latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/building-electrification-could-get-support-under-biden-presidency-60854125 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us
In This List

Building electrification could get support under Biden presidency

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August


Building electrification could get support under Biden presidency

Building electrification backers could get a powerful ally if Democratic candidate Biden prevails in the presidential election on Nov. 3.

Biden's $2 trillion climate-oriented infrastructure plan includes a goal of halving the U.S. building sector's carbon footprint by 2035. It also calls for establishing building performance standards throughout the country; reforming building energy codes; and financing state, city and tribal efforts to adopt stronger codes.

California accelerated a national building electrification movement in 2019 when dozens of Golden State communities began banning natural gas hookups in new buildings or requiring all-electric construction. But the strategy has run into legal hurdles, inertia and backlash beyond California, leaving some supporters to seek alternate, less politically charged pathways to building electrification.

SNL Image

One option is the building performance standard. The policy sets minimum energy efficiency or greenhouse gas emissions targets for buildings, designed to ratchet up over time to drive continued improvement. Building performance standards leave it up to property owners to decide how to hit the targets, so they do not guarantee electrification. But the Biden plan to implement them nationwidecoupled with proposed incentives for electric retrofits, electric grid investments and measures to scale up renewable energycould be a catalyst for electrifying building heating and cooking.

READ MORE: Sign up for our weekly election newsletter here, and read our latest coverage here.

"To get to that 50% reduction in greenhouse gas emissions from buildings, they're going to have to have a four-pronged approach and they're going to have to do all four prongs in parallel," according to Cliff Majersik, director of market transformation at the Institute for Market Transformation, who has worked with cities and states to design building performance standards. Those four prongs include improving building energy efficiency, expanding renewable energy resources, electrifying buildings and implementing demand management programs.

Helping state, local governments adopt new standards

The Biden plan reflects recommendations from the U.S. House Select Committee on the Climate Crisis. A report from committee Democrats recommended federal support for building performance standards, directly referencing the standards that New York; Washington, D.C.; and Washington state adopted. They said the U.S. Department of Energy should analyze those existing policies and develop model standards that communities can adopt. They also advised Congress to provide technical assistance and implementation funding.

Technical assistance could significantly increase interest in the policy, according to Jenna Tatum, director of the Building Electrification Initiative. "It really requires staff and technical assistance or consulting support to develop these policies," she said. "I think that's a big barrier to moving forward for a lot of cities and statesjust not having the bandwidth or the capacity to work on it."

Select committee Democrats also recommended requiring commercial buildings to measure and report their energy use and emissions. More than two dozen jurisdictions have already adopted building transparency and benchmarking policies, which can provide data for establishing building performance standards.

The U.S. could also tie financial assistance to state and local governments that implement building performance standards, Tatum and Majersik said. The federal government can also step up research and development in energy efficiency and electrification, as well as require building owners to disclose climate risk to better inform insurers and investors, Majersik added.

"If you have an energy hog building, and regulations are moving towards building performance standards and other steps to help drive improved performance of buildings, then there's a greater liability associated with owning a low-performing building," he said. "And for the market to work well, the market needs to have that information up front."

Pairing economic recovery with climate action

Select committee Democrats further noted that about one-third of U.S. states use pre-2009 building energy codes, leading to missed opportunities to reduce emissions in new construction. They recommended incentivizing states, communities and tribes to adopt the latest model codes and providing technical assistance, with a goal of rolling out net-zero building emissions codes throughout the nation by 2030.

There is a precedent: Under the American Recovery and Reinvestment Act of 2009, the federal government offered additional State Energy Program funding to states that adopted the most recent building energy codes and submitted implementation plans. Majersik said it would be easy to see a repeat of that in future stimulus funding.

The financial strain caused by the coronavirus pandemic could give building owners and developers pause about costly investments. However, Biden's infrastructure roadmap aims to double as an economic stimulus plan by putting Americans to work rebuilding the electric grid, weatherizing homes, installing rooftop solar panels and retrofitting heating systems.

Majersik said the "unfortunate reality of coronavirus" provides an opportunity to retrofit buildings, given that stay-at-home orders have created vacancies in commercial buildings. Majersik also noted that Biden oversaw the Recovery Through Retrofit program to address a lack of awareness, financing and skilled workers. The White House Council on Environmental Quality identified those issues as roadblocks to developing a U.S. market for home energy upgrades.

"That could provide a good model for investment in the building sector and job creation and fighting climate change. That could be married with building performance standards, so that not only are you seeing an influx of federal money in improving our buildings, but you could drive private investment in building owners' own buildings," Majersik said. "We think that could really be a good one-two punch to rev up the economy."