The federal government released new guidelines to help define zero emissions buildings for real estate developers and corporate tenants that are increasingly focused on clean energy.
The U.S. Department of Energy’s announcement Thursday sets minimum criteria for commercial and residential buildings to create a nationwide standard for lowering carbon emissions, as part of President Joe Biden’s broader green energy initiatives.
It comes after years of developers touting their new or retrofitted buildings with terms such as “net zero,” “carbon neutral” and “zero emissions,” as an increasing number of tenants — including the federal government — measure buildings’ energy efficiency as a key factor in leasing spaces.
Buildings throughout the country that have been described in those terms include the all-electric Salesforce Tower office tower recently completed in Chicago; Hotel Marcel in New Haven, Connecticut; Wells Fargo’s corporate campus under construction in Irving, Texas; Related Beal’s life science facility in Boston; and the redeveloped Firestone Building offices in Seattle.
“The National Definition of a Zero Emissions Building will support the sector as it advances innovative solutions essential to creating resilient communities and high-quality jobs,” U.S. Secretary of Energy Jennifer Granholm said in a statement announcing the initiative. “With today’s announcement, DOE is helping bring clarity to our public and private sector partners to support decarbonization efforts and drive investment — paving the way for the cutting-edge clean energy technologies we need to make America’s buildings more comfortable and affordable.”
The move will help homeowners reduce energy costs and provide “market certainty and clarity to scale zero emissions new construction and retrofits,” the DOE statement said.
There are nearly 130 million existing buildings in the country, according to the agency, that collectively cost more than $400 billion a year to power, with another 40 million new homes and 60 billion square feet of commercial space expected to be constructed between now and 2050.
Thursday’s announcement follows a blueprint unveiled earlier this year to reduce U.S. building emissions 65% by 2035 and 90% by 2050.
The federal government already offers incentives such as tax credits for homeowners to install items such as solar panels, energy-efficient appliances and electric-vehicle chargers.
Commercial property owners can earn tax deductions on costs such as retrofitting interior lighting, heating, cooling and ventilation systems as part of a certified plan to reduce overall energy usage by at least 25%. Deductions can be as high as $1 per square foot for buildings achieving 50% energy savings.
Carbon Concern
Under the new criteria, a zero-emissions building must be energy efficient, free of on-site emissions from energy use and powered solely from clean energy. Future parts of the definition may address emissions from embodied carbon, meaning carbon created from transporting, installing or disposing of building materials, among other considerations.
The federal government will follow the new guidelines to lease net-zero emissions buildings for all deals starting in 2030.
After the announcement, the American Institute of Architects issued a statement commending the Biden administration for continuing to "pursue the monumental task of developing a national minimum definition of a zero emissions building that is consistent, standardized and measurable.”
The architects’ organization said it will “work with our members on how to best support the needs of firms of all sizes to meet these goals.” The statement emphasized the importance of retrofitting existing buildings, which it said can save 50% to 70% of embodied carbon, compared with new construction.
Also Thursday, the DOE announced about $45 million in awards from the Energy Efficiency Revolving Loan Fund Capitalization Grant Program, which allows states and territories to provide loans and grants for energy-efficiency audits, upgrades and retrofits to residents.
The District of Columbia, Illinois, Indiana, Pennsylvania, Tennessee and Vermont were the recipients.