Policy Solutions

Energy Efficiency

US Federal

Research and Development

Federal investment in research and development (R&D) supports economic growth, drives down costs for key technologies that be used domestically or exported abroad, and promotes U.S. leadership on clean energy and climate. Investment in R&D for building efficiency technologies is driven primarily by the U.S. Department of Energy (DOE), particularly the Building Technologies Office within the Office of Energy Efficiency and Renewable Energy (EERE). Further R&D for building electrification comes from DOE’s National Labs and Advanced Research Projects Agency-Energy (ARPA-E). 

Federal policymakers should increase investment and enact programmatic reforms to ensure DOE focuses on advancing R&D for:

  • Zero-carbon district-scale heating and cooling;
  • Advanced building envelope solutions (e.g. prefabricated solutions like structural insulated panels, modular construction techniques, thin-center glass triple pane windows, and aerogel insulation);
  • Smart metering technology, automatic and demand flexible load sensors and controls; and
  • Super-efficient heating and cooling technologies (including low global warming potential refrigerants).

Validation and Early Deployment

Building Performance Disclosure

Information about a building’s emissions and energy use is largely invisible to its owners, occupants, and the market at large. Likewise, it’s not always easy to identify cost-effective upgrades when there is no clear data or metric for performance. Improved disclosure of building-level energy consumption, costs, and emissions will increase awareness, fill information gaps, inform retrofit strategies, incentivize competition between owners, protect consumers, and facilitate standards for efficiency.

Fiscal Incentives

Absent targeted policies to promote early-stage deployment, manufacturers are often not sufficiently incentivized to develop new technologies and consumers tend to shy away from using them. Tax credits, loan guarantees, and other fiscal incentives targeted at the next generation of building efficiency technologies can reduce the green premium and drive private sector demand. Well-designed tax incentives must be technology neutral, predictable, flexible, and prioritize clean technology deployment in low-income and historically disadvantaged communities.

Rapid, Large Scale Deployment

Carbon Pricing

Carbon pricing, whether through a carbon tax or a cap-and-trade system, creates a financial incentive to take advantage of any opportunity to reduce emissions that costs less than the carbon price. A carbon price will encourage rapid deployment of energy-efficient technologies and low-GHG replacements for less efficient equipment. Carbon pricing policies must also include design elements that ensure that communities of color and historically disadvantaged communities see direct benefits from these programs. Policies that require on-site GHG reductions, reductions in air pollution, and distribute carbon pricing revenue to targeted low-income and minority communities will promote energy efficiency while offering additional benefits to communities in need.

Building Codes and Standards

Federal policymakers have a critical role to play in support of state-level building efficiency and electrification policies. For instance, they can develop model standards and approaches to facilitate faster and broader adoption of smart policy. DOE should also provide resources to encourage the adoption of key state policies, including existing building emissions standards and new building codes.

Access to Finance

Capital constraints, in the form of limited access to capital or financing and/or unwillingness to pay high upfront project costs, keep many building owners from implementing energy upgrades. The federal government can unlock access to more capital for efficiency and electrification upgrades through loans, loan guarantees, and other fiscal incentives. These financing options spread project costs over time. They can also overcome split incentives between building owners and tenants. (For example, owners can be discouraged from investing in upgrades when savings would accrue to their tenants, not them.)

Direct Deployment

Given their number and size, federally owned and assisted buildings can lead by example to accelerate the decarbonization of the buildings sector. For example, the General Services Administration (GSA), the largest commercial landlord in the US, controls some 377 million square feet of real estate. The Department of Housing and Urban Development (HUD) spends over $5 billion on energy for housing programs each year. Though there is a wide variety of federal avenues where energy efficiency interventions could be implemented, funding for building retrofits and new construction should focus specifically on the GSA and three key affordable housing programs: the Low-Income Housing Tax Credit, Community Development Block Grants, and HUD rental programs.

Appliance Standards

Currently, federal regulations do not treat GHG emissions as an equivalent priority to energy usage, which implicitly hinders electrification and efficiency over the long term. Correcting these practices will send important market signals and can reduce the green premium for low-GHG alternatives. DOE and EPA should prioritize GHG emissions and energy use in regulations and standards for appliances and equipment, as well as in voluntary programs such as EnergyStar ratings.

Reduce Emissions from Refrigerants

Hydrofluorocarbons, or HFCs, are industrial coolants used for air-conditioning and refrigeration. Per unit of mass, they are more destructive than carbon emissions. As a result, eliminating these super pollutants is among the most cost-effective opportunities for GHG mitigation in the short term.

Alternative refrigerants exist and are widely used outside of the U.S. As such, the federal government should adopt Significant New Alternatives Policy (SNAP) standards banning the use of super-polluting HFCs in end-use appliances. DOE should also develop and improve programs to manage leakage and end-of-life recovery for appliances.

Additional Buildings Policies