North Carolina panel moves to weaken building energy conservation rules

A change approved last month would let builders bypass minimum efficiency standards in favor of a voluntary suite green building standards.

A change to North Carolina’s building code would let developers skimp on insulation and other energy-saving basics in exchange for flashier elements such as solar panels and super-efficient appliances.

The state’s building code council last month adopted the new rule, which allows developers to bypass some energy conservation requirements if they follow a voluntary suite of green building standards.

Critics believe the change to the state’s energy efficiency code is too poorly written to be implemented, and that it could perish on procedural grounds before a rules review panel, where it heads next.

But it highlights the role developers are playing nationwide in stopping efforts to improve building energy efficiency, just as climate scientists say we should be doing the opposite. And it exposes how inadequate North Carolina’s energy conservation code is in light of its own climate goals.

“A lot of this,” said Bryan Howard, director of state policy with the American Council on an Energy Efficiency Economy, “is moving around deck chairs on the Titanic.”

‘This shouldn’t be an either/or’

To avoid the most catastrophic impacts of climate change, experts believe we must virtually eliminate global warming pollution from all sources, including our buildings, by mid-century. Today, our homes, schools and offices account for nearly 40% of the problem, and without action their emissions are on track to double.

“Net-zero” buildings are widely regarded as the solution. “It’s a super-efficient building that produces all of its own energy,” said Kim Cheslak, director of codes for the New Buildings Institute, a nationwide nonprofit striving for zero-carbon buildings.

Advocates are pushing for all buildings to become net-zero by 2050, and all new construction to meet that threshold by 2030. But every single structure doesn’t necessarily need its own solar panel or wind turbine, said Cheslak. “What we do desperately need,” she said, “is buildings that do all of the efficiency measures that net-zero buildings do.”

Those measures include lighting, air conditioners and other appliances that use minimal amounts of energy. But they also include windows, insulation, and air seals — the key components of a building’s envelope — which maintain a comfortable, healthy indoor environment no matter what it’s like outside.

“When people hear energy efficiency, they think of setting your thermostat low, wearing an extra sweater. That is not what I’m selling,” said Cheslak, who’s based in Portland, Maine. “I am, in fact, attempting to sell a home that if you live in Maine and your power goes out for 72 hours, the interior temperature will not dip below 60 degrees.”

The envelope is less tangible than a solar panel or high-efficiency appliance. But it’s critical to get right at the point of construction. It determines how much energy the home will need and how many solar panels or what size HVAC to install. It’s much more expensive to replace or augment after the fact (and in the case of wall insulation, nearly impossible.) 

“A good envelope is always a good envelope,” said Ben Edwards, senior associate with Mathis Consulting, an Asheville building consulting firm. On the other hand, “you’re going to be replacing your equipment every 10 to 15 years.”

Yet, to the consternation of energy conservation advocates around the country, residential builders have consistently fought minimum efficiency standards, especially for the envelope. Their stated reason is cost, even though the price of these features is negligible, particularly when stretched out over a 30-year mortgage. For homeowners, the standards quickly pay for themselves in the form of lower energy bills.

Whatever their motivations, developers have stymied efforts in recent years to strengthen the model energy code for North America and its adoption by localities across the country. “The national level, state level, local level — every time there’s no less than two fights with the building industry,” Cheslak said.

The model code for 2021, just finalized months ago, will see a 10% improvement in efficiency, but the gains in 2015 and 2018 were relatively small. The reason is not technological, Cheslak said. “It’s 100% political.”

During the lull in progress, regulators in North Carolina and at least 14 other states added an incentive for building green. Under this “alternative compliance pathway,” if developers install ultra-efficient lighting, solar panels, or other technologies to reduce the building’s energy consumption, they can skimp on insulation or other prescriptions in the code, often for less cost.

Homes must achieve a specified Energy Rating Index that reflects these trade-offs, where 0 is a net-zero building and 100 is one that conforms to the 2006 model code. For North Carolina’s cooler, northwestern counties, the target index is 67; for its warmer, southeastern counties, the target index is 65. (If renewable energy is generated onsite, the target is lower.)

Many energy conservation advocates are wary of this approach, since it could tempt builders or homeowners to trade away a “good envelope” for increasingly affordable features like solar panels or high-efficiency appliances. “This shouldn’t be an either/or,” said Howard. “This should be a both.”

The “both” is especially critical in light of imperatives around climate change, according to energy experts. “I absolutely want to go to 100% renewable energy,” Edwards said. “But it will not happen unless we reduce our energy use first.”

That’s why the index rating compliance route contains a safeguard: Builders must meet some minimum requirements on lighting and aspects of the building envelope — albeit more lenient ones than the prescriptive code.  

In North Carolina, category-by-category efficiency requirements are roughly equivalent to the 2012 model code, while the minimum standards for the Energy Rating Index compliance pathway are not that much more lenient, roughly equivalent to the 2009 model code. 

As a result, few builders take advantage of the pathway. According to the nonprofit North Carolina Building Performance Association, each year about 30% of new homes in the state get a certified energy rating index. But most ratings are used for marketing purposes; only about 3% are used to comply with the code.

“The backstop may be a little more aggressive than it needs to be,” said Amy Musser, a green building consultant based in Asheville and a member of the association. But, she added, “if you have no backstop at all, it opens up to people doing things that they should not do.”

‘There’s no backstop’

That, critics say, is a key problem with the amendment to the energy code just passed by the Building Code Council. “There’s no backstop,” Edwards said.

Proposed by the North Carolina Homebuilders Association, the change offers residential builders the option of determining their index using the 2019 standard developed by the Residential Energy Services Network, or RESNET, a non-governmental organization created in 1995.

RESNET is the nation’s preeminent energy rater, and the state’s current code now references the nonprofit’s 2014 standard. Updating the code to reference the 2019 edition is reasonable, advocates say. So, too, might be a tweaking of the backstop for the energy rating compliance pathway, to make it more attractive to builders.

But the developers’ proposal doesn’t do either. Rather than replace the 2014 standard with the 2019 version, it creates a new provision in the energy code, without any of the legal architecture of the Energy Rating Index section. As a result, it lacks an array of minimum requirements for lighting, testing, insulation, and even a thermostat. 

While it contains a chart with the overall index requirement, without other regulatory context, “they’re just a bunch of numbers,” said Edwards. “It doesn’t tell you what the numbers mean. It doesn’t tell you how the numbers interact with the building. It doesn’t tell you what software you could use. It’s all undefined.”

The issue of computer software is far from trivial. Ryan Miller, who leads the North Carolina Building Performance Association, says it relies on state-specific inputs to produce a state-specific index number.

“The software programs are built to match the standards,” he said. “They use those standards in the reference home to say, ‘here’s the average home, and here’s the home that you’re looking to build, and here’s the differences in energy savings.’”

With the Homebuilders’ amendment, Miller said, “we’re going to have to ask for custom software that will allow what no state or jurisdiction in the country has ever done — as far as we’re aware of — which is to allow for an [Energy Rating Index] pathway without any minimum requirements.”

North Carolina Homebuilders Association lobbyist Robert Privott is a fixture at the Building Code Council, and his name is on the controversial amendment. Asked at the December meeting if the measure was intended to accommodate the latest RESNET standard, or if it was intended to resolve another issue, he told the Energy News Network his proposal wasn’t an attempt to solve any problem. Instead, he said simply, “it gives another option.”

Privott scoffed at the worst-case scenario claimed by opponents — that homes could be constructed without thermostats or any wall insulation — and shared a memo he’d sent to councilors calling the assertions “nonsensical.”

In fact, most observers believe the majority of developers will still build quality homes under the change, and even bad actors wouldn’t go to the extreme of installing zero wall insulation. But Musser says even mild corner-cutting could wreak havoc on building performance. 

“If you insulate one part of the building really well except for, say, walls, you end up having a condensation problem,” she said, especially in a climate like North Carolina’s. “There’s enough humidity around, if you have a weak point, the humidity finds it.” 

And while it’s hard to imagine anyone purchasing a home without a thermostat, Musser says some of the worst ideas in home construction come from the buyers, not the builders.

The code has stopped some of her clients from doing “very stupid things,” Musser wrote in an email to the code council. “I’ve seen people wanting to use bubble wrap for insulation in walls and single-pane, homemade windows. People come up with some crazy ideas.”

Apart from its substance, the amendment could get caught on procedural snags that, ironically, were designed to make it harder to strengthen the energy conservation code.

While the code can only be revamped every six years, the council can consider discrete amendments if they are accompanied by a “cost-benefit analysis.” Such an evaluation was submitted in name but lacks numeric detail. Instead, it references “a detailed fiscal note and analysis” performed in 2017, when the council adopted the current version of the entire energy conservation code. Likewise, Privott’s December memo to the council asserts without specifics that the amendment would “reduce up-front costs as well as provide energy savings to the consumer.”

Another bureaucratic hurdle: a fiscal note (distinct from a cost-benefit analysis) is required for any change to any part of the building code that would increase the cost of a residential unit by $80. Neither the council nor the Homebuilders Association produced one, and Privott told the Energy News Network it wasn’t necessary. But if more than 10 people write to the state’s Rules Review Commission credibly asserting otherwise, the amendment could be sent back to the code council.

That possibility was explained at the December meeting, prompting relatively new council member Kim Humiston, an electrical engineer from Charlotte, to suggest delaying the measure until it had a fiscal note. “If it’s just going to come back to us anyway,” she said, noting the many emails she’d received against the proposal, “why not just table it?”

Instead, the council adopted it 13 to 4, with Humiston among the “no” votes. 

Critics immediately pledged an appeal to the rules review panel, demanding a fiscal note. “They’ve sent incomplete rulemaking back for much less than this,” Edwards said.

‘Your building industry is ready’

If the amendment ultimately fails as written, North Carolina’s residential energy conservation code will still be roughly ten years behind the model code and lagging more than a dozen states.

To keep pace with the Paris Agreement and the state’s own goal of net-zero electricity emissions by 2050, the state will have to make major updates to its code by 2030 to maximize efficiency in buildings and make them ready to accommodate solar panels and electric vehicles.

To help the state catch up, advocates say the code should be updated every three years rather than every six, and that the council — now overwhelmingly composed of engineers, electricians, and builders —  should have an energy efficiency representative. 

Both changes have been suggested by the administration of Gov. Roy Cooper, a Democrat. But they would require legislation from the Republican-led General Assembly and, almost certainly, support from the North Carolina Homebuilders Association — which has eluded energy conservation advocates for at least a decade.

Still, there’s no reason developers in the state can’t build markedly more energy efficient homes, stressed Cheslak of the New Building Institute.

“North Carolina’s not an island. You still put up stud walls, and you put insulation in them,” she said. “On the whole, your building industry is ready for this.”

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