This blog is written by my New Buildings Institute (NBI) colleague, Sean Denniston.
Building electrification and decarbonization policies are being discussed in cities and states as well as in corporate boards across the country. Last month, the United States Securities and Exchange Commission revealed a long-awaited proposal to require public companies to disclose certain climate-related information. Meanwhile, Minnesota state lawmakers are considering a change that would allow cities to adopt the latest building energy codes before the state (only for larger and commercial buildings).
We have long known that it is cheapest and easiest to electrify buildings, or “prepare” them for future electrification, at the time of construction. But a new report released this month by the New Buildings Institute (NBI), with support from the NRDC, provides valuable findings that confirm the potential savings. The report, “Building Decarbonization Code Cost Study,” analyzes the incremental upfront cost and lifecycle cost of two common building types that follow BNI’s Building Decarbonization Code code language, a tool revolutionary intended to provide significant energy savings and low carbon emissions. performance in new construction projects. The study analyzes the two paths proposed in the Code to decarbonize buildings – all-electric (a building is powered solely by electricity) and mixed (including natural gas or other fossil fuels such as propane or heating oil). which is burned on the spot).
Through examination of a single-family prototype, the cost study found that all-electric homes provide construction savings and households using mixed-use buildings are nominally more expensive. It also found only marginal incremental upfront costs for owners of the prototype all-electric mid-rise office building, with most of the building decarbonization code’s early costs attributed to electric vehicle charging infrastructure. . Additionally, researchers determined that life-cycle cost analysis (LCCA) for single-family prototypes produced both economic and societal benefits. These are important findings for jurisdictions considering adopting the decarbonization building code and inform the potential impact on construction costs and savings opportunities as they strive to move away from the combustion of fossil fuels in buildings.
For this study, the researchers used cost data from New York State, a relatively expensive market in climate zone 5A, a relatively cold climate. There are currently 21 US states that contain cities and counties in climate zone 5A, making the results applicable to a wide region of the country. At the end of the report (and this blog), you will find our recommendations for jurisdictions considering electrification-ready or electrification-ready measures in their next code cycle.
Key Findings from the Decarbonization Code Cost Study
More importantly for the climate, the study found that the carbon emissions impact of building electrification is six times greater than the electricity-ready scenarios, saving 126.2 MT of Co2e. Other key findings include:
- Single-family, all-electric homes built to meet the building decarbonization code cost between $7,500 and $8,200 less to build than base code homes in the study area.
- Mid-rise all-electric office buildings in the study area cost only slightly more ($0.33-0.50/sqft) to build compared to benchmark office buildings.
- The avoided cost of not installing fossil fuel infrastructure is a key factor supporting the profitability of the all-electric route.
- Electrification during new construction is much more cost effective than implementing electrification readiness. (Electric-ready construction allows simple and inexpensive installation of all-electric technology at some point in the future).
- Yet electric-ready construction saves the homeowner thousands of dollars compared to retrofitting to allow replacement of electrical equipment.
- The all-electric single-family scenario reduced total energy consumption by 34%, while the dual-fuel scenario reduced energy consumption by 9% compared to the baseline. However, going all-electric can still result in higher utility bills due to the high cost of electricity compared to natural gas in the study area.
- This leads us to conclude that electrification is more cost effective in areas that have hourly rates (i.e. where electricity rates fluctuate based on demand).
- Where climates are warmer and/or electricity costs are more affordable than in New York State’s 5A climate zone, the operating and lifecycle costs of decarbonization will be better than the results of this study.
A regional study with a national scope
NBI’s Building Decarbonization Code is an overlay compatible with the International Energy Conservation Code (IECC) 2021 and ASHRAE Standard 90.1, providing code language for new residential and commercial construction intended to help reduce the amount of carbon emitted by buildings. The Building Decarbonization Code addresses buildings’ direct onsite fossil fuel consumption and prepares buildings for the transition to a cleaner electrical grid.
While this Building Decarbonization Code Cost Impact Review examines specific scenarios within one climate zone, it has been designed to establish a methodology that can be extended to analyze other building typologies, climate zones, and geographies. . And the results provide positive indications that future studies will conclude that all-electric and mixed versions of the building decarbonization code are cost-effective elsewhere.
Based on the results of this study, we recommend the following:
- All jurisdictions in Climate Zone 5A with utility costs within the ranges presented in the study are adopting provisions for single-family all-electric homes for new construction, including requirements for charging equipment for electric vehicles.
- All jurisdictions in climate zone 5A are adopting all-electric commercial office provisions for new construction, strongly considering the inclusion of requirements for electric vehicle charging equipment to mitigate future costs of electrification of the transport sector.
- Similar business cases should be applied to additional climate zones and building types to analyze the potential savings of these code provisions in additional geographies and applications.