U.S. Secretary of Energy Jennifer M. Granholm has a calendar on her wall. She crosses out each passing day to remind herself how many guaranteed days left she has in office—days in which she can make a difference in our fight against the climate crisis. There's a refrain she often repeats when discussing the sector of our economy that uses more energy than any other: "America’s path to a net-zero carbon economy runs straight through our nation’s buildings," she says—and she's right.
America's nearly 130 million residential and commercial buildings use 39% of our nation's energy and 74% of its electricity, accounting for an even greater share of peak energy demand in some parts of the country during our most energy-hungry seasons. That enormous energy appetite is responsible for about 35% of our country's carbon emissions, released directly from the homes and offices we heat with fossil fuels and indirectly from the power plants that generate our electricity. If we're going to solve the climate crisis, we need to help households and commercial buildings across the country reduce their emissions and convert to cheaper, cleaner energy.
I like Secretary Granholm's line, not just because she's my boss, but because it serves as a reminder that some of the more familiar climate solutions, like renewable power systems and electric vehicles, are necessary components of a broader strategy. The fight for a better climate starts at home, in our workplaces, and in all the other indoor environments where we spend more than 90% of our lives. Thankfully, DOE is making progress in its effort to make buildings better—not just for the sake of the climate, but for also for the health, comfort and prosperity of the people living in them.
Yesterday, DOE announced another exciting step forward in the long journey to building a net-zero carbon economy. For the first time, the federal government has established substantial incentives to help builders make DOE-certified, Zero Energy Ready Homes (ZERH) their standard offering. To this point, our ZEHR program has set the federal government's highest standards for energy and environmental performance in newly built homes. Now, we are thrilled to formally raise those standards higher than ever before with Version 2 of our national program requirements for single-family homes.
The driving force behind the ZERH program is our belief that all homes should be built to this standard. Every certified ZERH is independently verified to meet program requirements, including certifications to both the Environmental Protection Agency's (EPA) Residential New Construction Program (ENERGY STAR®) and Indoor airPLUS (IAP) program. Together with DOE-funded advanced construction techniques, technological innovation, and other industry best practices, the ZERH program offers a standardized, comprehensive approach to home-building that's designed to be widely attainable and easily replicable.
With the announcement of the new standard, DOE has positioned the ZERH program for substantial growth. Here are just a few measures of the progress this program has facilitated in the buildings sector:
- Leading builders across the country have adopted ZERH requirements as their standard construction practices, offering superior homes at a competitive price point. There are now more than 12,000 certified ZERHs across the country. In 2022, the program received its first commitment from a Top-20 national builder to make ZERH certification a standard offering in 2023.
- An influx of DOE-funded advanced building technologies has provided more cost-effective strategies for improved building performance. As a result, many builders have increased the efficiency of their homes, as illustrated by decreasing average HERS scores each year based on RESNET data.
- All the while, new policies that support zero energy ready homes are passing into law at the federal, state, and local levels.
On the policy front, we've made considerable progress after many years of stagnation. President Biden's Inflation Reduction Act of 2022 (IRA) updated and extended the 45L tax credit for energy-efficient new homes for the next 10 years. In 2023, new homes certified to the ZERH Version 1 program requirements will be eligible for a $5,000 tax credit. The new ZERH Version 2 program requirements will be phased in for the 45L tax credit on certified homes acquired on or after Jan. 1, 2024. Additionally, more than 15 states and local governments reference the ZERH program in their low-income housing tax credits, incentive programs, and building codes. And over the past 10 years, more effective energy codes have also steadily raised the bar for minimum efficiency levels in buildings across the country, which pushes more builders to build ZERHs that meet or often exceed local building energy codes.
All these trends have positioned zero energy ready homes for significant growth—and it can't come soon enough. We hope our new requirements not only spur more builders to construct zero energy ready homes across the country but make them better and more accessible to anyone who wants to live in them.