This blog post represents the second in a new series on “Affordable Heat: Powered by Policy.” 

As the federal government eliminates incentives for energy efficiency, states are searching for affordable strategies to mitigate increasing electric loads. One tool in the toolbox is energy-efficient building codes for new construction. In 2023, residential and commercial buildings made up 27.6% of end-use energy consumption nationwide. There is much work to do to address the needs of nearly 150 million existing housing units, many of which require significant efficiency retrofits. But the “low-hanging fruit” of energy efficiency can be stronger codes for new construction, the easiest and most cost-effective stage to include building efficiency, resiliency, and the ability to interact with an ever-more flexible and dynamic electric grid.

Building codes are adopted by governments to establish a minimum standard of efficiency in new and significantly renovated buildings. States draw on the International Energy Conservation Code (IECC), published by the International Code Council (ICC), as a model for new energy codes. Updated model codes are released every three years, and several states are currently reviewing and working to adopt the most recent model published in 2024. The model codes are divided into commercial and residential categories and prioritize flexible compliance pathways while maintaining a relatively efficient standard.

Each state is unique in its approach to adopting the IECC and updating new construction standards. Some have codified update cycles for adoption of new model codes. Others with no code review timelines lag behind by a decade or more. Leader states for energy-efficient standards offer additional stretch codes (i.e., high-efficiency codes that local governments can opt into) and adopt above-code amendments. For example, Colorado requires new construction to be all-electric ready and solar-ready, preparing buildings to serve the needs of a highly electrified and distributed grid. Massachusetts has electric vehicle (EV) and solar-readiness requirements for residential and commercial buildings in its base code and net-zero building energy requirements in its specialized, opt-in energy code adopted by 55 municipalities. Many of these above-code amendments appear as prepackaged appendices in the IECC model code. These amendments can help unlock opportunity for the advanced energy industry, deploy critical distributed energy resources (DERs), and manage peak electric load. They include: 

• Electric Readiness: Requires buildings with combustion and fossil-fuel based systems to be constructed with the electrical infrastructure and capacity to support future electrification of water heating, cooking, and clothes drying on the residential side and space heating, water heating, cooking, and clothes drying on the commercial side. 

• Solar Readiness: Requires buildings to be constructed with space, structure, and electrical systems to accommodate future rooftop solar installations. 

• Demand Responsive Systems: On the commercial side, requires demand-responsive technology for air heating and cooling, water heating, and lighting. On the residential side, requires demand-responsive water heating systems. 

• On-Site Renewables: Requires on-site solar energy production. 

• Net Zero Energy Buildings: Requires either on-site renewables or off-site renewable production, whether purchased or produced, to negate the additional electric load added to the grid by the new building in a given year. 

• Electric Vehicle Infrastructure: Requires buildings be constructed with electric vehicle charging infrastructure. 

• Battery Storage Infrastructure: Requires buildings be constructed with electric energy storage systems. 

While plenty of building code adoption and enforcement happens at the county and local levels, there are several state-level opportunities on the horizon to push for higher efficiency standards and distributed energy resource integration – and also to consider how to expand the role of demand flexibility in new construction.

The 2021 International Green Construction Code (IgCC), for example, is an optional model code developed by the ICC that sets several measures for commercial buildings. One section of the code requires building controls include automated demand response infrastructure capable of receiving demand response request from a utility, electrical system operator, or third-party. In addition, California’s Building Energy Standard includes mandatory requirements for demand management for buildings (excluding healthcare facilities) that cover demand responsive controls for HVAC, lighting, electronic message centers, and receptable controls. In future code adoption processes, more states can promote grid reliability and cost-containment by adding demand flexibility provisions to their energy code – starting with the IECC’s Demand Responsive Systems amendment and potentially extending further by including additional residential appliances beyond water heating.

Other upcoming opportunities include Wisconsin and Maryland. Wisconsin has not seen a residential building code update in over a decade due to rulemaking vetoes by the state legislature’s Joint Committee on Review of Administrative Rules. Following a July Wisconsin Supreme Court decision reducing the committee’s power over agency rulemaking, there may be an opportunity to advocate for the adoption of the residential 2024 IECC and pass legislation to codify a triennial code update process in coming years. Maryland may have opportunities in 2027 to adopt additional upgrades to the 2027 IECC, including demand responsive and all-electric appendices and higher efficiency stretch codes.

Despite progress, efficient building codes still face obstacles. Opponents of building code updates often raise concerns over construction costs. However, adopting and implementing modern building codes is shown to reduce the cost of living by curbing utility bills and repairs and maintenance without impacting housing affordability in construction. An economic analysis from RMI suggests that all-electric homes are cost-competitive with or even cheaper than mixed-fuel units to build and operate. Even more, modern building codes have been found to save households $15,000 in utility bills over a typical mortgage, and New York’s new all-electric standards are expected to pay off with energy savings in under ten years. Likewise, electric technologies are increasingly cost-competitive, reflected by the rapidly growing market for electric heat pumps. Enabling these technologies through state building codes will only expedite market adoption and push the technologies down the cost curve.

In an era of growing electric loads and federal rollbacks, states cannot afford to leave cost-effective, commonsense energy efficiency solutions on the table. Building codes that enable efficiency, DER integration, and demand flexibility are a powerful tool states can use to avoid costly upgrades to the electric grid and ensure long-term energy affordability. United looks forward to future state-level opportunities to expand energy efficient and clean technology adoption in new construction.