Local Residential Energy Efficiency

• Policy Options for Local Governments
  • New Home Construction
  • Home Improvement
  • Financing
  • New Products
• ENERGY STAR Resources
• ENERGY STAR Publications and Tools

Local governments can reduce energy consumption in their jurisdictions and help homeowners save on their energy bills, and lower greenhouse gas emissions with residential energy efficiency policies and programs. Residential-sector efficiency programs also increase investment in local economies and can provide jobs for skilled professionals such as energy auditors and home energy raters, contractors, as well as retailers and product distributors.

Policy Options for Local Governments

Local governments can adopt a range of policies and programs to encourage energy efficiency in new construction, existing homes, and new products. To support the programs, local governments also can develop financing options to help lower the cost of making energy efficiency improvements in new or existing homes. For each of these mechanisms, local governments may be able to coordinate with electric and gas utilities, regional energy efficiency organizations, trade groups (e.g., home builders, home energy raters, contractors, energy services companies, etc.), product retailers, and others to share information and leverage existing efforts. These stakeholders can help design, develop, and market local energy efficiency programs and policies.

• New Home Construction
• Home Improvement
• Financing
• New Products

New Home Construction

Local governments can pursue the following policy and program options to improve energy efficiency in the new construction sector.

Incentives

Local governments can encourage energy efficiency in new homes by providing incentives to local homebuilders who incorporate energy efficiency into their building practices through the ENERGY STAR qualified new homes specification. ENERGY STAR certified new homes are at least 15 percent more energy efficient than homes built to current code, and include additional features that typically make them 20–30 percent more efficient than standard new homes. Other benefits include improved indoor air and homeowner comfort, and lower energy bills.

One strategy for local governments is to offer home builders the following incentives for building ENERGY STAR qualified homes:

• Discounted or delayed permit fees
• Priority with code processing
• Increased density allowances
• Expedited plan approvals
• Priority field inspections
• Discounted utility hook-up fees or rates
  • The City of Tallahassee Utilities, the municipal utility of Tallahassee, Florida, offers a rebate of $1/square foot (up to $2,000) for ENERGY STAR qualified new homes. Qualifying housing types include single-family detached, single-family attached, low-rise multifamily, and existing-home renovations.

Building Energy Codes

Building energy codes are intended to ensure a minimum level of energy efficiency in new construction. In combination with appliance standards, energy codes that are well-designed, implemented, and enforced can lock in cost-effective energy savings of more than 30 percent at the time of building construction compared with standard practices.

While codes are typically adopted at the state level, self-governing municipalities may be able to adopt and implement their own codes. The Database of State Incentives for Renewable Energy provides information on the current status of state energy codes.

In most states, local governments are also responsible for implementing, inspecting, and enforcing the state code. Municipalities can go even further by providing code-related training and education for builders, inspectors, and other key stakeholders. The Building Codes Assistance Project provides information to regulatory and legislative bodies on strategies for effective local implementation.

Ratings

A home energy rating involves analysis of a home's construction plans and onsite inspections to produce a rating or score based on a standard point scale (typically 0 to 100). Local governments can require energy ratings in new construction, promote voluntary rating programs, or offer incentives for the use of ratings. Some building codes also require home energy ratings. Learn how new homes earn the ENERGY STAR.

Home Improvement

While new homes can be designed from the ground up with energy efficiency in mind, existing homes typically offer many opportunities for improvement. To help enhance the energy efficiency of homes in their jurisdictions, local governments can encourage homeowners to perform comprehensive home assessments and implement the recommended measures. These “home energy retrofits” can be a cost-effective way to provide significant energy savings to homeowners as well as improve the health, comfort, and safety of homes. This strategy can also create green jobs, improve the durability of the housing stock, and assist at-need populations. As with new home construction, local governments can coordinate with utilities, trade groups, product retailers, and other stakeholders to complement or leverage existing energy efficiency efforts.

Voluntary Programs

Home Performance with ENERGY STAR (HPwES) and other voluntary home energy retrofit programs offer whole-house, comprehensive approaches to improving residential energy efficiency. Local and regional policymakers can work with existing HPwES programs in their area or consider becoming local HPwES sponsors. Some localities have also proposed or adopted alternative voluntary programs, such as “direct install” initiatives, in which energy-saving retrofits are performed in primarily low-income households. These programs are often conducted using a “neighborhood blitz” approach, with all homes in a targeted neighborhood receiving the retrofits. They can also be done in conjunction with other programs, such as home weatherization or HPwES.

Regulatory and Other Direct Efforts

Audits: Energy audits assess how much energy a home consumes and evaluate measures to make the home more energy efficient. However, EPA has found that energy audits alone do not produce energy savings. A key strategy of HPwES is to empower the homeowner with information (via an audit) and create a clear pathway for acting on recommendations. Some local governments have promoted free or discounted energy audits for homes, or have considered mandating audits at the time of sale.

Energy Disclosure: Requiring home sellers to disclose their energy bills to potential homebuyers can increase market awareness of energy efficiency and promote the message that a home's energy use is an important factor that home buyers can consider as part of their purchasing decision. Local governments can require or encourage energy performance benchmarking and disclosure.

• In 2009, New York City passed legislation requiring the owners of large buildings to make an annual benchmark analysis of energy consumption, allowing owners, tenants, and potential tenants to compare buildings' energy consumption.

Improvement Programs: Several localities have considered or adopted mandatory energy efficiency improvement programs that combine elements of several or all of the other types of efforts described above.

• The city of Berkeley, California's Building Emissions Saving Ordinance Ordinance requires energy assessments at the time of sale (if the home has not already been audited) and when extensive remodeling occurs to identify improvements to make the building more energy efficient. The recommendations provided are in the assessment are not required.

Financing

No single clean energy financing mechanism can meet the needs of all customers. Therefore, local governments pursuing a lending program should understand the unique requirements and conditions of targeted sectors and project types. Municipalities can also coordinate with state governments, private lenders, utilities, and other partners to meet the range of financing needs.

Property Assessed Clean Energy (PACE) Bonds

A PACE Bond is a bond issued by municipal financing districts or finance companies, with the proceeds lent to property owners to finance energy retrofits. The owners repay their loans over 20 years via an annual assessment on their property tax bill. A growing number of state and local governments have passed enabling legislations for PACE bonds or established PACE programs.

Energy Efficient Mortgages

An Energy Efficient Mortgage (EEM) is a mortgage that credits a home's energy efficiency in the mortgage itself. EEMs give borrowers the opportunity to finance cost-effective, energy-saving measures within their mortgage and stretch debt-to-income qualifying ratios on loans, thereby allowing borrowers to qualify for a larger loan amount. EEMs are typically used to purchase a new home that is already energy efficient, such as an ENERGY STAR qualified home. Local governments can help promote and raise awareness of EEMs among local lenders, realtors, and homebuyers.

New Products

In addition to the options described above, local governments promote further energy use reductions in the residential sector by promoting energy-efficient products. Leveraging the ENERGY STAR program is an efficient way to encourage homeowners to purchase such products. ENERGY STAR products can be found in more than 70 product categories, including home electronics, heating and cooling, lighting, appliances, and more.

The following activities demonstrate a few of the many ways that local governments can work with ENERGY STAR.

Events (e.g., appliance turn-in/recycling)

Hosting a recycling event allows local governments to educate consumers on efficient products and practices, which include recycling appliances and other energy-consuming products at the end of their useful life cycle. Recycling also gives consumers the opportunity to replace the recycled product with a new, energy-efficient model. A recycling event provides a platform to talk to consumers about their upcoming purchasing decision, as well as any applicable incentives. Local governments can host or sponsor product recycling events.

Sales Tax Holiday or Cash Rebates

Sales tax holidays and cash rebates help consumers save money by making it easier for them to install energy-efficient products in their homes and businesses. Many states currently offer exemptions on sales tax for a period of time for certain products, and include ENERGY STAR qualified products on their eligible products lists. Local governments can help promote state sales tax holidays, exempt their own local sales taxes, or provide rebates.