Building Transition

HEET and members of the Boston Green New Deal Coalition discuss building weatherization and electrification.

“Imagine a better future with safer, healthier buildings."

Transitioning Buildings to Electrification

Imagine that in the near future, the air inside homes is free of harmful pollutants, and the temperature is always comfortable. Combustion appliances are a thing of the past. “Smart” buildings are able to communicate with each other and with the thermal and electric grids. Both grids provide renewable, combustion-free energy, optimizing energy use and trimming peak demand.

Buildings produce or offset as much energy as they consume—or more. Both buildings and the thermal grid store surplus energy locally or send it back to the grid. Overall, the built environment is a sustainable and resilient part of our social fabric that improves everyone’s quality of life.

To create this future, we must overcome challenges related to energy, economics, workforce, equity, and other factors. By holistically solving these challenges, we can equitably transition to a cleaner and more resilient built environment, that supports our energy needs, improves air quality, and continues to reduce the emissions that cause global warming.

‍Energy consumption and carbon emissions

High energy consumption and carbon emissions in residential and commercial buildings is the most important challenge to overcome. Energy consumption nationally is typically distributed across four sectors: residential, commercial, industrial, and transportation. The combined energy consumption of the residential and commercial sectors is about one-third of total energy consumption annually. In 2021 that translated to 34,916 trillion BTU of energy and 1,711 million metric tons of carbon dioxide released into the atmosphere.

Old homes and buildings

Many homes and buildings were constructed before modern building codes and energy efficiency standards were implemented. The median age of homes in Massachusetts is 57 years, which predates the first International Energy Conservation Code for residential new construction, published in 1998. As a result, the majority of our buildings will need upgrades to reduce their energy consumption.

However, challenges arise when older buildings haven’t been maintained properly because of the cost or time associated with maintenance. Deferred maintenance issues like structural damage, old knob and tube wiring, and poor ventilation can prevent some upgrades from being completed and increase the overall cost of building upgrades.

Key to the old-home-and-building challenge is reducing heating and cooling needs through weatherization. HEET’s work has identified pre-weatherization barriers which require further study.

Knob and tube wiring, was phased out in the 1940s, is a barrier to installing insulation.
Combustion failures on gas, oil and propane appliances are a safety and health problem as well as a barrier to moving forward with weatherization.
Improper ventilation or leaks that cause mold or mildew also prevent air-sealing and insulation.
Additional health challenges from toxic building materials such as asbestos and vermiculite are costly to remediate, often impeding progress on weatherization.

Upfront costs of building retrofits

Some utilities offer opportunities to improve energy efficiency in homes and businesses. These opportunities include incentives like rebates and discounts on EnergyStar appliances, free home energy assessments, and access to a network of contractors/installers. Despite these incentives, there is still often an upfront cost that can be a major barrier for a lot of people and prevent them from taking action even when they want to. There are also equity challenges. Renters are unable to access many building retrofit opportunities because they don’t own the building. Apartments where the landlord doesn’t live in the building are sometimes even harder to retrofit. The landlord doesn’t have a direct incentive to upgrade the building to save on energy costs and improve comfort because they don’t live there.

‍Challenges of unmanaged electrification

Natural gas is the main fuel used to heat homes in the U.S. Switching from combusting fossil fuels (i.e., natural gas, fuel oil and propane) to electric and thermal energy produced by renewables will reduce planet-warming emissions. However, unmanaged electrification can present its own set of challenges. Electric grids around the country need to be upgraded to add capacity and improve reliability. Electrifying without addressing the grid can result in high electricity costs for ratepayers by shifting demand and putting the grid at risk of blackouts as demonstrated by the Falcon Curve. High electricity costs are particularly challenging in communities where people pay a higher percentage of their income to energy costs. This is called an energy burden. Energy-burdened communities are also challenged by the upfront costs of electrifying.

Policy

Building performance standards: Building performance standards or building energy performance standards require buildings to report their annual emissions and energy consumption. Performance targets are established that become more stringent, which reduce building emissions over time. Since their inception building performance standards have typically been used to reduce emissions in commercial and multifamily residential buildings.
Home energy scorecards: Home energy scorecards provide home energy efficiency data that are scored and compared to similar homes. They operate similarly to a car’s miles-per-gallon rating. The Home Energy Score, developed by the Department of Energy, is one scoring system used to grade homes on their performance and develop customized scorecards. The scorecard is a helpful tool for homeowners, renters, and homebuyers to understand the energy performance and savings potential of the home.

Programs

Pre-weatherization barrier incentives: Pre-weatherization barriers often force retrofit projects to be deferred until they are addressed. To streamline the retrofit process, grant funding and contractors to clear these barriers should be included in the scope of weatherization and building retrofit programs.
Tariffed on-bill programs: A tariffed on-bill program is a financing model where a utility pays upfront for energy efficiency and electrification upgrades to a building and recovers the cost through a fixed charge on a customer’s utility bill. The charge is based on the estimated annual energy savings and is linked to the building meter and not the building owner or tenants, allowing for flexibility in cost recovery even when there is turnover in utility customers. These programs must be implemented equitably by adding certain protections like requiring that the estimated monthly savings are more than the fixed charge to ensure overall savings for the customer.‍
Upfront utility incentives: Rebates are useful for helping building owners recover some of the costs associated with energy efficiency and electrification upgrades. However, they still require money upfront to pay for the upgrades. Instant rebates, discounts, and other funding should be made available to reduce the upfront cost burden.

Utility regulations

Rate redesign: Utility rates are structured based on account type (residential and commercial) and in some cases income (low-income rate). However, to incentivize electrification like switching to heat pumps, other rate options are needed, especially in states like Massachusetts where electricity costs are high relative to heating with natural gas. ‍
Gas to thermal utility plan: As we move toward decarbonization, gas utilities should begin planning how they will transition. Geothermal networks present an opportunity for gas utilities to scale up the technology while decommissioning the gas system in a way that maintains reliability and affordability for customers.

Workforce

Needs assessment: There are workforce needs across the building sector. As programs are created and funding is committed to building decarbonization, needs assessments across the industry must be conducted to determine where there are gaps in the workforce that may slow down the transition.
Training/retraining: Investments in existing and new workforce training opportunities should be made to ensure there is a pipeline of talent to meet the needs of the transition. Retraining programs should support the existing workforce to prepare for new jobs and opportunities as gas and other fossil fuel infrastructure is phased out. Programs should also be designed to promote an equitable workforce, meaning that programs and outreach should address existing racial and gender gaps through intentional and targeted recruitment.

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Building Transition

Transitioning Buildings to Electrification

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