Improved Energy Codes, Diminishing Return, & a New Performance Baseline

energy code diminishing return new performance baseline energy star logoIt wasn’t long ago that the EPA’s ENERGY STAR New Homes Program created an uproar in the residential building community by releasing Version 3.0 of it’s volunteer 3rd party verification program. One of the biggest crack downs in the new version was it’s requirement for HVAC Contractors to test and verify their installations of the heating and air conditioning equipment in a home being certified. Other major changes included the addition of a Water Management Builder Checklist, higher performance building components (walls, windows, etc), building tightness and fresh air ventilation. One of the reasons for such an increase in performance and durability requirements, according to the former director of the ENERGY STAR New Homes program, Sam Rashkin, is to stay ahead of the energy codes that are quickly increasing the requirements for more energy efficient and durable buildings.

To give you an idea of just how fast things are moving toward energy efficient design and construction, the 2009 IECC (adopted in 32 states) is 15% more strict than the 2006 (still in effect in 9 states), and the 2012 IECC (adopted only in Maryland) is 15% more strict than 2009. We don’t know, yet, if the 2015 will be another 15% more strict than the 2012, but we do know there is a point where more is not necessarily better. In fact, the point of diminishing return on the amount insulation, building tightness, window performance, and all other building components is rapidly approaching in the codes. They’re getting close to the point where more will no longer improve performance, it may only add unnecessary cost and complexity. I think the codes are trying to reach that point as soon as possible, so we can be at a new performance baseline for all new homes.

energy code diminishing return new performance baseline 2012 IECCAt a recent panel discussion at Southface where we discussed current & future energy codes, I suggested that as the codes reach this new baseline of performance, we will see the increase in requirements start to taper off slightly, but that we will continue to see gradual improvements until the day that all new buildings are averaging zero energy use (net zero), not using any energy at all, or so efficient that they are producing more energy than they consume (positive energy).

So, where is the point of diminishing return?

The International Energy Conservation Code (IECC) requirement for residential above grade exterior walls in climate zones 3 & 4 went from R-13 (2009 IECC) to the option of either R-13 with R-5 continuous insulation or R-20 (2012 IECC). The infiltration rate has gone from 7 ach50 in 2009 to 5 ach50 in climate zones 1 & 2 and 3 ach50 in all other zones in 2012. In climate zone 1, SHGC (solar heat gain coefficient) for windows has gone from 1.2 to 0.65. These are just a few of the many changes, and there are plenty of resources that give a complete overview of all the changes. Martin Holladay, of Green Building Advisor, has a fairly in depth review here, with lots of great discussion.

What these improvements are doing is setting the performance of building components to the point where additional improvement will have less and less effect on the performance of the building.

One of the main targets of the energy code is to reduce the heat loss and gain in buildings, so improving thermal performance of the building makes sense. It reduces the amount of heating and cooling the HVAC systems have to do, which reduces the amount of energy we use. (HVAC systems are one of the largest sources of energy use in a home).

At a certain point, though, the insulation in the walls, the SHGC of the windows, and the amount of air leakage in the building shell ceases to significantly reduce that heat loss and gain. In climate zone 3, R-20 is about at that point. In climate zone 1, a U-value of 0.65 in the windows is as low as you need to go. And, an infiltration rate lower than 3 ach50 doesn’t always offer enough improvement to justify the effort. Joe Lstiburek of Building Science Corporation wrote a great piece about this infiltration threshold.

The point of diminishing return applies to most building components, the heating ventilation and air conditioning (HVAC) system, and many design or construction strategies addressed in the code. It doesn’t mean that we should stop at any of these values. I am only suggesting that we take a close look at the benefits of the improvements before just blindly adding more insulation to walls when it may only cost homeowners more money to install, and have a very long return on investment.

How do we do know when to stop?

Energy modeling is a decent and acceptable way to project the amount of improvement that any these strategies have on the performance of a house. There are a lot of modeling tools available, but a few that are generally accepted as reasonably accurate. Here are few that are widely used and have been given a “blessing” by the industry.

Final Notes

Among all of the requirements in the code, and among all improvements that can be done to a home or building, decreasing the amount of infiltration (no matter where the home is in the world), can have the biggest impact on the heat losses and gains. That’s not to say don’t put insulation in the walls, floors or ceiling. I’m just saying it’s a really good place to start! And, don’t forget to ventilate properly when you build tight!

Also, all of these codes are written with good intention and it’s really changing the industry. But, if we don’t have proper enforcement of them, we may as well not have them at all. Here is a great post by Carl Seville, Seville Consulting, about this topic.

Thanks for reading! Feel free to comment and discuss. It’s a great way to find solutions!

-Written by Chris Laumer-Giddens

9 Responses so far.

  1. Great commentary, the issue of push-back on upgraded codes and even voluntary rating systems, including Energy Star v 3 and LEED v 4 is significant if the higher standards reduce builder and developer participation, or if jurisdictions delay updating codes. Some utilities and states have already abandoned Energy Star and may abandon LEED precisely because they believe the programs have lost a sense of balance between cost and benefit.

  2. Milan Jurich says:

    Chris, nice article. Re: diminishing returns, at what point is it overkill to spec out premium HVAC components if the house is insulated well and ventilated right. Spec for a new build in zone 5 will apply the Huber Zip R 6.6 sheathing outside of the walls which will be filled with R-15 of BIB cellulose. R-49 cellulose in the attic and type IX EPS outside the poured wall foundation as well as under and around the basement slab. Tightly sealed with an Ultimateair HRV featuring dedicated returns. 3400 sq. ft. home with HVAC system featuring Carrier’s best natural gas furnace (98) and their best heat pump (20) with modulating controls … high tech which is supposed to provide for great humidity control. At what point though does it become overkill by spec’ing the most premium product as the load requirements are diminished on a tight home? Appreciate your thoughts.

  3. Hi, Milan,

    Great question.

    I think you have it right. The better the house performs, the longer the payback on super efficient equipment. If your heat loss and gain is already so low, the equipment is doing a lot less work to heat and cool the house.

    Another way to look at it is, if there’s not a lot of energy being used in the first place to heat and cool the home, there is less of a need to “upgrade” to do it super efficiently efficiently. The net savings with high performance equipment (20 SEER +) in a high performance home is not much greater than with lower efficiency equipment (e.g. 14-16 SEER) in that same home.

    In terms of R.O.I., it will be longer on the higher efficiency equipment in a high performance home. So, in terms of diminishing return, there is a point where the higher efficiency may make complete financial sense. That’s not to say, though, that even that small bit of extra energy saved by going with 20 SEER isn’t worth it for the greater good. It all adds up!

    My biggest concern in this scenario would be having cooling equipment too large for the small loads. Most manufacturers don’t offer heat pumps smaller than 2-tons with 16 SEER and higher equipment. If its too large, you could have trouble satisfying the latent loads (removing moisture), which could result in short-cycling.

    2-stage equipment is an option, but mini-splits may be the better choice. (they come ceiling concealed ducted AND ductless). It comes down to what the loads are, and the capacities of the equipment.

    Hope this is helpful.


  4. Good points, Fernando.

    Participation is one thing, and believing in it is another. There are many participants that have their eye on a prize (literally and figuratively) rather than paying attention to the intention of both the code and the programs.
    I’ve worked mostly with clients (builders, homeowners, raters, etc.) that certification is an afterthought because we’re focused simply on good design and construction. Everything we’re doing with them exceeds program requirements on building performance and sustainability. For clients like this, following codes and programs aren’t “necessary” to the extent that they are exceeding them in every way, already. Getting a permit or certification is or would be a formality, not the reward. The performance, comfort and energy savings is their reward.

    If the would-be participants could understand and believe in “what it’s all for”, we would really make some progress. In fact, I believe we would see even more improvements to the code sooner rather than later, and programs like ESTAR 3 and LEED v4 would be welcomed.

    In the meantime, we’ll keep up our standards and keep promoting them through sharing real world results. Like, for example, each home we do get’s better in performance, while the increased cost for that higher performance is decreasing (from about 3-5% down to 1-4%).

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