What funding sources are available for the implementation of building energy performance standards?

A direct funding source for the implementation of building energy performance standards is available through the Building Codes Implementation for Efficiency and Resilience competitive grant program, which is funded by the Infrastructure Investments and Jobs Act (“IIJA”). Additionally, building code activities, including adoption and enforcement activities, are eligible uses under the Federal Emergency Management Agency’s (“FEMA”) Building Resilient Infrastructure and Communities (“BRIC”) program and Hazard Mitigation Grant Program (“HMGP”).

1. Building Codes Implementation for Efficiency and Resilience Grant Program

The Building Codes Implementation for Efficiency and Resilience competitive grant program, funded by the IIJA, makes available $225,000,000 in federal funds to states and state partnerships.[1] The purpose of the grant program is to promote updates to building energy codes to save consumers money on their energy bills. Grant funding will be awarded to eligible entities to update building codes through eligible activities.[2] Applications will likely open by the end of 2022.[3] Under this grant program, funds may be used to:

• Create or enable state or regional partnerships to provide training and materials to:
  • (i) builders, contractors and subcontractors, architects, and other design and construction professionals, related to meeting updated building energy codes in a cost-effective manner; and
  • (ii) building code officials, related to improving implementation of and compliance with building energy codes;
• Collect and disseminate quantitative data on construction and codes implementation, including code pathways, performance metrics, and technologies used;
• Develop and implement a plan for highly effective codes implementation, including measuring compliance;
• Address various implementation needs in rural, suburban, and urban areas; and
• Implement updates to energy codes for:
  • (i) new residential and commercial buildings (including multi-family buildings); and
  • (ii) additions and alterations to existing residential and commercial buildings (including multi-family buildings).[4]

Eligible recipients include states and state partnerships. A state partnership includes a partnership with the relevant state agency and one or more of the following:

• Local building code agencies;
• Codes and standards developers;
• Associations of builders, design, and construction;
• Local utility energy efficiency programs;
• Consumer, energy efficiency, and environmental advocates; and
• Other entities, as determined by the Secretary of Energy.[5]

The Secretary of Energy considers the following in awarding grants to eligible entities:

• Prospective energy savings and plans to measure these savings;
• Long-term sustainability of such plans and savings;
• Prospective benefits and the assessment of such benefits, including assessment of:
  • (i) energy resilience and peak load reduction;
  • (ii) occupant safety and health; and
  • (iii) environmental performance.
• Demonstrated capacity of the eligible entity to carry out the proposed project;
• Need of the eligible entity for assistance; and
• Prioritizing applicants from partnerships.[6]

2. BRIC and HMGP

Building code activities, including code adoption and code enforcement activities, are eligible activities under the HMGP’s 5 Percent Initiative[7] and the BRIC Capability and Capacity Building Activities, the latter of which was provided funding through the IIJA.[8] However, states may use their discretion to set their own priorities for the types of projects they want to fund through BRIC and HMGP.[9]

The Standard 5 Percent Initiative under HMGP provides opportunities for applicants and sub-applicants to fund certain projects that are difficult to evaluate using cost-effectiveness methods approved by FEMA. Standard 5 Percent Initiative funds cannot be used in situations where mitigation activities can be evaluated under FEMA-approved cost-effectiveness methods but do not meet the required benefit-cost ratio.[10]

The Additional 5 Percent Initiative for Promoting Resilience through Disaster-Resilient Building Codes provides funding that has been set aside to help communities enhance disaster resilience related to building codes, such as adopting the latest International Building Code® and improving a community’s Building Code Effectiveness Grading Schedule score.[11] It is important to keep in mind which retrofits would or would not constitute a hazard risk reduction, as that will determine eligibility under any of the FEMA or Hazard Mitigation Assistance programs.