NJCEP Program Review Template RNC 2-4-15 FINAL · The NJ RNC program currently offers performance-based incentives for each tier for Tiers 1, 2, and 3. The Multifamily High Rise component

1

Program Planning Committee: Program Review TemplateProgram Planning Committee: Program Review TemplateProgram Planning Committee: Program Review TemplateProgram Planning Committee: Program Review Template

Program Name:Program Name:Program Name:Program Name: Residential New Construction Residential New Construction Residential New Construction Residential New Construction

1.1.1.1. PPPPROGRAM ROGRAM ROGRAM ROGRAM DDDDESCRIPTIONESCRIPTIONESCRIPTIONESCRIPTION

The NJ Clean Energy Program’s Residential New Construction (RNC) Program is designed to increase the

energy efficiency and performance of residential new construction in New Jersey. The RNC Program has

the long-term objective of transforming the market to one in which a majority of residential new

construction in the state is “net zero-energy,” i.e., extremely efficient buildings whose low energy needs

can be met by renewable energy generation.

The RNC Program is market based and relies on builders and raters to build to and utilize national

platforms including the ENERGY STAR Certified New Homes Program, the ENERGY STAR Multifamily

High- Rise Program, and the Department of Energy Zero Energy Ready Home, which are defined by core

efficiency measures, energy modeling, rater and builder oversight and check lists to ensure quality

installation. While the national programs provide general guidelines, NJ currently uses the platforms to

create “tiers” in order to accommodate the NJ market and baseline construction practices in the state.

The current program structure covers four types of homes: single family, multi-single (townhouse),

multifamily up to 3 stories, and multifamily for buildings of 4 to 6 stories (through the Multifamily High-

rise category).

NJ ENERGYEfficient Home (Tier 1) - Tier 1 uses the ENERGY STAR v 2.0 framework and encourages new

builders to participate in the Program. These homes save approximately 15% energy over code, which is

currently IECC 2009. While these homes will not be ENERGY STAR qualified, they will allow builders to

gain the skills to fully transition to full ENERGY STAR implementation. These homes carry the NJ

ENERGYEfficient Home label. The incentive structure within this tier is performance based with higher

incentives for higher performance using the HERS index as the metric.

ENERGY STAR Homes (Tier 2) - Builders that enroll in Tier 2 satisfy the full check list requirements of

Version 3 and are ENERGY STAR qualified. These homes save approximately 20% energy over code and

ensure builders follow best practices in the field by requiring quality check lists. The incentive structure

within this tier is performance based with higher incentives for higher performance using the HERS index

as the indicator.

Zero Energy Ready Home (Tier 3) – The current program includes all of Tier 2 requirements plus DOE

ZERH requirements to achieve approximately 50% reduction in energy use compared to IECC 2009,

before the addition of on-site renewable energy generation. The incentive structure for Tier 3 rewards

higher performance through a sliding scale based on HERS index. In 2014, this tier was transitioned from

a pilot program with NJCEP home energy raters to an open rater system relying on same market-based

network as Tier 1 and Tier 2.

2

ENERGY STAR Multifamily High Rise Program - Multifamily buildings at 4 to 6 floors are eligible for the

ENERGY STAR Multifamily High-Rise program1. These buildings achieve at least 15% better than code,

which is currently ASHRAE 90.1 2007. The current incentive structure within this program is set at

$1,000 per qualifying unit.

2.2.2.2. PPPPROGRAM ROGRAM ROGRAM ROGRAM GGGGOALS AND OALS AND OALS AND OALS AND OOOOBJECTIVESBJECTIVESBJECTIVESBJECTIVES

The RNC Program currently has multiple goals and objectives which focus on market transformation and

driving demand. In FY 2015, the program expects approximately 5,000 new units to enroll in the

program, saving 7,800 MWH and 88,000 DTh. The program also tracks units that are carried forward;

not all units that enroll are completed in the same program year.

There are a number of market barriers to efficiency investments in new construction in New Jersey that

will remain a focus in upcoming years. Key among these are:

• A slow return from the economic downturn on the housing market. According to the census

bureau, in 2005 approximately 38,000 housing units applied for permits. In 2009 there were

only 12,000 permits and in 2013, the most recent year the data is available, there were about

25,000 permits. The upward trend is encouraging but market actors are still hesitant and very

concerned with bottom line which can limit investment in efficiency.

• According to the census data, multifamily units surpassed single family units from the first time

in 2013. Multifamily units are sold as condos or are built by developers to rent. Multifamily

rental units present a unique barrier of split incentive where often the tenant pays the utility

bills and investing in efficiency does not benefit building owners.

• Builders do not always value or know how to articulate the benefits of the additional

administrative procedures of ENERGY STAR, especially where the upgrade requirements are not

linked specifically to energy savings.

• Limited technical skills of some builders and their subcontractors is a barrier to achieving the

efficiency levels required to achieve zero energy ready homes.

• Lack of information regarding the benefits of efficiency and environmental performance on the

part of consumers, builders, lenders, appraisers, realtors and others prevents the ability to

differentiate between efficient and standard homes.

The RNC program employs several strategies to overcome these barriers including:

• Direct incentives to builders of homes that meet program standards;

• Multiple pathways that allows participation across efficiency levels, entices new builders to the

program, and promotes increased efficiency and quality-assurance with higher incentives;

• Marketing assistance to builders to promote the energy and environmental benefits of NJ

ENERGY STAR Homes participating projects;

1 Multifamily decision tree has detailed steps to determine if multifamily is low-rise or high-rise

http://www.energystar.gov/ia/partners/bldrs_lenders_raters/downloads/mfhr/MFHR_Flowchart_v1.1.pdf?47e2-e4c9

3

• Providing technical assistance to inform builders and their subcontractors on details of the

program and how to comply with the rigorous performance requirements; and

• ENERGY STAR and DOE Zero Energy Ready Home certification, inspections and testing through

third-party rating companies, competing in an open market for services.

For FY2016 the Market Manager Team would like to focus on additional goals and objectives which

include:

• To the extent possible, develop streamlined application and reporting procedures for builders

and raters with a focus on multifamily units

• Move away from the strategy that the rating companies are in the best position to advise and

market the program. Instead have the program become a trusted advisor and technical expert

that the builders can consult when faced with unique or challenging configurations during

construction

• Prepare the builder and rater community for stringent new construction code standards that

will be adopted by NJ over the course of the next few years

• Reduce incentives where needed to align with incremental costs and improve program cost

efficiency

• Retake the leading role in marketing to buildersby increasing outreach and program staff

interaction with builders and raters

• Conduct rater and builder education on program QA/QC field procedures to ensure standards

are being met in the field

• Educate home buyers on benefits of efficiency and work with realtor community to give them

the tools to sell efficiency

3.3.3.3. HHHHISTORIC ISTORIC ISTORIC ISTORIC PPPPROGRAM ROGRAM ROGRAM ROGRAM RRRRESULTSESULTSESULTSESULTS

Since 2010, over 17,500 units have participated in the RNC Program and savings total 450,000 MWh and

18,000,000 Dth over the 20 year calculated life of each home.2 These homes will likely last five times

that long, increasing the actual impact of the RNC program dramatically. When it comes to building a

new house, integrating efficiency during design and construction is the least cost option, making RNC an

important program to minimize lost opportunities. On average, the program saves about 1,100 kWh and

160 therms per unit. Actual results will vary depending on unit type (single family, multi-single or

multifamily) and size. For homeowners, an ENERGY STAR home saves about $350 a year on energy bills. 3

As we are all well aware, the new homes market was severely impacted by the housing downturn.

Figure 1 shows the number of permits requested in NJ from 2002-2013, which peak in 2004 and sharply

decline to 2009. Since 2011, we see a rebound, in particular with multifamily housing which for the first

time surpasses single family during this period.4

2 Data sourced from program results– “2010-FY14 Historical_NJCEP_Savings_Data 9-2-14.xls”, “2010-FY14 Historical

Participants 9-2-14.xls” and “ 2010-FY14 $-KWh_Saved-All_Yrs_byPrgm_2014-09-19.xls” 3 Utility rates from Department of Labor http://www.bls.gov/regions/new-york-new-jersey/news-

release/averageenergyprices_newyorkarea.htm 4 Converting permits to completions is approximately a 4% decrease. http://www.census.gov/construction/bps/

4

It is interesting to note that RNC Program participation does not mirror the housing rebound in 2012.

Between 2012 and 2014 there is a continued decline in RNC participation.5 During this time frame,

ENERGY STAR Homes and subsequently the NJ RNC program did introduce new, more stringent

standards. Also, the program transitioned to an open rater marketplace. As mentioned before, a barrier

to the RNC Program is the split incentive where builders who make design and procurement decisions

do not pay the homeowner operating costs associated with those decisions as well as builder ability to

5 “2010-FY14 Historical Participants 9-2-14.xls”

5

articulate the value of efficiency in a marketplace where home buyers are unable to see insulation

improvements but can touch and feel granite countertops and stainless steel appliances.

The historic participation in the program has been dominated by the multifamily sector with single

family representing about 30% of the participation. The remaining 70% of participants is split between

multi-single, multifamily, and multifamily high rise. These results are shown in Figure 3.

6

The average rebate by program tier is shown in Figure 4. This shows that the average Tier 1 incentive is

approximately $1200, Tier 2 $2500 and Tier 3 $5500. Multifamily high-rise is a fixed $1000 incentive.

7

4.4.4.4. RRRRESULTSESULTSESULTSESULTS OF OF OF OF BBBBENEFITENEFITENEFITENEFIT/C/C/C/COST OST OST OST AAAANALYSISNALYSISNALYSISNALYSIS

Table 1 presents the cost-benefit analysis results for the RNC program for FY2015 and FY2016. The

analysis for FY2015 is draft and was provided by Rutgers and make use of a 7% discount rate. Given that

the changes proposed here will result in increased savings at lower costs, the FY2016 results will be

more cost-effective than FY2015.

Table 1. Cost-Benefit Analysis for FY2015 and FY2016

FY2015 FY2016 Proposal

Lifetime Net Benefits -

Total Resource Cost Test ($870,953) $3,107,078

8

Benefits-Cost Ratio 0.9 1.4

Lifetime Net Benefits -

Societal Cost Test $1,899,062 $6,829,155

Benefits-Cost Ratio 1.2 1.8

5.5.5.5. CCCCOMPARISON TO OTHER POMPARISON TO OTHER POMPARISON TO OTHER POMPARISON TO OTHER PROGRAMSROGRAMSROGRAMSROGRAMS

5.15.15.15.1 Incentive levelsIncentive levelsIncentive levelsIncentive levels

The NJ RNC program currently offers performance-based incentives for each tier for Tiers 1, 2, and 3.

The Multifamily High Rise component of the program has a fixed incentive after a performance

threshold is met. Because of the progressive incentive structure with increased incentives based on

energy savings, as well as the type of unit (single family, multi-single and multifamily), it is difficult to

make direct program comparisons.

The approach taken by the Market Manager Team is first to review the specific tiers and available

incremental cost data. Incentives targeting approximate 50% of incremental cost are generally thought

to be adequate to motivate the market and also bring builders a return on investment within an

acceptable time frame. The second review is to consider incentives as average per unit to understand

how NJ compares to other programs.

NJ ENERGYEfficient Home (Tier 1) – This tier supports the long term transition to ENERGY STAR Version

3 by providing waivers for some of the inspection checklist requirements. The incentives for Tier 1 are

shown in Table 2. Multi-single units receive 75% and multifamily units receive 50% of the single family

unit incentive.

Table 2: Tier 1 Incentives

Tier 1 - NJ ENERGYEfficient Home

HERS Single

Family

(SF)

Multi-single

(MS)

Low Rise

Multifamily

(MF)

75 $1,250 $938 $625

70 $1,500 $1,125 $750

65 $1,750 $1,313 $875

60 $2,000 $1,500 $1,000

55 $2,250 $1,688 $1,125

50 $2,500 $1,875 $1,250

Average incremental cost for single family minimum compliance with Tier 1 (HERS 75) is estimated at

9

$1300.6 The current incentive structure provides 100% of the estimated incremental cost.

ENERGY STAR Homes (Tier 2) - Builders that enroll in Tier 2 satisfy the full check list requirements of

Version 3 and will be ENERGY STAR qualified. The incentives for Tier 2 are shown in Table 3. Multi-single

units receive 75% and multifamily units receive 50% of the single family unit incentive.


Tier 2 - NJ ENERGY STAR Home

HERS Single

Family

(SF)

Multi-

single (MS)

Low Rise

Multifamily

(MF)

75 $2,250 $1,688 $1,125

70 $2,500 $1,875 $1,250

65 $2,750 $2,063 $1,375

60 $3,000 $2,250 $1,500

55 $3,250 $2,438 $1,625

50 $3,500 $2,625 $1,750


$2300.7 The current incentive structure provides 100% of the estimated incremental cost.

Zero Energy Ready Home (Tier 3) - Current program includes all DOE ZERH requirements, plus 50% on-

site renewable energy generation. The incentives for Tier 3 are shown in Table 4.


Tier 3 - Zero Energy Ready Home

HERS Single

Family

(SF)

Multi-

single

(MS)

Low Rise

Multifamily

(MF)

50 $10,000 $7,000 $4,000

45 $14,000 $9,500 $6,000

40 $18,000 $12,000 $8,000

35 $22,000 $14,500 $10,000

30 $26,000 $17,000 $12,000

25 $26,000 $17,000 $12,000

6 Incremental Cost using national average costs for ENERGY STAR V3.0 compliance with Rx requirements only (no checklists)

approximately equivalent to ES v 2.0 Source ES – include link

7 Incremental Cost using national average costs for ENERGY STAR V3.0 compliance with checklists– include link

10

20 $26,000 $17,000 $12,000

15 $26,000 $17,000 $12,000

10 $26,000 $17,000 $12,000

5 $26,000 $17,000 $12,000

0 $26,000 $17,000 $12,000


$15,000.8 The current incentive structure provides approximately 65% of incremental cost.

Multifamily High Rise - Multifamily buildings at 4 to 6 floors are eligible for ENERGY STAR Multifamily

High-Rise program. The current incentive structure within this program is set at $1,000 per qualifying

unit.

Table 5: Multifamily High Rise Incentive

Multifamily High Rise

Incentive per unit $ 1,000

Average incremental cost for minimum compliance with MFHR (15% better than code) is estimated at

$390.9 The current incentive structure provides approximately 250% of incremental cost.

Program Comparison - Average per unit

Data from the draft ERS Benchmarking Study is provided below, which compares the NJ $/kWh to other

national RNC programs. ERS concluded:

• Program $/kWh and kWh/participant were poor in 2012, but 2011 was right at the median

• Incentives are higher than the comparison programs

8 Incremental cost using NJ Climate Choice Homes Final Report. Incremental cost analysis by Rutgers

9 Personal communication with Ted Leopkey 6/30/14Average incremental cost in NY from sample of 44 MFHR buildings.

11

Figure 5: Data from ERS Benchmarking Study

The Market Manager Team concludes that there is sufficient evidence to consider reducing RNC

program incentives based on incremental cost estimates and ERS baseline comparisons.

5.25.25.25.2 Program RProgram RProgram RProgram Requirementsequirementsequirementsequirements

Each tier has specific performance and prescriptive requirements as listed below.

NJ ENERGYEfficient Home (Tier 1) - Tier 1 uses the ENERGY STAR v 2.0 framework.10 To qualify for this

tier a unit must comply with Performance Path of ENERGY STAR v2.0 requirements, including:

• REM/Rate Model which calculates HERS index

• Comply with v2.0 Thermal Bypass Check list

• Duct leakage to outside: ≤ 6 CFM25 per 100ft2 CFA (No maximum total leakage. CFM25 is

defined as the air flow (in cubic feet per minute) needed to create a 25 Pascal pressure change

in the ductwork. CFM25 is one of the most basic measurements of ductwork air tightness.)

• Up to 25% of Slab edge in CZ 4 & 5 may be un-insulated.

Additional New Jersey requirements:

• HERS index must not exceed 75 (2009 IECC base)

• Comply with NJ program specific HVAC check list

10 Detailed program requirements for ENERGY STAR Version 2.0 are found at

https://www.energystar.gov/index.cfm?c=new_homes.hm_index

12

• Fully duct all HVAC supplies and returns and fully seal all duct system joints and seams with

mastic compound (no tapes) as applicable Install ENERGY STAR qualified HVAC equipment (or

highest available alternative)

• Install ENERGY STAR qualified mechanical ventilation with automatic 24-hour control, as

required by ASHRAE 62.2 as applicable

• Install only direct or power vented space heating, water heating and/or fireplace combustion

appliances, when present

• ENERGY STAR lighting: 60% of all light sockets including interior and exterior, or EPA Advanced

Lighting Package (ALP) for fixtures

• House size capped at ≤ 4000 sq. ft. Over 4000 sq. ft. requires ≤ HERS 65

ENERGY STAR Homes (Tier 2) - Builders that enroll in Tier 2 must meet all the EPA ENERGY STAR Homes

v 3 Performance Path standards including.11

• REM/Rate Model which calculates HERS index

• Meet a site specific (variable) HERS index target

• Comply with all EPA mandated checklists

• Install ENERGY STAR qualified HVAC equipment (or highest available alternative)

• Install ENERGY STAR qualified mechanical ventilation with automatic 24-hour control, as

required by ASHRAE 62.2 as applicable

• Install only direct or power vented space heating, water heating and/or fireplace combustion

appliances, when present

• Duct leakage to outside: ≤ 4 CFM25 per 100ft2 CFA

• Total Duct Leakage: ≤ 8 CFM25 per 100ft2 CFA

Additional New Jersey requirement:

• Fully duct all HVAC supplies and returns and fully seal all duct system joints and seams with

mastic compound (no tapes) as applicable

Zero Energy Ready Home (Tier 3) - Current Tier 3 requirements are the DOE ZERH Specification which

include all of the ENERGY STAR V3.0 check lists and requirements as well as improvements in thermal

envelop, appliances and the EPA Indoor Air Plus criteria.

Table 6: Zero Energy Ready Home Requirements

Size Maximum home size is 3,000 square feet

Technical

Standard

DOE Zero Energy Ready Home specification12

- All DOE Zero Energy Ready Home specifications

(DOE ZERH) need to be met minus the Renewable Energy Ready Home (RERH) Checklist13

11 Detailed program requirements for ENERGY STAR Version 3.0 are found at

https://www.energystar.gov/index.cfm?c=new_homes.hm_index 12

http://energy.gov/sites/prod/files/2014/04/f15/doe_zero_energy_ready_home_requirements_rev04.pdf 13

If a solar photovoltaic or solar hot water system is already included with the home, then compliance with the solar

photovoltaic or solar hot water RERH checklist, respectively, is not required

13

HERS Index Maximum 50 points – DOE ZERH specifications alone do not ensure maximum HERS Index of 50

points. Rating providers should model Tier 3 NJ ZERH homes to achieve a target HERS score of 50

points or less

Mechanical

Equipment Install ENERGY STAR qualified HVAC equipment

14

Renewable

Energy

Solar Electric must provide at least 50% of

modeled electricity consumption. Small wind or

hydro may be used with engineering estimate of

available resource.

Solar Thermal or Solar Electric must

provide at least 50% of modeled hot

water energy requirement.15

Lighting

90% ENERGY STAR Qualified Fixtures and/or Bulbs

ENERGY STAR Multifamily High Rise Program - Multifamily buildings 4 to 6 floors can enroll in the

performance path of the ENERGY STAR Multifamily High-Rise program16 and meet the following criteria:

• Used approved software and ENERGY STAR MFHR Simulation Guidelines to verify the building

design meets performance targets of 15% better than ASHREA 90.1 2007

• Comply with ENERGY STAR MFHR Testing & Verification Protocols

• Commit to benchmarking the building in Portfolio Manager for a period of two years

EPA ENERGY STAR Program centrally manages compliance and sends approved documentation and

modeling summaries to the NJ RNC Program. Our primary contact is Rebecca Hudson, ES MFHR program

manager.

5.35.35.35.3 Identify best practicesIdentify best practicesIdentify best practicesIdentify best practices

The best practices identified in Figure 6 were developed by ERS (Energy Resource Solutions) as part of

their draft benchmarking report and compare several leading programs across a range of requirements.

As can be seen in the table, best practices in RNC program design include the following:

Best practice NJ RNC Program

Leveraging national platforms and

brands

• ENERGY STAR New Homes Program

• ENERGY STAR Multifamily High Rise

• DOE ZERH

• RESNET, REMRate HERS index

Optimizing incentive structure to • Progressive incentives for energy savings

14 For equipment types that are not ENERGY STAR certified, install highest efficiency available

15 For natural gas water heaters, modeled therm/yr can be met with PV kWh btu equivalent

16 http://www.energystar.gov/index.cfm?c=bldrs_lenders_raters.nh_multifamily_highrise

14

reward energy savings

Including prescriptive requirement to

ensure specific end uses are using

most efficient equipment

• HVAC minimum requirements

• High efficient appliances

• Lighting

Offer training and education to raters,

builders, homeowners and realtors

• DOE ZERH training

Encourage market • Fully transitioned to open rater structure

Figure 6: Comparison to Other Leading RNC Programs

6.6.6.6. SSSSUMMARY OF INPUT FROMUMMARY OF INPUT FROMUMMARY OF INPUT FROMUMMARY OF INPUT FROM CONTRACTORS AND CUSTCONTRACTORS AND CUSTCONTRACTORS AND CUSTCONTRACTORS AND CUSTOMERSOMERSOMERSOMERS

The program has collected input through multiple channels including NJCEP committee meetings and

interactions with builders and raters to inform program design recommendations.

Table 7: Summary of Comments from Subcommittee

Structure of Tiers Consider a Zero Energy Ready home without a solar requirements

Marketing Make the coop marketing program more effective

Include Homeowner education to drive demand

Program Administration Look for opportunities to reduce cost to the program

Improve the application process for builders or raters, perhaps by

registering projects as a batch rather than one home at a time

Explore having rebates paid faster, sometimes builders wait 3-4 months

for payment

15

7.7.7.7. CCCCODES AND ODES AND ODES AND ODES AND SSSSTANDARDS TANDARDS TANDARDS TANDARDS IIIIMPACTS ON MPACTS ON MPACTS ON MPACTS ON PPPPROGRAMROGRAMROGRAMROGRAM

Building energy codes set a minimum efficiency level for new construction. The residential energy code

is currently 2009 New Jersey Uniform Construction Code, based on 2009 IECC, and the commercial new

construction code is 2009 New Jersey Uniform Construction Code, based on 2009 IECC and ASHRAE

90.1-2007. Tiers 1-3 (single family, multi-single and multifamily units) are regulated by the residential

energy code. The Multifamily High Rise Program is considered commercial and regulated by the

commercial energy code. Model codes such as IECC and ASHRAE are updated on a three year cycle then

adopted either wholesale or with modifications by individual states.

Nationally, there is a trend in the new construction industry to set goals to transition all of new buildings

to net zero energy. This requires extremely efficient buildings and the remaining energy needs are met

by renewables. One of the more well-known goals was set by Architecture 2030 challenging the industry

to transition to net zero by 2030.

The energy code cycle and the drive toward net zero are represented in Figure 7. Since 1980, both the

commercial and residential energy code have made substantial gains to require efficient construction.

Actual compliance with energy codes is dependent on code enforcement and other factors including

local builder practices and available construction materials.

Figure 7: History of US Building Codes, 1980-201217

17 Energy Codes for Ultra-Low-Energy Buildings: A Critical Pathway to Zero Net Energy Buildings. ACEEE. Source: Data from U.S.

DOE Building Codes Program

16

Both commercial and residential efficient new construction programs are faced with reduced savings

margins due to increasingly stringent code requirements. The Division of Codes and Standards is a

department within the New Jersey Department of Community Affairs (DCA) and is responsible for

updating the new construction codes. DCA18 indicated they proposed that the State of NJ adopt IECC

2015, and ASHRAE 90.1 2013 (which will apply to multifamily buildings 4 stories and greater) in 2015.

The goal would be that NJ adopts these codes with a June 1st or July 1st start date, and a 6 month grace

period before they would become effective in early 2016.

The program should continue to monitor and support the code adoption cycle as it will impact program

design and savings claims.

8.8.8.8. CCCCHANGING HANGING HANGING HANGING BBBBASELINES ASELINES ASELINES ASELINES IIIIMPACTS ON MPACTS ON MPACTS ON MPACTS ON PPPPROGRAMROGRAMROGRAMROGRAM

The increased code requirements will affect the RNC program in several ways. Builders will be impacted

because the skill sets to build to the code minimum is becoming more difficult and existing builders will

have no choice but to modify existing building practices to advances techniques. The RNC program

needs to provide intensive market support over the next few years to assist contractors to surpass code

so the program can continue to generate energy savings.

The RNC program is different than prescriptive programs because it uses modeling software to claim

custom saving for the thermal envelope upgrades from each unit. The modeling software is

programmed with a NJ-specific baseline to calculate savings. Energy savings from lighting, ventilation

and appliances are prescriptive and are generally aligned with the products program.

Tiers 1-3 Savings Methodology

The RNC program uses REM/Rate software for Tiers 1-3 to calculate savings by comparing the

characteristics of the energy efficient home to the baseline/reference home, called the User Defined

Reference Home (UDRH). The UDRH is a custom input into REMRate and is the baseline against which

the new home is compared to calculate energy savings. The UDRH is described in the Protocols and is

based on IECC 2009. The UDRH will need to be updated when the energy code changes.

To update the UDRH, a baseline study is conducted by gathering a statistically significant sample to

determine the actual “as built” components of NJ homes. This study helps determine what percentage

of the new home market is below, meeting, or exceeding the energy code and where if any components

of the UDRH should be modified from code.

REM/Rate calculates heating, cooling, hot water, lighting, and appliance energy loads, consumption and

costs for new and existing single and multi-family homes. A home energy rating (HERS) is calculated

based on the proposed DOE HERS guidelines (10 CFR 437) as modified by the RESNET/NASEO HERS

Technical Committee. In addition to an energy rating, REM/Rate creates value added information

including energy efficiency mortgage report, energy appraisal addendum, energy code compliance

(MEC, IECC, and ASHRAE), improvement analysis (existing homes), design optimization (new homes),

heating and cooling equipment sizing, utility DSM compliance analysis and ENERGY STAR Home analysis.

Other Impacts

18 Personal communication to Rob Austin Division of Codes and Standards, New Jersey Department of Community Affairs

1/28/15

17

The RNC program is market based and leverages several national protocols. ANSI/RESNET Standard 301-

2014, adopted March 2014, requires modifications to the HERS Reference Home to reflect IECC 2006.

The REM/Rate v15 release, currently expected in 2015, will include ANSI/RESNET Standard changes to

HERS reference home as well as various “bug fixes.” These changes will impact the HERS index on new

homes and may be substantive enough to warrant modifications to the NJ RNC tier and incentive

structures.

9.9.9.9. SSSSUMMARY OF UMMARY OF UMMARY OF UMMARY OF RRRRECOMMENDED ECOMMENDED ECOMMENDED ECOMMENDED PPPPROGRAM ROGRAM ROGRAM ROGRAM MMMMODIFICATIONSODIFICATIONSODIFICATIONSODIFICATIONS

For FY2016, the Market Manager Team would like to focus on additional areas for improvement which

include a long term strategy to support and respond to increasingly stringent codes as well as improve

program performance by increasing participation and yields. A summary of these changes is below.

• Prepare the builder and rater community for stringent new construction code changes that will

be adopted by NJ over the course of the next few years

• Reduce incentives where needed to align with incremental costs and improve program yield

• To the extent possible, develop streamlined application and reporting procedures for builders

and raters with a focus on multifamily units

• Serve as a trusted advisor and technical expert that the builders and raters can consult when

faced with unique or challenging configurations during construction. Adjusting field protocols to

have MM team present at preconstruction meetings

• Improve marketing for builders and outreach by increasing program staff interaction with

builders and raters at trade shows and conferences

• Conduct rater and builder education about program QA/QC field procedures to ensure

standards are being met in the field

% for the higher HERS.

9.19.19.19.1 Proposed RProposed RProposed RProposed Restructuring for Tierestructuring for Tierestructuring for Tierestructuring for Tierssss 1111----3333

While the Market Manager has reviewed a great deal of data from this and other programs, we make

these preliminary recommendations with the understanding that builders, rating companies and other

stakeholders must have greater input into a final recommendation. Given that, the proposed

restructuring for single family, multi-single, and multifamily units creates multiple paths for builder

participation, rewards increased savings and performance, and provides incentives for homes to be DOE

ZERH Certified with or without renewables. This structure will help builders move up the pathway

toward greater energy efficiency and become familiar with new codes, in particular IECC 2015 which

allows for a compliance path similar to HERS called the Energy Rating Index (ERI). While providing

flexibility for builder to determine least cost performance path, IECC 2015 will also require code

inspectors to view certain building components including foundation, framing, roughed in mechanicals,

direct vented equipment in combustion closets, and increased duct insulation. Overall IECC 2015 will

require a significant improvement in efficiency compared to IECC 2009 and the program can help to

prepare the NJ building industry for that level of performance through the NJCEP.

Table 8 below shows the paths and incentive structures currently under development for adoption in

FY2016.

18

19

Table 8: Tier 1-3 Incentive Structure

Equivalen

t Code

HERS

before

Renewabl

e

HERS IECC

2015

ENERGY

STAR V3

DOE ZERH 50% Renewables Max

Incentive

IECC 2009 75

IECC 2012

70

65 $500

$1,000

$500

60 $750 $1,750

IECC 2015

55 $1,000 $1,000 $3,000

50 $2,250 $1,250

$2,000 $3,000

$9,500

45 $3,250 $3,000 $12,250

40 $4,250 $5,000 $15,250

IECC 2018

(estimate

)

35 $5,250 $7,500 $18,750

30 $6,250

$10,00

0 $22,250

25 $7,250

$10,00

0 $23,250

20 $8,250

$10,00

0 $24,250

The new incentive structure is heavily weighted toward lower HERS index and drive up energy saving. It

also reduces the maximum HERS score from 75 to 65, which will increase savings of minimal compliance

homes by approximately 10%. The incentives build from right to left as homes comply with additional

standards such as IECC 2015, ENERGY STAR, DOE Zero Energy Ready Home, and add renewables

systems. If builders choose to ENERGY STAR V3 certification, they will receive an additional $1000

incentive. IECC 2015 which would produce additional savings for NJ as the baseline in the state is still

IECC 2009.

This incentive structure has the following benefits:

Improves Yields – This structure improves program yields by reducing incentives to be more in line

with incremental costs and rewarding better performance. Table 7 above shows single family

incentives. Multi-single would be 75% and multifamily would be 50% of single family incentives. (The

same ratio that is used in the current program). When looking at current incentive structure, a

minimum Tier 1 home can enter at HERS 75 and receive $1250. Under the proposal, the minimum

performance for incentives is HERS 65 and the unit would receive only $500. And at a HERS of 20,

the current program structure would give $26,000 for incentives and the proposed structure would

provide $25,250.

Align HERS with Code Versions – The Market Manager Team would like to incorporate some level of

code compliance into the incentive structure. More research needs to be done to finalize the exact

structures and requirements, but given the complexity of IECC 2015 (with additional prescriptive

requirements) the program can play an important role interacting with code officials and helping to

improve new construction practices statewide.

20

Zero Energy Ready – The current Tier 3 has adopted DOE ZERH standards but requires 50% on site

renewables to receive incentives. Based on input received from raters and builders, this new

structure would allow for a path to earn DOE ZERH home designation where onsite PV is not

feasible. Incentives are slightly decreased, recognizing the significant investments needed to build a

home to this level.

9.29.29.29.2 Proposed Proposed Proposed Proposed IIIIncentive ncentive ncentive ncentive RRRRestestestestructuring for Multifamily High Rructuring for Multifamily High Rructuring for Multifamily High Rructuring for Multifamily High Riseiseiseise

The Multifamily High Rise program currently offers a flat incentive of $1000 per unit. The Market

Manager Team recommends reducing incentives and developing a performance-based incentive

structure to align this component of the program with the others. When looking individually at MFHR

savings relative to baseline, the unit average is about 25% better than code.

Table 9: Multifamily High Rise Incentive Structure

Savings before RE Incentive per unit

15% $ 150

20% $ 200

25% $ 250

30% $ 300

35% $350

40% $400

45% $ 450

50% $ 500

55% $ 550

60% $ 600

65% $650

70% $ 700

9.39.39.39.3 Proposed Increase in Technical Support Offered by the Proposed Increase in Technical Support Offered by the Proposed Increase in Technical Support Offered by the Proposed Increase in Technical Support Offered by the Program Program Program Program

As noted above, the residential new construction industry is approaching a critical transition as NJ looks

to adopt IECC 2015. To support that transition, the program proposes to increase technical and field

outreach, increase training opportunities, and support a BPU/DCA collaboration with code officials

around the state so that the expertise within the NJCEP can be brought to bear and ensure successful

transition to the new code.

9.49.49.49.4 Proposed ImpProposed ImpProposed ImpProposed Improvements inrovements inrovements inrovements in Marketing and OutreachMarketing and OutreachMarketing and OutreachMarketing and Outreach

The Market Manager Team heard during the Homes Subcommittee calls that program marketing needs

to be enhanced in order to drive consumer interest in homes built to these advanced performance

levels. The following approaches are proposed for the FY2016 program:

• Use ENERGY STAR Tools and Resources. Leverage national recognition through DOE and

ENERGY STAR. Program staff will work to encourage and facilitate builder submissions of homes.

21

• Restructure Co-Op Marketing. The current Co-op Marketing program only has one participating

builder and needs to be restructured. A common complaint is the restrictive nature of content

and templates utilized by the program.

• Increase Program Reach. Program staff should retake the lead and strengthen relationships

with developers, raters, and the NJ Housing and Mortgage Finance Agency (which currently

requires ENERGY STAR for projects seeking financing) to increase knowledge of, and

participation in, the program.

• Pilot Direct Marketing. The program should engage in a pilot program to gather data on the

potential benefits of direct marketing to home buyers to make them aware of the benefits of

efficient new homes.

• Engage the Real Estate Industry. We recommend that the NJ RNC Program, in coordination with

HPwES, find ways to work with the real estate industry to include energy efficiency information

in the Multiple Listing Service (MLS) where most homes are listed for sale, and ensure that real

estate agents and appraisers are trained to support buyers and sellers of energy-efficient

homes.

22

AAAAPPENDIX PPENDIX PPENDIX PPENDIX A:A:A:A: DDDDETAILED ETAILED ETAILED ETAILED TTTTECHNICAL ECHNICAL ECHNICAL ECHNICAL RRRREQUIREMENTSEQUIREMENTSEQUIREMENTSEQUIREMENTS OF OF OF OF CCCCURRENT URRENT URRENT URRENT TTTTIERSIERSIERSIERS

DOE Challenge - Zero Energy Ready Homes (Tier 3) NJ ENERGY STAR Homes (Tier 2) NJ Energy Efficient Homes (Tier 1)

Specification

Date: April 21, 2014 ENERGY STAR v3 (Rev. 07) ENERGY STAR v2

Req'd cz4 cz5 cz4 cz5 cz4 cz5

Minimum Requirements

ENERGY STAR

Home

Baseline

All ENERGY STAR v3 ENERGY STAR v3 ENERGY STAR v2

Check List

Requirements

All Thermal Enclosure Rater Checklist Thermal Enclosure Rater Checklist Energy Star V2 Thermal Bypass Checklist

All HVAC Quality Installation Rater Checklist HVAC Quality Installation Rater Checklist

NJ ENERGYEffecint Home HVAC Rater

Checklist

All

HVAC Quality Installation Contractor

Checklist HVAC Quality Installation Contractor Checklist

NJ ENERGYEffecint Home HVAC Contractor

Checklist

All

Water Management System Builder

Checklist Water Management System Builder Checklist -

IAQ

All EPA Indoor AirPLUS n/a n/a

House Size

Pre

scri

pti

ve

Pa

th R

eq

uir

em

en

ts

Rx

Prescriptive path: CFA threshold based on

# bedrooms

Prescriptive path: CFA threshold based on #

bedrooms n/a

Minimum

Technical

Specifications

(ZERH)

Windows

All U-0.32 / SHGC: 0.40 U-0.30 /

SHGC: any U-0.32 / SHGC: 0.40

U-0.30 / SHGC:

any SEE COMMENT

Ceiling

All R-49 R-38 R-38

Walls

All R-20 (or 13+5) R-13 R-20 or 13+5 R-13 R-19 or 13+5

Floor

All R-19 R-30 R-19 R-30 R-19 R-30

Foundation

Wall

All R-10 (cont) / R-13 (cav) R-15 (cont) /

R-19 (cav) R-10 (cont) / R-13 (cav) R-10 (cont) / R-13 (cav)

Slab

(unheated)

All R-10, 2 ft (edge only) R-10, 2 ft (edge only) R-10, 2 ft (edge only);

(up to 25% edge uninsulated)

Slab (heated)

All R-15, 2 ft (edge only) R-15, 2 ft (edge only) R-15, 2 ft (edge only);

(up to 25% edge uninsulated)

Duct Leakage

Requirements

All All ducts within thermal boundary;

Total Leakage: ≤8 CFM25/100sf CFA

Leakage to outdoors ≤4 CFM25/100sf CFA;

Total Leakage: ≤8 CFM25/100sf CFA

Leakage to outdoors ≤ 6 CFM25/100sf CFA;

Total Leakage: No Requirement

23


Specification


Water

Efficiency

All EPA WaterSense Standard n/a n/a

Appliances

All ENERGY STAR ENERGY STAR ENERGY STAR (5 or more)

Refrig

All ENERGY STAR Qualified ENERGY STAR Qualified ENERGY STAR Qualified

Dishwasher

(Standard) All ENERGY STAR Qualified ENERGY STAR Qualified ENERGY STAR Qualified

Dishwasher

(Compact)

All ENERGY STAR Qualified ENERGY STAR Qualified ENERGY STAR Qualified

Clothes

washer

All ENERGY STAR Qualified n/a ENERGY STAR Qualified

Lighting

All ≥80% ENERGY STAR Qualified ≥80% ENERGY STAR Qualified fixtures or bulbs;

ALP may be used for Rx path (60% fixtures)

≥60% ENERGY STAR Qualified fixtures or

bulbs;

or Advanced Lighting Package

Exhaust

ventilation

efficiency

All ENERGY STAR Qualified ENERGY STAR qualified ENERGY STAR qualified

Renewables

All Renewable Ready

(RERH checklist) Not required in NJ n/a n/a

Mechanical

Equipment

Heating

ZE

RH

Ta

rge

t H

om

e S

pe

cifi

cati

on

s

Rx 90 AFUE 94 AFUE

ENERGY STAR Qualified

(or highest available alternative);

95 AFUE (gas); 85 AFUE (oil)



95 AFUE (gas); 85 AFUE (oil)

Cooling Rx 15 SEER 13 SEER



>=14.5 SEER/ >=12 EER



>=14.5 SEER/ >=12 EER

Air Source

Heat Pump Rx 9 HSPF 10 HSPF

ES qualified (or highest available alternative);

8.0 HSPF (single pkg); 8.2 HSPF (split system)

ES qualified (or highest available

alternative);

8.0 HSPF (single pkg); 8.2 HSPF (split

system)

Geothermal Rx ENERGY STAR Qualified


(or highest available alternative)


(or highest available alternative)

Whole house

ventilation Rx

ASHRAE 62.2 (1.4

cfm/W);

no heat recovery

ASHRAE 62.2

(1.2 cfm/W);

heat recovery

ASHRAE 62.2 (24-hour automatic control);

No heat recovery

ASHRAE 62.2 (24-hour automatic control);

No heat recovery

24


Specification


60% SRE

Water Heater Rx ENERGY STAR Qualified; Oil ER 0.60 EF varies dep on system/fuel type EF varies dep on system/fuel type

Envelope

Insulation

grade Rx Grade I Grade I Grade I

Insulation

level Rx IECC 2012 (see above) IECC 2009 (see above) IRC 2004 (see above)

Infiltration Rx ≤2.5 ACH50 ≤2 ACH50 ≤5 ACH50 ≤4 ACH50 ≤6 ACH50 ≤5 ACH50

Windows (U-

Value) Rx 0.30 0.27 U-0.32 U-0.30

SEE COMMENT

Windows

(SHGC) Rx 0.27 any SHGC: 0.40 SHGC: any

U-value

when WFA >

15%

Rx Improved U-Value = [0.15 / WFA] x

[ENERGY STAR U-Value] n/a n/a

Performance

Standards

Maximum

HERS Index Perf

≤ Target Home HERS Index Target

(low-mid 50's) ≤ Target Home HERS Index Target

HERS 85 (IECC06 baseline); HERS 75 (IECC09

baseline); HERS 65 (CFA > 4000 sf)

Energy

Consumption

n/a n/a n/a

25

AAAAPPENDIX PPENDIX PPENDIX PPENDIX B:B:B:B: CCCCODE ODE ODE ODE CCCCOMPARISONSOMPARISONSOMPARISONSOMPARISONS

IECC Code Version Date IECC 2009 IECC 2012 IECC 2015

Climate Zone 4 5 4 5 4 5

Component

Shell

Fenestration (U-Value) 0.35 0.35 0.35 0.32 0.35 0.32

Skylight (U-Value) 0.6 0.6 0.55 0.55

Glazed Fenestration SHGC NR NR 0.4 NR 0.4 NR

Ceiling (R-Value) 38 49 49

Wood Frame Wall (R-Value) 13 20 or 13+5 20 or 13+5 20 or 13+5

Mass Wall (R-Value)1 5/10 13/17 8/13 13/17 8/13 13/7

Floor (R-Value) 19 30 19 30 19 30

BasementWall (R-Value) 10/13 10/13 10/13 15/19 10/13 15/9

Slab R-Value and Depth 10, 2 ft. 10, 2ft. 10, 2 ft.

Crawlspace Wall (R-Value) 10/13 10/13 15/19 10/13 15/19

Air Leakage Test max. 7 ACH 50 or Visual

inspection Test max. 3 ACH 50 Test max. 3 ACH 50

Systems

Programmable Thermostats Required, one for each zone Required, one for each zone Required, one for each zone

Hot Water Boiler Outdoor

Temperature Setback Not Required Not Required Required

Ducts R-8 in attics, R-6 elsewhere R-8 in attics, R-6 elsewhere

Dependent upon duct diameter

and location, R-8 (> 3 " in Dia.)

and R-6 (< 3 " in Dia.), in attics, R-

6 ( > 3 " in Dia.) and R-4.2 (< 3 " in

Dia.)

Duct Leakage (Sealing

mandatory)

To outdoors - 8 CFL/100ft.2

conditionded space, or Total - 12

CFM/100ft.2 conditionded space

Total - 4 CFM/100ft.2

conditionded space

Total - 4 CFM/100ft.2

conditionded space

Duct Leakage (Sealing

mandatory)

Exempt if all ducts are located

within conditioned space





Building Cavity Supply Ducts Not allowed Not allowed Not allowed

26

Mechanical Ventilation Required Required Required

Mechanical System Piping R-3 R-3 R-3

Hot Water Systems Piping Not Required R-3 R-3

Lighting

Lighting (Permanent fixtures) 50% of lamps 75% of lamps 75% of lamps

Performance (HERS Score,

Copied from Neil's Incentive

Structure Recommendation)

75 60 - 70 40 - 55

1 The second R-Value applies when more than half of the insulation is on the interior of the mass wall

2 10/13 means R-10 continuous insulated sheathing on the interior or exterior of the home, or R-19 cavity insulation at the interior of the

basement wall. "10/13" means R-10 continuous insulated sheathing on the interior or exterior of the home, or R-13 cavity insulation at the

interior of the basement wall.

Documents

NJCEP Program Review Template RNC 2-4-15 FINAL · The NJ RNC program currently offers performance-based incentives for each tier for Tiers 1, 2, and 3. The Multifamily High Rise component