How energy efficiency programs, codes evolve

Improving energy efficiency and reducing energy use in commercial buildings are instrumental

By Bill Kosik, PE, CEM, Oak Park, Illinois August 1, 2022


Learning Objectives

  • Discover the catalysts that shaped the first federal energy efficiency and environmental protection policies, setting up the foundation for state energy plans.
  • Understand an SEP’s primary structure and processes and how it incentivizes building owners and operators, ultimately reducing energy use and increasing energy efficiency.
  • Based on examples of energy efficiency measures, determine their impact on reducing consumption.
  • Ascertain how state energy efficiency codes, based on design and operation standards, are crucial to make sure the measures incorporate the latest energy efficiency standards.


For utilities, state and federal government, the term state energy plan or SEP, has a specific meaning. A SEP is a comprehensive energy plan that covers many topics that are beyond the scope of this article such as energy generation, transportation, demographics, economics and policy. And energy efficiency in buildings is a crucial part of the overall energy efficiency equation, consuming 40% of the total electrical energy generated. For this article, SEP refers to energy efficiency plans in general. This includes utility-run programs that incentivize building owners for improving energy efficiency.

The sections on the technical resource manual, work papers and measures describe what they are, what their purpose is and how they are used. This is in lieu of a detailed examination of the engineering behind the calculations or in which scenarios the measures are used. This in keeping with the central theme of a high-level narrative covering a wide range of significant topics related to energy efficiency.

Similarly, the parts of the article that discuss energy codes provide insight into how they began, how they helped shape the approach to energy efficiency in buildings and how they are a vanguard into future energy use targets.

The last part of the article deals with current and future approaches and tools that are being used (or are in a pilot program) that show promise to improve the accuracy and accountability when estimating energy reductions from energy efficiency measures.

Energy efficiency programs

When analyzing ways to reduce energy consumption in a commercial building, there are several interconnected factors that determine energy usage, often in complex and interrelated ways. This necessitates robust energy modeling (using accurate building characteristics) and analyzing the results as defined in the energy standards.

A state building code is dedicated to energy efficiency and defining minimum energy performance for buildings. This is an area where states differ in the specific standard or model code, they have incorporated into their building codes. Model codes and energy efficiency standards that are “code ready” have many similarities in the intent and structure but have significant differences in the minimum efficiency numbers. Even using the same energy efficiency standard, but different editions, will yield large differences in the efficiency requirements.

These discrepancies are just some of the challenges on how energy savings are calculated. Some state energy programs use standards that are two or three editions behind the current standard. And unless there is a directive authorizing the use of newer energy standards, the estimated energy savings is less using the older standard because the baseline is less stringent.

An additional facet of state energy codes using different versions of the same energy standard is transferability. When working on projects or energy efficiency programs in different states, the energy engineer must use the proper minimum energy efficiency requirements for the different states, which may limit the ability to transfer best practices and knowledge sharing among the different jurisdictions.

Figure 1: ASHRAE 90.1 Energy Standard 2004 to 2019 – In just 15 years, standards for lighting efficiency increased an average of 40%. Courtesy: Bill Kosik

ASHRAE Standard 90.1

A couple of years after the 1973 energy crisis, ASHRAE issued its first compendium on energy efficiency, Standard 90-1975: Energy Conservation in New Building Design. This was the first industry-developed, publicly approved standard that provided minimum efficiency requirements for building components. Since then, it has become one of the most used building efficiency standards worldwide.

Since its first release, the standard has been renamed to Standard 90.1 and has been put on a three-year maintenance cycle. New releases of the 90.1 standard will have undergone changes that increase energy efficiency requirements from the previous edition. It is now called ASHRAE Standard 90.1: Energy Standard for Buildings Except Low-Rise Residential Buildings.

Lighting power density, which indicates minimum allowable efficiency of lighting systems, is a good example of revisions resulting from ASHRAE’s triennial review cycle of Standard 90.1. LPD is the lighting efficiency metric for lighting (watts) divided by the area of the building (square feet), expressed in units of watts per square foot (watts/square feet). When comparing the maximum allowable LPDs in the 1999 edition to the 2019 editions, ASHRAE has established very significant efficiency increases over the past two decades. From 1999 to 2019, ASHRAE’s the energy efficiency values derived from the LPD have increased more than 150%. (This is averaged over 11 building types that different uses and occupancy.)

Analyzing a small sample of HVAC systems included in Standard 90.1 showed marked increases minimum efficiency requirements from1999 to 2019.

  • Air-cooled direct expansion (single package or split-system) unitary air conditioners 20 tons and greater — minimum efficiency increased by 32%. (Regulations starting in 2023 will increase the change to 50%.)
  • Minimum efficiency requirements for packaged air-cooled water chillers (150 tons and greater) increased by 21%.
  • Similarly, the requirements for water-cooled packaged centrifugal water chillers increased by 18%.

Across 11 commercial building types, the percent of total building annual energy use (kilowatt-hour) for lighting and HVAC systems combined have an average of 47%. Commercial buildings require a lot of energy for lighting, cooling and ventilation, so when minimum energy performance requirements steadily increase (as those in ASHRAE 90.1), it is possible to see a commensurate amount of energy use reduction.

International Green Construction Code

Most building and energy codes are written to reduce energy use, protect the public’s safety and ensure the integrity of building systems. One code, the International Green Construction Code, known as IgCC, takes this a step further and includes other areas that address environmental sustainability and the “cradle to cradle” cycle of a building.

Before the release of the IgCC in 2018, ASHRAE Standard 189.1: Standard for the Design of High-Performance Green Buildings was used as a mechanism for a voluntary code compliance path. Standard 189.1 has been wholly incorporated into the IgCC, resulting in a unified code that will help municipalities in the adoption and enforcement of a green building code. Provisions for environmental sustainability also are tightly integrated in the code.

The IgCC establishes minimum requirements for green and high-performance buildings, providing baseline benefits and a foundation for applying green complementary and voluntary systems. The IgCC is written in code-ready language, setting forth minimum criteria for high-performance building projects.

The IgCC is sometimes referred to as a green construction code that, like most building codes, ensures the safety, health and welfare of the general public, and simultaneously encourages innovation and promotes the use of low-impact materials and construction techniques. The code language, technical data and regulatory framework is available in assisting governments and municipalities as they endeavor to develop a building code based on the IgCC.

U.S. Department of Energy ComStock

Understanding the breakdown of the different electrical loads in a building will make the energy estimating processes, whether used for incentive programs or certifying energy compliance, much more accurate, repeatable and transparent. These datasets will tell the energy engineer not only the electrical load, but its disposition throughout the day. Combine this with data on specific building type, size and location results in a very powerful tool.

The National Renewable Energy Lab along with other national labs has been working on projects called U.S. Department of Energy ComStock and ResStock, which consist of a portfolio of commercial and residential buildings, respectively. ComStock is a highly granular, bottom-up model that uses multiple data sources, statistical sampling methods and advanced building energy simulations to estimate the annual sub-hourly energy consumption of the commercial building stock across the United States.

The dataset is the output of approximately 350,000 ComStock building energy models. The output of each building energy model is one year of energy consumption in 15-minute intervals, separated into end-use categories. ComStock identifies the impact of efficiency measures: how much energy do efficiency measures save; where or in what use cases do measures save energy; when or at what time of day do savings occur; and which building stock segments have the biggest savings potential.

Energy efficiency strategies

As the energy market transformation continues to embrace energy efficiency programs, the community is also looking at decarbonization and water-use efficiency, both of which are directly linked with current forms of electricity generation on the utility scale.

The process of planning, designing, constructing, operating and maintain a building has also gone through a major transformation over the past 20 years. This process has shifted away from a linear, fragmented approach that relies on handing off information rather than brainstorming and collaborating.

This transformation required a dedicated, forward-thinking group of individuals from disparate industries and diverse professional backgrounds. This early thinking — which very quickly formed a movement and spawned new methods for incorporating energy efficiency and environmental stewardship into commercial building design — required ideation that went beyond how the parts and pieces of a building are assembled. It led to a synergistic and collaborative awareness on how buildings impact local communities, (both now and 50 years from now), how the interplay of the lighting, heating, ventilation and air conditioning and building envelope (walls, windows, roof) can reduce energy and how the building site and HVAC systems impact water usage.

The broader view of a building must include how and how much energy is used and what are the sources. Is it advantageous to install photovoltaic panels to create electricity or use power generated by a local wind farm? What will be the source of energy for the building? Will the building consume less electricity (compared to a “standard” building)? This is the confluence of the many flows that inform how we build new buildings and how we optimize the implementation of energy efficiency measures.

The goal? Reducing energy use and shifting away from our reliance on fossil-fuel based electricity generation. With that brings a reduction in site and source water consumption. These things continue us down the path forward, where decisions must be judged within the framework and context of decarbonization and energy surety for our commercial building stock.

Electricity use reduction

In the United States, one of the first programs developed by the federal government that spawned several broader energy efficiency initiatives is the 1977 U.S. National Energy Plan. This was developed as a blueprint identifying energy efficiency as a priority because “conservation is the quickest, cheapest, most practical source of energy.” This plan became the basis for many other building energy use reduction programs. Federal government-led initiatives will commonly transfer to the state and local authorities who leverage the federal work, making it applicable to their jurisdictional requirements.

In 1993, one such program was introduced by the U.S. Environmental Protection Agency. This is the year EPA rolled out a pilot program called Energy Star Buildings Program, highlighting energy efficient buildings. In the first year, 23 building owners participated in the program. In 2020 alone, more than 270,000 commercial properties were registered with the EPA’s Portfolio Manager. Building owners require tools, like those developed by the EPA, to measure and track their energy and water use, material use and waste.

It is clear that electricity is a significant source of energy in the United States; it is used to power homes, business and industry and has a major impact on global warming (see Figure 2). In 2020, the combustion of fossil fuels to generate electricity was the second largest source of CO2 emissions in the U.S., accounting for about 31% of total national CO2 emissions and 24% of total U.S. greenhouse gas, aka GHG, emissions.

Figure 2: United States historic emissions and projected emissions under the 2050 goal for net-zero. The US has also set a goal for 100% clean electricity in 2035. This is critical to support decarbonization in the electricity sector, which will in turn help the U.S. reach its 2030 and 2050 goals. Courtesy: The Long-Term Strategy of the United States: Pathways to Net-Zero Greenhouse Gas Emissions by 2050. Published by the United States Department of State

This is decarbonization and how it applies to buildings. Reducing energy consumption not only saves on customer utility costs, it also reduces the amount of electricity that is needed. It is evident that the reduction in electricity use does not have a direct kilowatt-to-kilowatt relationship with the amount of power generation, but when done at scale, it does have an impact. When reviewing plans to reduce GHG emissions proposed by the DOE (or other energy-related government agencies), keep in mind that in 2019, CO2 emissions accounted for about 80% of total U.S. GHG emissions.

The DOE and State Energy Plans

Building energy efficiency programs are just one aspect of a comprehensive state energy plan. The DOE works closely with states in developing a SEP. In addition to building energy efficiency, the SEP will have many additional components that will differ state to state. But considering buildings consume 40% of the total electrical sales, efficiency programs for buildings are one of the top energy reduction strategies.

The DOE recommends an approach that focuses on baseline energy use for all sectors and fuel types. This is where plans will differ among states — some will have a high concentration of industrial buildings, while others will have a more diverse mix of building types. DOE hosts a catalog of existing state and local studies and energy plan documents, certainly extremely resources.

And, as the DOE points out, the process of creating or improving an SEP is a lengthy one, potentially spanning 5 to 10 years. Although some of the initiatives could be phased in over time. By the time the planning is complete, the results of the initiatives can be used as valuable case studies for the next planning cycle.

National Association of State Energy Officials

The National Association of State Energy Officials publishes a document, “State Energy Planning Guidelines,” which supplies detailed information on how to develop and execute an SEP plan, including a roadmap on how to improve building energy efficiency. Keeping electricity and natural gas prices affordable to the consumers is a high priority goal. And, any actions taken to achieve these goals should not have a negative impact on the current level of service for the end-user (utility customer).

In the planning process to generate a comprehensive energy plan, it is vital to review data sources’ basic energy and related economic information; demographics; and environmental and local, state and federal sources. Also, data is collected on the state’s energy profile, including statistics about energy usage by sector and end user, energy prices and expenditures, fuel imports and exports, transmission and distribution infrastructure, generation and production.

Coordination with and consideration of stakeholder organizations that need to be involved in the planning process is a common theme running through NASEO’s guidelines. For example, the governor, legislators and state commissions and agencies, consumer advocates and research entities represent leadership for the public sector. The private sector organizations will include major industry groups such as energy producers, academic/research institutions, energy-focused nonprofit organizations, environmental justice societies and community groups.

SEPs drive the energy-efficiency market

SEPs by their nature present opportunities for collaborating with other state government agencies. For example, reducing energy use is a big part of environmental efforts to improve water quality and reduce outdoor air particulates. Similarly, using detailed energy and economic modeling and analysis shows how energy efficiency programs can increase and job creation and private investment, both of which have a positive impact on the state economy.

Energy efficient products with low market penetration are specifically used in some incentive programs. This is done to stimulate the marketplace and stay ahead of future codes that require efficiency increases. Either by direct discounts, rebates or monetary incentives, the public increases its awareness of the product and begins to understand the potential savings in electricity bills. As the cycle continues, the product becomes more well-known and a market is built outside of the incentive programs.

A good example of this is the LED bulb, which initially had prohibitive prices; only a small percentage of homeowners could afford LEDs (see Figure 3). After some time, the manufacturers lowered the cost to stimulate sales, but the big push came when utilities started offering incentives to the public. It’s not plausible to say that the incentive programs alone created a significant drop in the price of LED lighting, but the programs can certainly take credit for some part.

Figure 3: Characterization energy efficient lighting market. In 2020, the price of LED lighting was 85% less than the same lighting in 2010. It is projected by 2035 the price will drop by over 90% compared with 2010. The significant price reductions are a major contributing factor to the growth of the installed base. Courtesy: Energy Savings Forecast of Solid-State Lighting in General Illumination Applications December 2019

There is a dual benefit when private sector building owners take advantage the incentive programs. The ability to qualify for a monetary incentive and at the same time, reduce energy consumption, also contributes to their annual goal for reducing indirect GHG emissions. While not every energy efficiency improvement will reduce indirect GHG emissions, most of them will have a direct correlation to utility’s generating requirements.

There is not universal agreement with the effectiveness of state energy programs. Critics of the ratepayer-funded incentive plans claim the actual savings is not as much as initially predicted and the costs to implement energy efficiency programs are greater than what was reported. Regardless of specific issues, the data produced by these critics may hold some kernels of wisdom that could assist in planning efforts.

Technical resource manual

The technical core of any energy efficiency incentive program is the technical resource manual, or TRM. Depending on the state, a TRM can be 100 or 1,200 pages long. But not all TRMs are created equally. In addition to the measures, there can be information on previous versions of the TRM, the legislative actions that make the TRM part of state government policy or details on the process of developing the TRM.

The TRM is essentially a how-to manual defining the tools and techniques used when analyzing energy reduction in a building. The primary documentation in the TRM are workpapers and measures. A workpaper consists of details on how to apply assumptions, variables and algorithms used in determining energy savings. In most cases, a TRM will have references to external technical documents that are resources for the energy engineer, providing further context and in-depth understanding of the concepts. Workpapers and energy efficiency measures don’t necessarily have a one-to-one relationship; one workpaper can apply to several measures.

The timeline and process for managing the TRM content, including updates to the workpapers and measures, is defined in the state legislation and is typically on a three-year cycle.

TRMs can be used exclusively by a state or by utilities, limited to their service territory. But a TRM is more than a compendium of values and algorithms, it also sets the “ground rules” on documentation, procedures and verification. It is the definitive source for an energy reduction program. It is approved by the state commission or agency giving it a legal framework. All these items ensure that things will be done in a consistent and fair way because the TRM could be used in different incentive programs.

Energy efficiency measurements

Most states face similar challenges in developing energy efficiency incentive programs and developing technical material to be used in the TRM. It is quite common to see references to another state’s TRMs used as the basis for a different state’s measure. States will develop formal energy efficiency coalitions that are specifically designed for sharing experiences, collaboration and learning opportunities amongst the members.

An example of this is the Midwest Energy Efficiency Alliance. The MEEA “is a collaborative network advancing energy efficiency in the Midwest to support sustainable economic development and environmental preservation.” MEEA consists of 13 states and “drives the adoption of sound energy policy, promotes and pilots emerging technologies and facilitates program best practices.”

If a TRM is the brains, measures are the brawn. At the end of the entire process, measures are used to define the energy use savings and the resulting customer incentive. Some measures have some overlap with the workpapers, but this is usually done to clarify the process and to simplify some of the steps. There are different types of measures, each used in specific situations.

These are measures that are well-understood with documented experience that indicates that there is a strong central tendency in the distribution of savings across installations. Also, measures for which savings or calculations can be developed from reliable data sources and analytical methods. It is used for straightforward cases like lighting replacement where the incentive is calculated using the estimated kilowatt-hour reduction. The incentive is typically based on dollar per energy reduction unit.

Certain HVAC efficiency upgrades use a slightly different deemed savings measure. This type of measure has the savings calculations incorporated into the deemed savings values. Instead of a dollar per energy savings, dollar per ton or dollar per cubic feet per minute is used. This is a common approach used for efficiency upgrades consisting of a one-for-one equipment replacement.

Air handling units, chillers, pumps, split-system air conditioning units and motors are some examples. Some deemed savings measures have some variables that need to be defined in the calculation process.

In practice, the two most used variables are weather data and operating hours and these can be provided in the TRM as deemed variables. While deemed savings measures are clear-cut and give the building owner a solid method and clear rules, it also is the least granular of the different type of savings methods.

Calculating energy efficiency data

As its name implies, partially deemed savings measures are part deemed and part custom (see below) measure. The “deemed” portion of the measure is usually a component or variable that stays constant across different building types, climate and types of building systems. The deemed variables can be a fixed value or a range of values that are listed in the workpaper or measure.

The specific measure will define how much is “custom” as a percent of the savings calculations. This is the “deemed to custom” ratio. (There is no real technical differentiation between deemed and custom — it is used here to illustrate the concept.) This type of measure is suited for situations where the variables are difficult to obtain or could have a wide range of values. These are the deemed variables use in the measure.

Moving toward the “custom side” of the measure, information that the building owner can readily supply or obtain with little difficulty is used in the savings calculations. Hours of occupancy and building system operating schedules are common. A calculation in a measure that uses hours of operation as one of the variables will most likely determine the installed maximum power in kilowatts and the energy consumption over a period (kilowatt-hour).

This type of measure demonstrates how the partially deemed measure provides more granularity compared to a deemed measure. A peak load does not stay constant over time due to building occupancy, weather and other variables will affect the power use. If actual operating data is not available, it is common that a partially deemed measure will include a method to simulate the changes in power over time, resulting in a higher degree of precision in the calculation methodology.

If it is not possible to obtain operational data for a building, there are other methods that use industry-accepted hours of use data and load shapes for different building types. This method applies more precision to the duration used in calculating deemed savings; it is classified as partially deemed because it adds a layer of data (percent of time or load), which theoretically simulates the operation of a building.

Although there has been significant research on this topic and data are readily available, operating hours, load shapes, coincident factors and persistence of savings are areas where additional research would be very helpful for improving the reliability of energy savings values.

Calculating energy use

Custom measures are defined in the TRM as ones where there are no existing deemed or partially deemed measures. Custom measures are also used for new construction or installation of systems or equipment that do not have a reference in the TRM.

Custom measures could also include whole building modelling that demonstrates the energy reduction of interrelated building systems, not just the equipment itself. The custom application also requires a higher level of review and analysis to validate the building owner’s energy efficiency calculations (see Figure 4).

Figure 4: Electricity savings from a utility energy efficiency program. This is the total annual electricity that is saved from customer participation in a utility-run energy efficiency incentive program. In this example, all the office buildings that are in the program saved a combined total of 76,908 MWh. If a building category shows low energy reductions (e.g., restaurants) it tends to be an indicator of lower customer participation, not energy savings potential. Courtesy: Bill Kosik

The custom measure, if executed properly, becomes the most accurate and reliable calculation of baseline and proposed energy use. Many in the energy efficiency industry, especially the DOE and other government agencies focused on energy use, see some of the process used in a custom measure as the future of how we estimate energy savings.

However, beyond the basics of the building type, size, electrical load, etc. there is a host of analytics currently in development. In addition to providing specific data on building operations that is a hybrid of field data and computation, a primary goal is to have the states and local jurisdictions use it as templates, ensuring some level of uniformity in how energy efficiency is calculated and reported.

Future energy efficiency goals

Based on research, ratepayer-funded programs from a utility continues to grow at an accelerated rate from 2020 to 2025. This is caused by the continued increase of the state policies that are favorable toward energy efficiency programs, especially in the South and Midwest. Furthermore, it is estimated that any decline in SEP funding will likely be offset by the growth of programs in states that up until now showed a moderate level of interest.

The success of the state energy programs is dependent on several factors, among them: the economy; technological advances in products, equipment and systems; efficiency standards borne out in more stringent energy codes for buildings; new federal standards; and end-use standards for equipment and appliances. SEPs need to have flexibility in addressing these inflection points and adjust according to support (and grow) energy efficiency programs.

The private sector, primarily the electric and natural gas utilities, plays a key role in energy efficiency programs. Pilot programs run by the utilities, test and validate innovative building equipment and systems that have low market penetration. Utilities are also working with the state agencies to improve the current energy efficiency incentive programs.

These are some examples of how, if executed properly, the public-private sector collaboration will continue to reduce overall energy use while creating new markets for innovative products. And all of these activities when viewed holistically are moving us down the path leading to energy surety, improved efficiency and decarbonization in the commercial building sector.

Author Bio: Bill Kosik is a senior energy engineer and an industry-recognized leader in energy efficiency for the built environment with an expertise in data centers. He is a member of the Consulting-Specifying Engineer editorial advisory board.