The upfront cost of retrofitting building systems and equipment is often a significant barrier for getting efficiency projects done. In most cases, and initial investment pays off over several years through reduced cost savings. Incentives can reduce the upfront cost, and result in more projects.
A variety of federal, state, local, utility, and non-profit incentives are available to help property owners and users offset a portion of the upfront costs. The most common incentives for efficient building retrofits are summarized below:
Beyond project-related incentives, many states and municipalities have enacted legislation related to green buildings. Below is a summary of some of the most common, courtesy of DSIRE.
Appliance/Equipment Efficiency Standards
The federal government, along with many states, has established minimum efficiency standards for certain appliances and equipment. The retail sale of appliances and equipment that do not meet the established standards is prohibited.
Building Energy Codes
State laws governing energy standards for commercial and/or residential construction. Most states and local governments use International Energy Conservation Code (IECC), developed and published by the International Code Council (ICC); or ASHRAE 90.1, developed by the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE).
Energy Standards for Public Buildings
A separate set of building energy standards for government buildings.
Equipment Certification Requirements
Policies requiring renewable energy equipment to meet certain efficiency standards.
Some states with de-regulated energy markets require electric utilities to provide their customers with specific information about the electricity that the utility supplies, including the utility’s fuel mix percentages and emissions statistics.
Green Power Purchasing Policies
Commitments by government entities, businesses, residents, schools, nonprofits and others to buy electricity from renewable resources.
Mandatory Utility Green Power Option
In de-regulated energy markets, states may require electric utilities to offer their customers the option to buy electricity generated from renewable resources. The utility may either generate its own green power, or it buys renewable energy credits (RECs) from a provider certified by a state public utilities commission.
For electric customers who produce their own electricity, net metering allows the customer to sell electricity back to the grid when generation exceeds the customer’s consumption.
Public Benefit Funds
Sometimes called a “system benefits charge,” public benefit funds (PBFs) ensure continued support for renewable energy, energy efficiency and low-income energy programs. These funds are usually supported through a very small surcharge on electricity consumption.
Renewables Portfolio Standards (RPS)
State or federal requirements for utilities to use or procure renewable energy or renewable energy credits (RECs) to account for a certain percentage of their retail electricity sales.