Chapter 7.5
Energy Conservation and Efficiency

• ALL
• Remove Code Barriers
• Create Incentives
• Fill Regulatory Gaps

Enhancing Energy and Water Efficiency

INTRODUCTION

Lowering energy and water use can drastically reduce greenhouse gas (GHG) emissions.[1] One efficient and cost-effective way to reduce energy and water use without changing user behaviors or practices is to use energy and water efficient products.[2] Some models of air conditioners, heaters, other appliances and building products use less electricity than others. This ordinance encourages individuals and developers to switch to these more energy and water efficient products by offering a variety of incentives. Some incentives are directed at reducing developer costs or increasing developer revenue in the purchase and implementation of efficient products.[3] Example local incentives include tax credits or government grants.[4] Other incentives provide developers with building and permitting process benefits, such as expedited permitting and density bonuses.[5] These energy and water efficiency ordinances can be adapted to fit a particular local community’s circumstances and can be adjusted as needed to require more energy or water efficient products as the community progresses towards cutting energy and water consumption.

Along with ordinances, many local governments offer rebate programs. Rebate programs create incentives for those looking to use more efficient products. Such incentives may be offered to residential and commercial property owners. Rebates and other financial incentives are used by many jurisdictions from local governments to the federal government. One law firm has created a list of state and federal incentives that are offered across the country.[6] Ordinances incentivizing energy and water efficient products may work in collaboration with several ordinances promoting renewable energies, thus addressing both the demand and supply side. (for ordinances promoting renewable energies see Promoting Renewable Energy with Incentives briefs).[7]

EFFECTS

The two most direct benefits from this ordinance are the reduction of water use and of fossil fuels burned and the associated GHGs emitted that contribute to global climate change. Switching to products that use less energy and water are quick and efficient ways to reduce GHG emissions and inefficient water usage.[8] Encouraging the use of energy and water efficient products can also have significant long-term economic benefits for those paying utility fees.[9] Energy and water efficient products lower utility costs.[10] Improving energy efficiency also easies the transition to alternative renewable energy systems (for briefs addressing renewable energy systems see Promoting Renewable Energy with Incentives and Zero Net Energy Buildings), as those systems can be smaller, decentralized, and produce less electricity to accomplish their goal of replacing fossil fuel systems.[11] Other benefits include, stabilizing energy prices as the market will be affected less by fluctuating fossil fuel prices; and lowering consumers water bills and waste water treatment costs as there is less demand for water.[12]

EXAMPLES

Minneapolis, MN

Minneapolis provides floor area ratio (FAR) premiums in the downtown district for buildings that increase their energy efficiency by a minimum of 35% compared to the Minnesota energy code. Floor area premiums are based on the total acreage of a lot, if the floor area ratio is 1.0 it allows for a total floor space equivalent to the total acreage of the lot. For example, a two-story building with each floor equivalent to 50% of the lot size would be acceptable (this concept is visualized in figure 1).[13] The Minneapolis code adds a FAR premium to buildings for energy efficiency ratings that exceed the Minnesota State code. For an increased efficiency of 35% over the State code, a developer is given an increased ratio for the building and for an increase of 45% an even greater ratio, allowing for taller buildings. If a developer complies with the 45% enhanced efficiency and creates a building in the downtown district on half the total acreage of the lot, the developer would be entitled to be build four stories higher than a similar building that does not have a qualifying energy efficiency rating. The additional floor area ratio premiums can be added with other allowances to create an even greater ratio to build higher.

To view the provision, see Minneapolis, MN, Code of Ordinances § 549.220 (12) (2016).

Sarasota County, FL

Sarasota County has established an Energy Economic Zone Program that allows developers of commercial property to receive different tax rebates and other financial incentives when they comply with energy efficiency standards. Eligibility for the program can be met by receiving a specific ENERGY STAR rating (energy star is an U.S. Environmental Protection Agency (EPA) energy usage rating program), a LEED (Leadership in Energy and Environmental Design) certification, or an energy improvement strategy that will reduce energy usage by 10% as a result of efficiency measures. By providing incentives to reduce energy, developers and owners of commercial properties are more likely to use efficient appliances. The tax incentives may also help attract developers building sustainably, which may create jobs and promote the local economy.[14] The Energy Economic Zone Program also creates an incentive to update products as efficiency standards need to be met every year in order to be eligible for the various incentives.

To view the provision, see Sarasota County, FL, Code of Ordinances §§ 38-300. – 38.309 (2012).

Pella, IA

A natural and common place to regulate energy use is through energy utilities. Local governments, such as Pella, often work with energy providers to offer incentives related to energy efficiency. Pella’s Bright Energy Solutions (BES) offers multiple incentives to residents, such as rebates for the purchase of energy efficient appliances and other products. These incentives can include energy efficient washers and dryers or services to improve household systems. Available for both residential and commercial customers, the program requires owners to submit the rebate form along with proof of purchase of qualifying products. For example, if a customer purchases an Energy Star refrigerator and submits the form online the customer receives a $20-50 rebate.[15] This rebate is in addition to any energy savings that an individual will receive for using an energy efficient product.

To view the rebate program, see Pella, IA, Bright Energy Solutions.

To see more on Pella’s Electrical Distribution Codes see Pella IA., Code of Ordinances §§ 111.01-111.12 (current through 2018).

ADDITIONAL EXAMPLES

Annapolis, MD, Code of Ordinances § 6.29.010 (2017) (provides loans to land owners for the purpose of making energy efficient improvements).

Charleston, SC, Zoning Ordinance § 54-299.31 (2015) (creates a point system for developers to follow, points can be earned for various actions including the use of energy efficient products, points grant various structural incentives).

Columbia, MO., Code of Ordinances §§ 27-161 – 27-169 (2011) (provides a number of financial based energy efficiency programs including grants, rebates, and loans).

Boston, MA, Municipal Code § 7-2.2 (f) (2014) (creates a commission that sets regulatory energy requirements for developers and owners, the commission can set fines, and require replacements of outdated systems).