Ratcheting Energy Code up to ENERGY STAR:

Ratcheting Residential Energy Code= s up to ENERGY STAR

-- The Long Island Model as an E= xample of What Can Be Achieved --

Richard Fae= sy, Vermont Energy Investment Corporation

March 2, 2007

Introduction

The most cost-effective way to improve the energy effi= ciency of new homes is to raise the energy code.&= nbsp; Instead of making small, incremental improvements with insulation up= grades or specifying some air sealing details—the standard approach to impro= ving codes—some communities are taking big steps and moving all the way to= the ENERGY STAR Homes level, reducing home energy use by 20% or more relative t= o the International Energy Conservation Code.&nb= sp; At the same time, instead of relying on code officials whose primary focus is (and should be) on fire, health and safety issues, energy professionals are being engaged to conduct true performance testing that re= sults in homes that actually achieve = the desired code levels. And all of this = can be accomplished at no cost to tax- or rate-payers; only those home buyers who directly benefit from the more efficient homes pay the cost to get there.

The Long Island = Story

Some interesting code enhancements are taking place on= Long Island. As the New York ENERGY STAR Labeled Homes Program has been ramping up since its introduction on Long Island in= 2005, town officials have noticed and have taken some bold steps. In the towns that host more than h= alf of Long Island’s 4-5,000 new home starts a year, they have passed ordina= nces that will require building to New York’s version of ENERGY STAR Homes standar= ds in April 2008. (These standards include achieving a qualifying home energy rating, putting in efficient lights and appliances tha= t will result in at least 500 annual kWh savings, installing a mechanical ventilat= ion system and passing a combustion safety test.) At the same time, the rest of the = towns on Long Island are considering following suit. And the unusual thing a= bout all of this is that a most unlikely group is leading the charge; the Nation= al Association of Home Builders’ local affiliate, the Long Island Builde= rs Institute (LIBI).

So why is it that the group that traditionally has bee= n the most vocal and active opposition to raising codes is now leading the way on= Long Island? To quote the letter[1] that LIBI’s executive vice president, Bob Wieboldt, sent to the Environmen= tal Protection Agency justifying their actions: “…LIBI endorses the adoption of Residential ENERGY STAR Construction Standards across Long Isla= nd for the following reasons:

&= nbsp; Becoming a supporter of the legislation that was moving ahead with or without homebuilder support, LIBI was able to negotiate a seat at the table= which gave them an opportunity to help craft the ordinance language to take into account some of their concerns (like a later implementation date than had originally been proposed), which would likely not have been considered had = they not become partners with the code sponsors. In addition, LIBI likely also sees revenue and membership opportunities by becoming the local training resourc= e for the Long Island builders and subcontract= ors to teach them what is takes to build to ENERGY STAR.

Code Support Infrastructure

It might sound good on paper to raise the new homes co= de to ENERGY STAR, but can this actually be achieved? Why won’t Long Island just end up like other municipalities that have “raised their codes” yet found that the energy performance of h= omes did not really advance? Long Island is taking an approach that has a much g= reater likelihood of actually achieving the energy savings by moving compliance aw= ay from the building code officials’ responsibilities and into the marketplace [2].

On Long Island, a dozen or more nationally-certified H= ome Energy Rating System (HERS) energy raters will be working with builders to conduct plan reviews, let them know what it will take to achieve the New Yo= rk ENERGY STAR Labeled Homes standards, train their subcontractors on what they will need to do, provide technical assistance during construction, conduct inspections, carry out blower door and duct blaster performance testing of = the home upon completion and then generate the necessary paperwork to document compliance. Officials in the = local building departments have specified the forms they need to see to document compliance. The local utility= , the Long Island Power Authority (LIPA), will provide oversight, tracking and quality assurance monitoring to ensure HERS rater adherence to the national= and New York standards. LIPA will continue= to support these and other beyond-code efforts through their mandate to transf= orm their markets to become more energy efficient.

While building code officials may still conduct some o= f the insulation or other energy-related inspections, they will undoubtedly welco= me being relieved of any obligations to test and document adherence to ENERGY STAR. This is probably just a= s well given the likelihood that:

By = setting lighting and appliance kWh savings standards and utilizing the HERS rater infrastructure to verify adherence to these standards as part of the ENERGY STAR Homes process, LIPA is able to justify financial support of the ENERGY STAR Labeled Homes program. C= ode officials would not necessarily be willing to count light fixtures or track appliance model numbers, but HERS raters can charge for this service and support these efforts. Howeve= r, LIPA will only be able to justify providing financial support to what is mandated by law. After a few = years helping foster the code transition, they will need to raise the bar again f= or their new homes program and provide incentives for even more efficient home= s, with the ultimate target being “zero energy homes”.

Economic Development

Moving the new home code to ENERGY STAR can be done wi= th very little or no cost to local taxpayers.= By utilizing market-based certified HERS energy raters instead of building code officials, government does not have to increase fees or taxes= in order to achieve this significant new home savings. Energy rating jobs in the local ec= onomy are created and paid for by those who will directly benefit from the reduced energy costs: the home buyers. Raters will provide their rating services to builders who hire them = like any other sub-contractor. As = with all the costs of building a home, these expenses will be passed along to the person buying the home in the form of the purchase price. Jobs are created and the buyers wh= o will realize a more efficient home foot the bill.

On Long Island, the cost to upgrade the average new ho= me to ENERGY STAR Home levels is estimated to be about $4,000, which covers the raters fees (generally in the $500-$800 range depending on house size and complexity) and the cost for the necessary improvements. However, the savings that will acc= rue from this investment will more than pay for the upgrades from the first year the house is occupied. Specifical= ly, financing $4,000 as part of the house price will add about $300 per year to= the mortgage payments[3]. However, annual energy cost saving= s of $1,150 will more than off-set this payment increase, resulting in about $850 positive cash flow starting in the first year.

Opportunity<= u> for Replicability

Long Island is not = unique. Ratcheting code up to ENERGY STAR = can be done almost anywhere there exists the political will to save energy. Long Island= does not have a lot of HERS raters currently, but are using the interim time before the new code takes effect to train and certify raters and educate builders on what it will take to make ENERGY STAR. LIPA is providing a key support ro= le by helping fund some of the outreach, helping fund the training of raters, builders and subs, providing loans and grants for purchasing testing equipm= ent (blower doors, duct blasters, combustion safety equipment, etc.), and ensur= ing quality assurance of the rating process. In locations where demand-side management (DSM) programs exist, they can provi= de assistance and support. Howev= er, DSM programs don’t always have to be in place in order to get started. As with Lon= g Island, all it took was the passing of the ENERGY STAR ordinance for market interes= t in the energy rating business to flourish.&nb= sp; This, too, could easily happen elsewhere.

Conclusion

If we are to start getting serious about the environmental and societal costs of our energy use, cutting new home energy= use by 20% or more would be a step in the right direction. Moving local codes to ENERGY STAR = levels can be accomplished at no taxpayer expense while boosting the local economy through HERS energy rater job creation.&nb= sp; Long Island has proven that this = can be done and that the local home bu= ilders can potentially be an ally in the process if they understand the benefits f= or their association, members, customers and the environment.