ACEEE report outlines how state can tap federal funding to update building codes

A new report from the American Council for an Energy-Efficient Economy (ACEEE) outlines the states best positioned to take advantage of the federal funding to update building energy codes.

Building energy codes set requirements for building construction, such as for insulation, windows, or heating systems. Stronger codes reduce energy use in new buildings and thus cut utility costs and GHG emissions. States could cut energy use in new buildings by as much as one-third by updating building energy codes, according to ACEEE.

In its analysis, ACEEE analyzed several factors in each state — including energy savings achievable for new buildings under a stronger code, the pace of new building construction, and greenhouse gas (GHG) emissions from buildings — to evaluate how stronger codes could help states meet their climate targets.

“States with out-of-date building energy codes miss out on a cost-effective pathway to reduce energy use and greenhouse gas emissions, leaving residents with higher utility bills,” Michael Waite, senior manager in ACEEE’S buildings program and author of the study, said. “States and cities have an unprecedented opportunity to update their codes thanks to federal assistance. The jurisdictions that would see the greatest benefits should not pass up this opportunity.”

The study comes as an unprecedented amount of federal resources become available to states to update building codes. In December, the Department of Energy announced the first $45 million of a five-year, $225 million grant program to help states and localities implement updated building energy codes. This funding became available through the bipartisan infrastructure law passed in 2021. The Inflation Reduction Act, passed in 2022, will provide another $1 billion to help states and local jurisdictions adopt and implement stronger codes

Overall, ACEEE found that 16 states could cut energy costs in new homes by at least 20 percent and 14 states could decrease energy costs 20 percent in new commercial buildings by adopting the most recent national building energy codes.

The research found that residents and businesses in Arkansas, Oklahoma, Tennessee, Kentucky, North Dakota, Missouri, South Carolina, and South Dakota would see the greatest cost savings from updating residential building energy codes.

Louisiana, Oklahoma, Arkansas, South Carolina, Missouri, and South Dakota residents and businesses would save the most money from adopting new energy codes in commercial buildings. The report includes a full detailed analysis for all the states, with rankings.

The analysis also found that most states that have set GHG reduction targets are not on track to meet them. Only Illinois and Maine are on a trajectory to meet 2030 climate goals. Virginia, Oregon, and Rhode Island need to cut emissions by more than half from 2019 levels to meet 2030 climate targets, while eight other states and Washington, DC, need to reduce emissions by more than 40 percent by 2030.