Alliance President Kateri Callahan briefed policy and business leaders in Mexico on building energy codes in the U.S., and the public policy and multi-sector participation needed to create an effective code system that meets industry, consumer, environmental and governmental needs.

1. Cracking the Code:
g
The Key to Energy
Efficiency in Buildings
ffi i i ildi
Presentation by Kateri Callahan, President
Concreto LatinoAmerica 2009
“Model Code System” Panel Discussion:
Model Code System Panel Discussion:
Politics and Actions to Promote Energy Efficiency
August 18, 2009
August 18, 2009

2. Overview
 About the Alliance
 Why Energy Efficiency?
 Strong Public Policy: A U.S. Blueprint to Building
Strong Public Policy: A U S Blueprint to Building
Energy Efficiency
Codes/Standards
Education/Outreach
Incentives
RD&D

3. What is the
Alliance to Save Energy?
Alli t S E ?
 The Alliance to Save Energy promotes energy efficiency worldwide to achieve a healthier
economy, a cleaner environment and greater energy security.
economy a cleaner environment and greater energy security
- Non‐profit organization headquartered in U.S.; operations world‐wide
- Led by Senator Mark Pryor (D AR) and Jim Rogers, CEO of Duke Energy
Led by Senator Mark Pryor (D‐AR) and Jim Rogers, CEO of Duke Energy
- Includes 9 Members of Congress – Bi‐Cameral; Bi‐Partisan
- Also includes environmental, consumer, and trade associations heads, state and local policy
makers, corporate executives

4. Forging Alliances
Forging Alliances
 Business ▪ Government ▪ Public Interests
 Sponsorship and participation of more than 160 organizations
 Involvement by businesses in all economic sectors
 Initiatives underway in research, policy advocacy, education, technology
deployment, and communications

5. Why Energy Efficiency?
America’s Greatest Energy Resource
i ’
Reducing Energy Use, Saving Money, and Powering the domestic economy for
over 30 years:
America's Greatest Energy Resource
Energy Efficiency and Conservation Improvements Since 1973
Have Reduced Annual Energy Consumption by 50 Quads
Energy Efficiency and Conservation 50
Petroleum 40
Natural G
N t l Gas 24
Coal 23
Nuclear Electric Power 8
Wood, Waste, Alcohol 4
Conventional Hydroelectric 3
Geothermal, Solar and Wind 0.8
0 10 20 30 40 50 60
Quads
Alliance to Save Energy
August 2008
2007 Domestic Production Net Imports

6. Energy Efficiency: Enormous Potential
for S i
f Savings i ALL Sectors…
in S t
…and the
largest
opportunity
is in our
buildings!
Source: McKinsey Global Institute

7. Why Buildings?
Why Buildings?
 Buildings use 39% of
ld f
energy in U.S., cause
39% of CO2 emissions
 Efficient buildings…
…reduce stress on power grid and
natural gas supplies
…improve air quality and public health
…avoid global warming
avoid global warming
…save consumers money
Source: USGBC

8. The Challenge?
Market Distortions
M k t Di t ti
 Principal Agent or Split Incentives
Principal Agent or “Split Incentives”
- New versus existing buildings
- Home/Commercial builder versus buyer
- Landlord versus tenant
- Utility versus customer
 Transaction Costs
- Lack of information on life‐cycle cost for products and/or
paybacks for upgrades
b k f d
 Lack of Investment in RD&D and EE Programs

9. Deploying EE in the U.S.:
A Foundation of Public Policy
AF d ti f P bli P li
Codes/Standards
 To lock in savings for
Education/Outreach consumers and businesses
 To achieve market
To achieve market
penetration
Incentives
 To gain foothold in
To gain foothold in
market
RD&D
 To encourage
technological
technological
innovation

10. ARRA: Built on Sound Public Policy
ARRA B ilt S d P bli P li
 RD&D
– Smart Grid ($4.5 bill)
– DOE RD&D ($2.25 billion) Codes/Standards
Education/Outreach
 Incentives
I ti
Incentives
– Extension of tax incentives
 Education & Outreach
Education & Outreach RD&D
– State Energy Star rebate programs ($300 million)
 Codes & Standards
– “Conditions” USD $3.1 Billion to states on strong building
codes

11. Research, Development and
Deployment
Deplo ment
Net ZEB: Commercial Buildings Initiative (CBI)
 Goals:
- 2030: New construction net‐zero
- 2050: Entire stock net‐zero
 Comprehensive approach (R&D & deployment)
Comprehensive approach (R&D & deployment)
 Coordinate (initiate) national and local actions
- Measure, benchmark, disclose energy performance
- R&D for critical technologies and systems
- Demonstrate scalable, replicable system solutions
- Transform market: education/training, finance, appraisal, incentives,
codes, buyer demand‐pull
 Funding from Omnibus 2009 Appropriations bill:
Funding from Omnibus 2009 Appropriations bill:
- $33 million to initiate
- Plus about $50 million from ARRA (stimulus) funds

12. Incentives
New Homes
Builder tax credit up to $2,000 if 50% more efficient compared to 2004 IECCC
Builder tax credit ‐ up to $2 000 if 50% more efficient compared to 2004 IECCC
code; $1,000 for a home that saves 30% or qualifies for the Energy Star Homes
Program. (Through 2009)
Existing Homes
Homeowner tax credit – 30% of cost of installing building envelope components;
capped at $1,500 (Through 2010)
Commercial Buildings
Deduction up to $1 80/sq ft for buildings designed to use 50% less energy than
up to $1.80/sq.ft. for buildings designed to use 50% less energy than
ASHRAE‐90.1‐2001 (Through 2013)
Public Buildings: Assignable deduction!

13. Use Incentives, Education to
Penetrate th M k t
P t t the Market…
ENERGY STAR
Qualified Homes
Gaining Market
Share (2008)
Source:
www.energystar.gov

14. A “Game Changer”:
Building Energy Codes
Building Energy Codes
 Makes homes more affordable
M k h ff d bl
 Overcomes economic barriers
 If all states improve codes by 30% over today’s
energy performance, the savings by 2030 equal:
- 3 quadrillion Btu in building energy use (5% of current)
- $25 billion in annual consumer energy bills
- 150 million tons of CO2 (6 billion tons through 2050)
150 million tons of CO (6 billion tons through 2050)

15. How U.S. Codes are Set
How U S Codes are Set
 States set codes based on national
models
- Independent professional organizations set
national model building codes
- DOE determines whether updates save energy
- States adopt codes, sometimes with changes
States adopt codes sometimes with changes
 States required to consider residential
model
 States required to adopt commercial
model
 But...codes can t happen
But codes can’t happen
overnight...

17. Driving to “Net-Zero” Through
Building Energ
B ilding Energy Codes
 National energy codes with aggressive
energy savings targets:
- 30% savings in 1 year
- 50% savings in 2014 (homes), 2015 (comm.)
- 5% more savings every 3 years
i
 ICC and ASHRAE get first
chance, with DOE h l
h ith help
 DOE sets if they don’t

18. Building Energy Codes:
Adoption and Compliance
 Direct states to adopt and improve
compliance
- 1 year to adopt
- 90% of building space complies within 5 y
g p p years
- DOE help: funding to states for code
implementation
 Backstop: Federal code with federal
enforcement

19. Codes Legislation: Status
Codes : Status
 In Waxman‐Markey Climate Bill (“ACES”)
y ( )
 In Senate Energy Bill (“ACELA”)
 A Strong Legislative History in 110th Congress
- In energy bills:
 Energy bills that passed the House (H.R. 3221, 6899)
 Senate Leadership Amendment (S. Amdt. 5135)
 Rep. Inslee bill (H.R. 6739)
R I l bill (H R 6739)
- In climate bills:
 Lieberman‐Warner Senate bill (S. 2191, S. 3036, S. Amdt. 4825)
 Dingell Boucher House climate bill draft
Dingell‐Boucher House climate bill draft
 Rep. Markey bill (iCAP—H.R. 6186)
- In stand‐alone bills:
 Dingell‐Boucher bill (H.R. 6729)
 Sen. Schumer bill (S. 2078, S. Amdt. 1604)

20. Climate & Energy Bill Outlook
Climate & Energy Bill Outlook
 Senate
- Has Adopted Energy “Piece” with code provisions
- Will consider climate “Piece” in the Fall
 House
- Adopted Climate & Energy bill with code provisions
 Additional Support for Energy Efficiency in legislation
Additional Support for Energy Efficiency in legislation
- Significant Funding through CO2 Allowances (House bill)
- Building Labeling Programs (both)
Building Labeling Programs (both)
- Utility Energy Efficiency Resource Standards (both)
- Innovative Finance Programs (both)
- Appliance Standards (both)
- And much more…..

21. Forecast
 Promising legislation for the
expansion of energy efficiency in
buildings and of building codes
b ildi d f b ildi d
- Advantages of Stimulus
- More funds for DOE
More funds for DOE
- American Clean Energy and Security
Act (ACES)
 The Future of Codes:
y
Universal and dynamic?

22. Recognizing the efforts of those working to advance
energy efficiency.
Award Winners:
Deval Patrick, Governor of Massachusetts
Dr. Steven Chu, Secretary of Energy, DOE
D S Ch S fE DOE
U.S. Department of Housing and Urban Development
Aquarium of the Pacific
Warren County Public Schools (Kentucky)
CONAVI and INFONAVIT
3M Company
3M Company

23. Thank you!
Thank you!
For More Information….
Kateri Callahan
President
Alliance to Save Energy
1850 M Street, NW
1850 M Street NW
Washington, D.C. 20036
kcallahan@ase.org
www.ase.org
202.857.0666