
industry, referring to existing standards and adopting them is a smart choice. After all, most
policymakers tend not to have technical backgrounds and will need the assistance of
professionals in understanding what standards would be beneficial for their jurisdiction. It must
also be noted that ASHRAE is nonpartisan.
35 "Policy Maker Fact Sheet |Building Energy Code Compliance: A Low-Cost Tool to Boost Jobs, Cut Pollution, and Advance Energy Independence; Every Dollar Spent Yields $6 in Energy Savings."Building Energy Code Compliance. Institute for Market Transformation, Oct 2010. Web. 19 Jul 2011. <http://www.imt.org/codecompliance.html>. 36 Peterson, Kent. "Code-Enforceable Standards (189.1 Chair Responds)." ASHRAE Journal. August (2010): 15. Print.
30
Possible Solutions
Energy Disclosure Laws
The property disclosure of energy usage is a law of the European Union (EU) that has
been adopted and effectively enforced. It was called the European Union Energy Performance of
Buildings Directive 2002/91/EC and required the members of the EU to comply at the latest by
2009. Commercial buildings with a square footage as small as 10,760 were still affected by this
law in England. Australia has also recently adopted the Building Energy Efficiency Disclosure
Act of 2010 that takes the law one step further by requiring advertisements and real estate signs
to disclose energy information. This building energy performance labeling has started in the
United States but it has been a slow process on state and local levels. It has been enacted at local
levels because most real estate laws and policies are the responsibilities of local governments.
The places in the United States that have adopted this disclosure law are Washington, D.C.,
Austin, Texas, New York City, San Francisco, California, and the state of Washington. The
disclosure law has mainly been a tool for the commercial sector but it has also started to be
considered for residential properties.
It is a similar method to labeling appliances with Energy Star. It wouldn’t directly
require state and local governments to adopt building energy codes but it would help the process
along. It can create healthy competition in the building industry as the label can add more value
to the building. The primary factor that determines the worth of the building is how much
energy it consumes so the label can really make the building more attractive. The buildings with
better energy performance would force those with lower performance to make changes to have a
better image in the public eye and to attract more tenants. The excuse of losing money by
retrofitting can be debated because if they fail to make the effort to make changes, they can lose
business and be forced to lower their price or rent as their only option. This is especially true
today because tenants usually find themselves in a triple-net lease that obligates them to pay for
utility costs so they would want a building that consumes the least amount of energy as possible.
31
The duration of tracking
energy consumption
No Major renovations while data is taken and defining what a
renovation is
Whether or not there is a
tenant occupying the space
Which energy metrics
should be used
How to consider building
operation hours
Weather conditions
Figure 7: Issues that ASTM had to address when developing BEPA
Triple net lease is when the tenants are responsible for three types of payments: property tax,
building insurance, and maintenance or repair costs.37 San Francisco has actually made the
decision to fine $100 per day for those who refuse to comply. 38
Energy disclosure has been gaining popularity in the U.S.39 As more and more states
start to adopt energy disclosure laws, it hopefully will trigger other states, like a domino effect,
to follow in their footsteps because today’s marketplace is becoming more concerned with
energy efficiency. Studies from multiple institutions have shown that buildings rated with higher
energy efficiency are more likely to have more occupants, higher lease rates, and higher sales
prices than buildings with lower energy efficiency.40 This is a great incentive for building owners
who want to be able to compete in the marketplace. Energy disclosure will influence the building
owners to retrofit their building to have higher ratings compared to their competitors. An
obstacle that the proponents of the disclosure law face is the way the energy is measured. It is an
issue that is being addressed and the American Society for Testing and Materials (ASTM) has
come up with a standard for Building Energy Performance Assessment (BEPA). BEPA focuses
on the methodology of collecting energy information because there can be discrepancies on
several things, as it is shown in Figure 7:
37 "Triple Net Lease." Investopedia, n.d. Web. 29 Jul 2011. <http://www.investopedia.com/terms/n/netnetnet.asp>. 38 Bennett, Mark J., and Douglas J. Feichtner. "Incorporating Building Energy Performance and Sustainability Into TraditionalEnvironmental Due Diligence: The Advent of Green Building Due Diligence." Bureau of National Affairs, Inc. (2009): n. pag. Web. 21 Jul 2011. <http://www.dinslaw.com/files/Publication/634a81be-1668-4f62-a5f4-00bcf8e64a45/Presentation/PublicationAttachment/6ed0de1c-bd26-4ab0-941c-0212342e3db9/Bennett%20AA%20disclosure.pdf>. 39 Majersik, Cliff. Personal Interview by Minjoo Lee. 13 July 2011. 40 "Energy Efficiency and Property Value." Energy Rating, Labeling & Disclosure. Institute for Market Transformation, n.d. Web. 24 Jul 2011. <http://www.imt.org/rating-value.html>.
32
It took more than two years for ASTM to develop BEPA with a staff of more than 220
specialists of architects, bankers, engineers, etc. It has been a challenge to create a
benchmarking database that accurately represents the statistics of the different types of
buildings but it has been improving.41
The building energy disclosure would raise awareness and teach the public about the
current technology of buildings and how much money they can save. As more local jurisdictions
start to adopt this law, complaints may arise from those that live in districts that have not
adopted it, putting pressure on their government to take action. It is in everyone’s best interest
to save money. The problem is that governments sometimes do not go above and beyond their
basic responsibilities until they start to get complaints or demands. For instance, the residents
of Kentucky finally complained about their utility bills in 2009 and 2010 because they were
entirely too high and reached a point where they were unable to make payments. The amount of
complaints made to the Kentucky Power Company as well as to the State Representative Leslie
Comb and other legislators grew. The only help that Representative Comb could provide at the
time was to direct those struggling residents to specific agencies that could possibly provide
them with assistance or contact the Public Service Commission (PSC). Attorneys and local
officials requested that the Kentucky PSC deny the high increase in energy bills, which was
eventually authorized for the Kentucky Power Company. According to the communications
manager of Kentucky Power, the reason behind the high energy bills was simply due to increase
in usage. He said, “You pay only for what you use. You pay for what you have already used, not
what you are going to use. So by that token you can control what you use.”42
41 Bennett, Mark J., and Douglas J. Feichtner. "Incorporating Building Energy Performance and Sustainability Into Traditional Environmental Due Diligence: The Advent of Green Building Due Diligence." Bureau of National Affairs, Inc. (2009): n. pag. Web. 21 Jul 2011. <http://www.dinslaw.com/files/Publication/634a81be-1668-4f62-a5f4-00bcf8e64a45/Presentation/PublicationAttachment/6ed0de1c-bd26-4ab0-941c-0212342e3db9/Bennett%20AA%20disclosure.pdf>. 42 Barto, Sally. "Ky. Power says bills are higher because electricity use is up." Mountain Eagle 12 Jan 2011: n. pag. Web. 29 Jul 2011. <http://www.themountaineagle.com/news/2011-01-12/Front_Page/Ky_Power_says_bills_are_higher_because_electricity.html>.
33
Passing the energy disclosure law at the federal level can be difficult to do but a possible
option could be to add it into ARRA. States that receive funds for better energy efficiency are
required to comply with IECC standards or ASHRAE 90.1. Similarly, the Act can require those
that receive funds to also comply with the disclosure law.
Reauthorization of PACE
The Property Assessed Clean Energy (PACE) program was created in 2008 and was a
popular program that was widely accepted across the nation. It was intended to be adopted by
state and local jurisdictions, and encourage building owners – residential and commercial – to
make their buildings more energy efficient and incorporate renewable energy projects. A
jurisdiction that adopted PACE programs would allow the property owners to receive financial
support if they volunteered to retrofit their building using energy efficient equipment or
methods. These methods include but are not limited to better insulation, cool roofs, upgrading
the HVAC system, and installing solar photovoltaic systems.
PACE is unique because it is funded by the jurisdiction in a way that it compensates for
the high upfront cost of retrofitting and the payback is within five to twenty years with a low
interest loan of 3% to 7%. The jurisdiction would lend the money that the property owners
would pay back as a special type of property tax. This debt would not stay with the original
owner that agrees to opt into PACE but it would stay with the property and is passed onto the
next owner. It is a fairly secure method for the lenders because property taxes are always paid
off first as senior liens before other debts and loans, hence PACE debts would be paid off first.43
PACE was adopted by 24 states along with the District of Columbia in the first 24
months. The federal government provided over $150 million in grant money to help state and
local governments with the program. Unfortunately, the program came to a halt when Fannie
43 Frenkil, David John. "After The FHFA Fallout, What Happens Next With PACE Finance?." Solar Industry (2011): 38-39. Web. 24 Jul 2011. <http://issuu.com/zackinpublications/docs/sim1101_online?mode=embed&layout=http://skin.issuu.com/v/light/layout.xml&showFlipBtn=true&pageNumber=38>.
34
Mae and Freddie Mac declined to support any mortgages of buildings that were part of the
program.44 The Federal Housing Finance Agency (FHFA) controls Fannie Mae and Freddie
Mac,45 and was skeptical about the retrofitting initiative. Especially after the financial crisis,
FHFA was very hesitant toward anything involving high risk46. In 2010, the FHFA released a
statement concerning a number of reasons for their skepticism of PACE as shown in Figure 8:
Figure 8: Reasons why FHFA did not support PACE
Their lack of support discouraged many states to back out and quickly give up on the
program. States like California, Florida, and New York expressed their dissatisfaction with
44 "Property Assessed Clean Energy (PACE) Financing: Update on Commercial Programs." Lawrence Berkeley National Laboratory, 23 March 2011. Web. 24 Jul 2011. <http://eetd.lbl.gov/ea/ems/reports/pace-pb-032311.pdf>. 45 Federal National Mortgage Association is known as Fannie Mae and the Federal Home Loan Mortgage Corporation is known as Freddie Mac. Both are public government sponsored enterprises (GSE). FHFA had conservatorship over Freddie Mac and Fannie Mae since September 7, 2008. 46 Starting in 2003, the mortgage crisis worsened as more borrowers turned to private-label securitization. The number of borrowers with poor credit increases, who could not pay their own mortgages. FHFA became the conservator over Fannie Mae and Freddie Mac in order to strengthen the GSEs and for them to avoid bankruptcy.
Not all of the states that adopted PACE required the loans to acquire priority lien over other loans
Compared to most local tax programs, PACE loans are larger and takes longer to pay back
Too risky for lenders and second market entities
Can cause alterations in traditional mortgage lending practice
Lending would be based on collateral rather than ability-to-pay
Would not be a big stimulator behind the campaign for energy conservation
35
Fannie Mae and Freddie Mac, resorting to filing lawsuits against them because they were
making it difficult for the state to continue with PACE.47
PACE was created for both residential and commercial sectors, and both were affected by
the unwillingness of FHFA to participate. Even though Fannie Mae and Freddie Mac’s decision
should have technically only affected the residential buildings, it ended up hurting the progress
of commercial buildings as well. This is due to fear in taking risks. If Fannie Mae and Freddie
Mac didn’t want to support PACE, then why should the rest of the commercial sector want PACE?
No one wanted to be the first one to try something that was unprecedented. When asked about
PACE, Robin Snyder of BCAP thought it was a good concept that could have worked and that the
rejection could have been due to the timing of its proposal. However, this is not to say that PACE
came to a complete halt for commercial buildings. 71 commercial projects have already been
authorized and funded. The total financial support for these projects in the future will involve
private capital in addition to the federal grants.
There are currently four active PACE programs and nine other programs in the design
process. The possible approach to reauthorize PACE and increase the amount of PACE programs
nationwide would be to present it to Congress, starting with only addressing commercial
buildings. Commercial buildings can be easier to tackle because FHFA would not be involved
and if the majority of states were originally willing to participate, then it should be easier to pass
in Congress. Congress should note that there is a good amount of support from lenders to
consent to PACE and the loan-to-value (LTV) ratios are low enough to show that PACE is a low
risk. Many local, regional, and national lenders have been providing mortgages and the LTV
ratio has been around 1:10.48 After time, the states and local jurisdictions can report back to
47 Frenkil, David John. "After The FHFA Fallout, What Happens Next With PACE Finance?." Solar Industry (2011): 38-39. Web. 24 Jul 2011. <http://issuu.com/zackinpublications/docs/sim1101_online?mode=embed&layout=http://skin.issuu.com/v/light/layout.xml&showFlipBtn=true&pageNumber=38>. 48 "Property Assessed Clean Energy (PACE) Financing: Update on Commercial Programs." Lawrence Berkeley National Laboratory, 23 March 2011. Web. 24 Jul 2011. <http://eetd.lbl.gov/ea/ems/reports/pace-pb-032311.pdf>.
36
Congress and give an assessment of how PACE has – or has not – helped improve the energy
efficiency of buildings that cooperated. If the report shows positive feedback, PACE could be
revised to include residential buildings and FHFA would have a harder time resisting.
It is a relatively safe program that makes it easier for building owners to pay back the
loan that stays with the property. The FHFA does not have the power to order the public what to
do but the reason why it had an impact and disabled many of the PACE programs was because
their lack of willingness to cooperate persuaded people to believe it was unsafe and risky.
Structure of Training for Code Officials
All local jurisdictions should require their code officials to go through similarly
structured training so they can interpret code language and understand how to verify that a
building follows those codes. The training for code officials varies from jurisdiction to
jurisdiction but if they were more similar, it would be easier to observe where some of the
problems lie and what needs to be altered to optimize the training across the nation. The
training can consist of a few steps. Before receiving any certification to work as an official, they
should receive education in a classroom from experienced code officials, engineers, and
architects. After an adequate amount of time, they should have a mentor to show them how they
can use what they have learned in the classroom and apply it on-site. When the mentor thinks
the student is ready and passes multiple tests, certification should be given to the official in
training. While working, the code officials should continue to receive on-line training and some
in class education every year. It is important to have retraining especially during the period
between the updated versions of standards and codes.
The structure of the training itself should depend on the local jurisdiction but a way that
the federal government can help is providing financial assistance to those with less resources. If
the local governments choose to make changes in their training programs, the federal
government can revise ARRA to make sure part of the funding the states receive goes to training.
37
Breaking down the job into multiple areas would create more employment opportunities and
allow each specialized code official to be more meticulous with his or her inspection, avoiding
the issue of neglect. The assessments would be more accurate because more data would be taken
and the total time of the inspection may be reduced because different parts of the building
would be analyzed simultaneously and each official would only have to focus on one thing. Each
jurisdiction should require and confirm it has a sufficient number of code officials.
More Regulatory Authority
As mentioned earlier in the report, states that fail to comply with energy standards are
not reprimanded harshly and there are no real consequences. Part of the problem is that the U.S.
Department of Energy (DOE) does not have the authority to regulate.49 If Congress can give
them the power to do so, this could drastically change. This solution would definitely help the
compliance aspect of standards. Adopting standards into codes is meaningless on paper without
enforcement and compliance. The states that agreed to receive funds to improve energy
efficiency and use renewable energy after ARRA was passed should be checked by a committee
in the DOE to ensure the financial support is being provided for the right purpose. If the cost of
sending on-site committee members is an issue, the DOE can pick random samples across the
nation to perform annual assessments. However, all the states should be notified about the
possibility of committees coming their way in order to give them the incentive to continue to
appropriately use federal funds. If the DOE is not satisfied with what they see, they should be
given the power to suspend the funds. The difficulty with this alternative is that there may not be
enough manpower currently to send the DOE members to the states.
States may not be satisfied with this change by claiming that it is unconstitutional and
that the federal government would be given too much authority, especially with the current
political climate. However, these code officials of DOE would only be responsible for verifying
49 Snyder, Robin. Personal Interview by Minjoo Lee. 6 July 2011.
38
the states that already agreed to adopt ASHRAE 90.1 and receive financial support from the
federal government. If those states are willing to accept the money to be able to adopt and
enforce the energy codes, then the federal government has every right to audit. The DOE should
have a committee that is responsible for physically going to the states. By having the regulation,
the states would be more inclined to use the funds more appropriately.
Educational Outreach
Not all stakeholders are aware of the need to implement building energy codes so a key
step is to raise awareness through education. Stakeholders who can make a difference in
adoption, enforcement, and compliance of energy codes are not restricted to just policymakers
but includes consumers and professionals of the building industries. More educational outreach
at universities and communities in general would help raise awareness, which in turn would
help raise the level of compliance. An approach as simple as holding a brief voluntary meeting
for each community can be effective. Building performance depends on who operates it and how
they operate it. Standards and codes are only as good as how closely they are complied with. The
measure of the ideal performance is carried out by code officials but the actual performance
itself is dependent on the users. Therefore educating the general public on what standards and
codes their jurisdiction adopted and how they can comply is just as important.
39
Recommendations
Even though it may seem like focusing on energy conservation and energy efficiency
should be an important issue to be addressed, it is secondary when it comes down to buildings.
There is no real urgency in promoting building energy codes and the priority is to make sure the
buildings are constructed properly for safety. It is not an issue that the public has really
vocalized. Because it is hard to make preemptive policies for energy efficiency and enact them
currently, the legislators should be ready with policies for when the issue becomes serious in the
future.
Building codes concerning energy efficiency can be considered to be of importance for
only the building industries. However, policymakers can help make progress by stepping in and
encourage making positive changes to the current lack of interest in standards. If the public does
not know the importance of following standards, policies must be updated or developed to bring
the issue to their attention and alert them of one of the most cost-effective ways of improving
energy efficiency of buildings. When it becomes a requirement for all states to have energy
efficiency codes, it not only pushes building owners to be more aware about their energy use and
lower their utility bills but it can also cause the state’s economy to grow. More jobs will be
created for electricians, engineers, energy monitors and auditors, and retro-commissioning
professionals.50 It is true that all buildings will perform differently because the occupants will
use them differently. Even two buildings that are originally designed identically the same will
not consume the same amount of energy. Dru Crawley of Bentley Systems frequently uses this
quote by Stewart Brand at the beginning of his presentations: “Every building is a forecast.
Every forecast is wrong.” But to increase the chances of improving energy efficiency, standards
need to be set to be followed. Standards help make buildings more consistent in terms of energy
efficiency and make it easier for understanding how to meet the minimum energy requirement.
50 Hurley, Amanda Kolson, and Andrew Burr. "Building Energy Disclosure Laws Push Companies to Hire Small Businesses: Staffing Up as Energy Benchmarking and Disclosure Rules Spur Demand for Energy Efficiency." Sustainable Real Estate Solutions, 10 July 2011. Web. 24 Jul 2011.
40
1. Targeting commercial buildings
Development of Standards and Codes
2. Data collection
3. Standards focused on simple methods to reduce energy consumption
Adoption
4. National building code
5. Energy disclosure laws
Enforcement and Compliance
6. Revising PACE for commercial buildings
7. Consistent training for code officials
All of the previously stated alternatives to address the problem of adoption, enforcement,
and compliance of codes should all technically be done to make progress. However, some of
them can be more difficult to achieve at the moment because they can be harder to gain support
from majority of the key stakeholders. Figure 9 presents the seven main areas that will be
recommended in this report:
1. Targeting commercial buildings
Because building energy codes are not at the top of the priorities list for policymakers,
looking at short term goals and solutions that will benefit the general public, regardless of
political stance, should be implemented first. While the ultimate goal is achieving the highest
energy efficiency of all buildings, it cannot be approached in one giant step. Instead of tackling
the whole problem at once, it should be broken down. Targeting commercial buildings would be
easier because it is more leveraged and businesses can afford to be involved. There are more
people in the professional staff working on the projects. Professional architects and engineers of
Figure 9: Outline of policy recommendations in this report for implementing energy standards and codes to raise energy efficiency
41
the commercial sector would be more willing to follow codes given their backgrounds compared
to those of the residential sector.
2. Data collection
In order to have codes that will effectively improve energy efficiency, surveys like CBECS
are needed for data collection to set the minimum benchmarks. The main problem with
resuming CBECS operation is of course the funds. However, CBECS is relatively an inexpensive
program that requires only $4 million and the money can be raised if all of the policymakers
were more aware of its importance and the attention it deserves. Not all legislators are even
familiar with the program but once they are, they will realize that CBECS is necessary to get the
most recent statistics and data to improve energy efficiency. Standards cannot be updated
without information of how all buildings are currently performing across the nation.
3. Standards focused on simple methods to reduce energy consumption
Instead of looking to change every aspect of the building, the focus should be narrowed
down specifically to target the biggest energy hogs and to make a big leap in reducing the energy
consumption. Standards focused on lighting, and heating and cooling systems would be very
effective in conserving energy. Lighting is the culprit of 25%-50% of total energy use of most
commercial buildings and heating is responsible for 33%-50%. A method as simple as
constructing the building in the right orientation to get the maximum amount of light into the
building can be helpful. For instance, the shape of the building can maximize daylighting if it is
long and narrow, which does not involve installation of the newest lighting equipment.
Daylighting can help energy savings of commercial buildings by 30%-80% annually. Using
different kinds of light bulbs such as halogen, and installing automatic light sensors and
dimmable lights can also make a difference and they tend to receive positive feedback from the
users.
Effective heating and cooling systems are good areas for standards to address and be
implemented as codes to make noticeable changes. Better insulation systems in walls, ceilings,
42
basement, and windows will help minimize heat loss from the building, which would reduce the
amount of wasted energy spent on producing heat in the winter. Windows, depending on the
number of layers, gas between the layers, and the glazing, can help reduce energy consumption.
Glass has very low thermal resistance so windows need to be well insulated. Adding another
layer of glass on windows of existing buildings is not too complicated to do because the spacing
between the layers can be as small as 0.15 mm, making it possible to create a small space of
vacuum in between. Creating a vacuum between the layers or using gases with higher molecular
weight, such as argon, can help reduce heat transfer. It would especially be effective to focus on
heating and cooling for commercial buildings because they use both systems simultaneously
throughout the entire year – air conditioning is needed to counteract the overheating from
lighting and office equipments while heating is needed for the amount of heat loss during the
winter.51
It can be overwhelming to fix every element of the building for better energy efficiency so
narrowing the job down to one or two goals is the smarter approach. Of course, there should be
standards to cover all elements for reference but people should be more aware of the major
building components that should be changed. So standards concerning lighting, heating, and
cooling should be emphasized and updated more as well as be more aware to state and local
jurisdictions to adopt them.
4. National building code
While it is difficult to establish building policies at the federal level because building
related activities are regulated locally, developing a national energy model code would help
maintain consistency across the nation. ASHRAE, ICC, CABO, AIA52, DOE, along with other
organizations of the building industry should collaborate with the members of Congress to
develop a national model energy code that states can choose to adopt and follow if they wish.
51 Harvey, L.D. Danny. Energy & the New Reality 1: Energy Efficiency & the Demand for Energy Services. 1. London: Earthscan, 2010. Print. 52 American Institute of Architects
43
The code would have to be flexible enough to match the different climates due to geographic
locations of the states and endorse technologies that are cost-effective, such as daylighting. The
push for a single national building code may not be met with a positive response given the
political climate. There have been efforts made in the 1970’s for a national energy code but it
was ineffective because it was overly ambitious in trying to require all buildings to perform in
the same manner, regardless of the difference in climate and location. A good code should not be
a method of “one size fits all.” The national code should not mandate the methods to achieve
higher energy efficiency but it should set a minimum benchmark and mandate what the final
outcome should be. In other words, the language of the code should be more performance based
rather than prescriptive. Given the huge leap in advancement of technology and energy since the
1970’s, it should also be easier to develop an effective national model energy code that can be
complied with. As more and more states start to be more aware in the importance of raising
energy efficiency by adopting and complying with energy codes, the process of legalizing the
national energy model code should gain support.
The effort behind the national code needs to be bipartisan by design in order to prove
that energy policy involving energy efficiency should be in the best interest of both parties that
would benefit all people. A collaborative, joint effort can really be a catalyst to quicken the
process along. The Waxman-Markey Bill of 2009 included having a national building energy
code. It was unfortunately not passed by the Senate after it was passed by the House of
Representatives. It could have been perceived as overly ambitious because it stated that there
should be a 50% reduction in energy consumption by 2014 relative to 2006 IECC or ASHRAE
90.1-2004. To be realistically achievable and feasible, a single target percentage reduction for all
buildings should not be required. Instead, there should be tax incentives or deductions relative
to how much the building has improved in performance from its previous years. This approach
would be more rewarding and encouraging to continue the efforts in reducing energy because
when a target percentage is not reached, it can be discouraging for building owners to continue
44
retrofitting. This way, each building owner or building industry set a personal goal for
themselves rather than a goal set by someone else. The percentage reduction in energy
consumption from one year to the next should be the focus because every building performs
differently. A building should compare its performance to its own past performance rather than
another building.
5. Energy disclosure laws
Energy disclosure laws have already started to take place in the country and have showed
positive results in increasing the number of jobs in energy efficiency services. In New York City,
their benchmarking and disclosure law that will officially be enacted in August has helped create
more jobs in a sustainability services firm and have attracted more clients by about 400 over a
the last twelve months, a relatively short period of time. Publicly disclosing information about
how much energy the building consumes will make the public more conscious about it and make
changes to do better. It can stimulate the economy, as it is shown in places like New York, by
creating more jobs and adding value to the properties.53 It could be a catalyst for adopting
standards into codes for states.
6. Revising PACE for commercial buildings
PACE should be reauthorized and supported by the federal government in terms of
encouraging states to implement the program. Lawsuits have been filed to require mortgage
lenders to treat PACE loans just like any other loan as well and Congress has been involved to
give support.54 A newer version of PACE should only address commercial until FHFA and
homeowners feel more comfortable after observing the commercial sector. All states that choose
to adopt PACE programs should make the loans priority liens over other mortgages and shorten
53 Hurley, Amanda Kolson, and Andrew Burr. "Building Energy Disclosure Laws Push Companies to Hire Small Businesses: Staffing Up as Energy Benchmarking and Disclosure Rules Spur Demand for Energy Efficiency." Sustainable Real Estate Solutions, 10 July 2011. Web. 24 Jul 2011. 54 "The Fight to Restore PACE." PACENow. PACENow, n.d. Web. 28 Jul 2011. <http://pacenow.org/blog/>.
45
the period of payback. 55 PACE can be revised to be even safer by making sure the assessments
do not exceed 10% of the property value or making sure that the property owners have a good
record of making timely payments.56 Even today, PACE programs for commercial buildings exist
in certain areas like California. PACE avoids high upfront costs, can create local jobs, and
increases the value of the property. Figure 10 shows that the average price of an environmentally
certified building is higher than that of non-certified buildings.
While it is true that environmentally certified does not mean energy efficient, it shows that
people are more willing to pay a higher price for buildings that are nonconventional and utilize
technology – they recognize that the property is worth more. It is up to the state and local
governments to provide support and encourage it. Reauthorizing PACE would raise awareness
in the importance of energy efficiency and help implement energy standards and codes.
7. Consistent structure of training for code officials
It is just as important – if not more so – to check for compliance. Training needs to be
more consistent between jurisdictions. Local jurisdictions should require their code officials to
attend workshops, conferences, and hearings held by organizations like ASHRAE and ICC,
55 These slight adjustments address the concerns that FHFA originally had with PACE. 56 "About PACE." PACENow. PACENow, n.d. Web. 28 Jul 2011. <http://pacenow.org/blog/about-pace/>.
Figure 10: Sales of environmentally certified vs. non-certified homes
46
In-class education by experienced code
official, engineer, and architect
On-site mentorship Written exams
Annual retraining with workshops provided by
organizations like ASHRAE and ICC
especially if they have adopted ASHRAE standards or ICC codes. Local jurisdictions can
implement a similar training process that is presented in Figure 11:
This model is not intended to be followed in exactly the same way. Adjustments can be
made but the overall structure of the training should be similar. When the structure of the
training is similar across the country, it becomes easier for jurisdictions to figure out what
training methods work or what methods do not work. Communication between jurisdictions can
become more widespread in search of better ways to make changes in the training, whether it is
the duration of the training period, the content of what is being taught, or the educators
themselves. When there is consistency, it improves the overall effectiveness of training across
the country.
Figure 11: Recommended structure of training for code officials
47
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