Building Materials, Energy Efficiency, and the American Recovery and Reinvestment Act

This article is based on testimony given before the U.S. House of Representatives Education and Labor Subcommittee on Workforce Protection on Green Jobs and their Role in our Economic Recovery, March 31, 2009. Original testimony available online at http://edlabor.house.gov/documents/111/pdf/testimony/ 2009033 1RobinRoyTestimony.pdf.

The challenge of the American Recovery and Reinvestment Act is to align policy, advance science, and educate consumers.

Historically, the phrases “building materials” and “rapidly advancing technology” have rarely appeared in the same sentence. In fact, many have argued that these terms are oxymoronic. Traditional gypsum drywall, for example, has not changed for more than a century, and changes in glass have been introduced only occasionally, and then very gradually, even though significant technology-driven improvements (e.g., low-emissivity [low-E] coatings and inert-gas fill) have been made.

Today, as everyone is looking for ways to make our country more energy efficient, we tend to overlook these ubiquitous building materials in favor of advanced technologies for, say, automobiles and electricity generation. However, if you take into account both building operations and materials manufacturing, the “built environment” is responsible for 52 percent of greenhouse gas emissions worldwide, far more than automobiles or transportation in general (DOE, 2009). In fact, advancing the science of building materials will create opportunities for enormous energy savings and carbon reduction in the $1.3 trillion U.S. construction market.

The American Recovery and Reinvestment Act (ARRA) acknowledges this national priority with initiatives such as low-income weatherization, tax credits for energy improvements in private homes, energy refurbishment of public and assisted housing and schools, and energy improvements in local, state, and federal government buildings. The opportunity, and challenge, presented by ARRA is to align public policy, promote and support science, and educate consumers to maximize the benefits of these initiatives.

High-Performance Windows

Cost Benefits and Job Creation

According to Marc LaFrance, manager of the U.S. Department of Energy (DOE) Building Envelope and Windows R&D Programs, “Enhancing window effi-ciency is a major step forward in achieving net-zero homes. . . . Windows in the United States are costing consumers approximately $35 billion per year in energy. The next generation of windows could reduce this by more than half” (Serious Materials, 2008). In fact, energy lost through inefficient windows represents 30 percent of a building’s heating and cooling energy, signifying an annual impact of 4.1 quadrillion BTUs (quads) of primary energy (Arasteh et al., 2006). Our research, using nationally recognized building-energy simulation models (e.g., RESFEN 5.0 [LBNL, 2009b]) shows that we can solve this problem today with highly insulating windows that can reduce heating and cooling costs by as much as 50 percent (Serious Materials, 2009).

Current strategies for reducing heat loss through windows involve a combination of technologies acting in harmony. The first and most common approach is the dual-pane, insulated-glass unit in which one or both glass panes have a unique, low-E coating to reflect infrared energy. The space between the glass panes is often filled with an inert gas (e.g., argon or krypton) to improve performance. More advanced systems have triple or quadruple glazing (with the additional central layers suspended) and low-E coated films. These designs can double or even triple the thermal performance of the window.

For the entire window to achieve the performance of the insulated, multipane glass unit, today’s state-of-the-art designs also have non-conductive spacers, redundant gas-retention systems, and foam-filled, airtight window frames. Taken together, these design elements can produce a window with an overall performance of R-5 to R-7 (a measure of thermal resistance used in the building and construction industry; the larger the number, the more effective the building insulation). The R value of most currently installed single-paned windows is R-1.2. Figure 1 shows comparative R-values for windows.


Figure 1 Comparison of full frame R-values for various window technologies.

Advanced technology can not only deliver high performance, but can also lower product costs. In the past, window replacement or retrofits were often not cost-effective because of the poor performance and high cost of the new windows. However, with highly insulating, low-cost window technology, replacements and retrofits can be cost effective in many situations, including in public buildings and low-income weatherization programs.

One of the main goals of ARRA is to create jobs while simultaneously transitioning toward a more sustainable U.S. economy. Our company, for example, recently acquired and reopened two plants (one in Pennsylvania and one in Illinois) and hired back skilled manufacturing workers to produce energy-efficient windows.

The Adoption of New Technology

The adoption of a new technology is never a simple process. For example, based on “rules of thumb” and often outdated information about cost and/or performance, many energy-efficiency auditors, specifiers, engineers, and installers have been resistant to considering replacement windows and other new technologies. It has long been documented that many consumers and firms discount future savings from energy-efficiency investments at rates that go well beyond market rates for borrowing or saving. This pattern, often referred to as “the energy-efficiency gap,” has been the subject of intense debate among energy-policy analysts for some time and is now a critical issue for climate-change policy.

The effective implementation of energy-efficiency measures through ARRA has the potential to accelerate the pace of change in the building industry, reduce greenhouse gas emissions, and make green building standards, such as Leadership in Energy and Environmental Design (LEED) and Energy Star, more meaningful. The effective implementation of ARRA can lead to a rapid expansion of operations for many businesses, the creation of jobs in new and previously existing plants, and the creation of jobs in upstream materials suppliers and installers of these new products. In addition, ARRA can create a win-win situation in which the creation of green jobs simultaneously helps to address climate change.

Overcoming Resistance to Change

To take advantage of the opportunities presented by ARRA, a number of administrative issues must be addressed. These are described below in the context of low-income weatherization, residential energy-efficiency tax credits, and school refurbishment. The descriptions are not intended to be comprehensive; they are examples of how resistance to change can be overcome.

Low-Income Weatherization

The low-income Weatherization Assistance Program (WAP), which has been operating for decades, supports cost-effective energy-efficiency measures by nonprofit “action agencies” across the country. However, because of low funding levels (e.g., about $200 million in 2008, supplemented by similar amounts from other government and utility programs), only about 100,000 households have been weatherized annually, a small fraction of the more than 15 million low-income households estimated by DOE to be eligible. ARRA provides an additional $5 billion in funding for WAP.

WAP has also been constrained historically by a cap on the maximum average investment per household, which meant that higher cost changes, even if they were shown to be cost effective, were not approved. ARRA addresses this problem by increasing the allowable investment from about $3,000 to about $8,000¹ for changes that are shown to be cost effective. This will allow for more complete weatherization and will provide much higher energy, environmental, and economic benefits for each household.

Using Information Technology

Information technology (IT) can be used to help deliver the full potential of WAP. However, the software model (the National Energy Audit Tool [NEAT]) currently used by 34 states to assess the cost effectiveness of measures for households and to establish priorities is outdated and has severe shortcomings. For example, NEAT has a hardwired assumption that the best available replacement window has a thermal performance of R-2.2, far lower than the R-5 or higher performance readily available with current technology (Figure 2 and Table 1). In addition, NEAT does not use current state-of-the-art energy-analysis software, such as the Home Energy Saver software package sponsored by Lawrence Berkeley National Laboratory (LBNL, 2009a).

 

Figure 2   Cutaway drawing of the insulated glass unit (IGU) by Serious Materials.

Using high-performance, full-frame R-value residential replacement windows would be an easy way to deliver on ARRA’s midterm and longer term objectives of reducing heating and cooling costs and increasing both environmental performance and energy security. But for that to happen, a full-frame R-5 through R-11 window must be incorporated into the model.

We have been encouraging government agencies and their partners in the national laboratories to develop a modern Web-based application that can be made available quickly to enable models to include the latest available building technologies. In addition to delivering more accurate pre-weatherization energy and economic analyses, a Web-based software application would also provide better post-weatherization tracking and reporting of the overall program accomplishments and costs.

Residential Energy-Efficiency Tax Credits

ARRA increases the residential energy-efficiency tax credit to 30 percent of the first $5,000 spent on eligible products, including windows and doors, up to a limit of $1,500. In addition, it tightens the performance standards for eligibility for a range of products. To qualify to receive the tax credit, windows, for example, must have a U-factor of 0.30 or lower and a solar heat-gain coefficient of 0.30 or lower. Products that meet these performance standards, which can be readily achieved by using existing technology, are already available from several manufacturers. The higher standards will also encourage innovation by clearly rewarding better-performing products.

This will only happen, however, with continued support for high standards. Legislation has been introduced to roll back the performance criteria, and some have suggested referencing Energy Star criteria (R-2.8, U-0.35) instead of ARRA requirements. In our view, this would result in taxpayer dollars being wasted on unnecessarily inefficient products and would discourage innovation. Before tax credits can be based on Energy Star criteria, those criteria will require significant changes.

DOE has recently revised the Energy Star criteria for windows in the first part of a two-phase process. Phase 1 was urgently needed to catch up to code requirements that already exist in many states. Phase 2 would rework Energy Star standards and restore its leadership position. However, under current plans, discussions on Phase 2 will not begin until August 2009, with implementation at an unspecified future date.

The debate about how much to raise Energy Star requirements is ongoing. Many products being manufactured today, by us and others, already meet previously proposed (but not adopted) Energy Star requirements that will not take effect until 2013. We believe that if the criteria were made significantly more stringent, companies whose current products meet the relatively weak Energy Star requirements but do not qualify under ARRA for a tax credit would immediately begin to improve and innovate to meet the new criteria.

During the latest DOE comment period on the tightening of Energy Star requirements, many urged that the requirements be increased slowly. DOE is conducting a follow-up analysis to address the issues raised by stakeholders and to consider the criteria approved for the 2009 International Energy Conservation Code (International Code Council, 2009) and the criteria set forth for the 2009–2010 ARRA tax credit.

School Refurbishment

ARRA does not provide funding specifically for the energy-efficiency refurbishment of schools. However, it does provide substantial financial support—$22 billion in tax-credit bonds (TCBs)—that can be used for school refurbishment and construction (IRS, 2009). In contrast to a direct grant, a TCB is a relatively novel and somewhat unwieldy financial instrument. To demonstrate how TCBs work, we have been working with a few school districts and state and local governments to support school refurbishment and construction programs. The results are expected to be high levels of energy and economic performance.

One Billion Tons

From pressure by students on college campuses to CEOs, green building is a fast-growing mandate. In 2008, 12 percent of commercial projects received LEED or equivalent green certification (accounting for 41 percent of commercial spending), and the percentage of LEED-certified projects is expected to at least double by 2013 (McGraw-Hill Construction, 2008). Energy-efficient practices are already required by many federal, state, and local authorities, as well as by industry leaders such as General Electric, Cushman & Wakefield, Adobe Systems, and Bank of America.

We believe that WAP and the other ARRA initiatives described above could reduce emissions by 1 billion tons per year, or about 3 percent of the world’s emissions, by helping to lower energy consumption in the existing built environment. Thanks to ARRA, we have a once-in-a-lifetime opportunity to change our built environment by deploying new technologies. It will take some effort to ensure that ARRA funds are allocated and spent wisely. But if they are, we look forward to great increases in sustainability in the built environment and a significant contribution to addressing climate change.

References

Arasteh, D., S. Selkowitz, J. Apte, and M. LaFrance. 2006. Zero Energy Windows. In Proceedings of the 2006 ACEEE Summer Study on Energy Efficiency in Buildings. Pacific Grove, Calif. August 2006. LBNL-60049. Available online at http://gaia.lbl.gov/btech/papers/60049.pdf.

DOE (U.S. Department of Energy). 2009. Buildings Energy Data Book. Washington D.C.: DOE.

 International Code Council. 2009. 2009 International Energy Conservation Code. Washington, D.C.: International Code Council.

IRS (Internal Revenue Service). 2009. Qualified School Construction Bond Allocations for 2009. Notice 2009-35. Washington, D.C.: IRS.

LBNL (Lawrence Berkeley National Laboratory). 2009a. Home Energy Saver Software. Berkeley, Calif.: LBNL.

LBNL. 2009b. RESFEN5.0 Modeling Software. Berkeley, Calif.: LBNL.

McGraw-Hill Construction. 2008. Green Outlook 2009: Trends Driving Change. Bedford, Mass.: McGraw-Hill.

Serious Materials. 2008. DOE, TVA Partners in Groundbreaking Energy Efficiency Project. Sunnyvale, Calif. Available online at http://www.ornl.gov/info/press_releases/get_press_release. cfm?ReleaseNumber=mr20081121-00.

Serious Materials. 2009. RESFEN Modeling Results v7. Sunnyvale, Calif.

FOOTNOTES

 ¹ This includes the inflation adjustment from the base year of 2000, as specified in 42 USC 6865.