The Cost and Performance of Residential New Construction Programs

E. Vine

New homes determine future housing stock trends and the penetration of innovations in the marketplace. Residential new construction programs are of special interest therefore because they affect both present and future energy use. These programs affect the housing stock directly (by what is actually built) and indirectly (by creating demands for materials and by training builders, contractors, architects, and engineers). Thus, if cost-effective energy-efficiency opportunities are not fully captured by existing codes and standards, they may become "lost opportunities" for society.

In the past year, we evaluated the cost and performance of ten residential new construction programs sponsored by investor-owned utilities in the U. S. Based on evaluations of these programs, we found that many of these programs were in danger of being discontinued because the current inclusion of only direct program effects led to the conclusion that these programs were not cost-effective. The cost of energy saved by nine of the programs ranged from a low of 3.4¢/kWh to a high of 34.1¢/kWh (see Figure). Weighted by energy savings, the average cost of energy saved by the programs was 5.7¢/kWh.

We believe that the cost-effectiveness of residential new construction programs can be improved 1) by promoting technologies and advanced building design practices that significantly exceed state and federal standards; 2) by reducing program marketing costs and developing more effective marketing strategies; 3) by recognizing the role of these programs in increasing compliance with existing state building codes; and 4) by allowing utilities to obtain an "energy-savings credit" from utility regulators for program spillover (market transformation) impacts. Utilities can also leverage their resources in seizing these opportunities by forming strong and trusting partnerships with the building community and with local and state government.

Reference

Vine E. Utility Residential New Construction Programs: Going Beyond the Code. Lawrence Berkeley National Laboratory Report No. LBL-36603, 1995.

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