The federal government recently released a new standard requiring the manufacture of more efficient heating and cooling systems that will also strengthen residential building energy codes, if it is implemented properly. Specifically, under federal law, builders may no longer legally trade-off more efficient HVAC equipment for thermally inefficient insulation and less efficient windows, unless the trade-off is based on using HVAC equipment above the new federal minimum standards and is calculated by software designed to reflect these new standards. Those who already install windows and insulation at prescriptive efficiency levels under the codes are not affected.

The recently updated National Appliance Energy Conservation Act (NAECA) nationwide regulations and standards is a substantial improvement from the old standards. NAECA's primary mandate is to set a manufacturing standard that requires any new equipment produced in or imported to the United States beginning on the effective date be at least as efficient as the minimums. NAECA also contains other mandates that govern state building codes with respect to equipment efficiency.

While some jurisdictions do not permit the trade-off of envelope measures (insulation/windows) for HVAC equipment under their building/energy codes, other state and local building energy codes permit a trade-off or reduction in the building's insulation or window efficiency if high-efficiency heating or cooling systems are installed. Unfortunately, these trade-offs may lead to under-insulated, uncomfortable houses with poor windows. Pursuant to the new NAECA standards, air conditioners and heat pumps will need to exceed the upgraded NAECA minimums for such trade-offs to be allowed under federal law and such trade-offs must be based on new software using the new standards as the baseline.

In addition, while "old" equipment can still be installed in new construction until inventories are depleted, no credit can be taken for trade-offs against insulation or window efficiency for that equipment. The result of this change is likely to be more homes built with higher efficiency insulation and windows in states that allow trade-offs, due to the cost and relative value of upgrades to higher SEER and HSPF.

The NAECA standards immediately supersede all state and local codes that allow for such trade-offs. Updated NAECA standards do not invalidate the entire code, but apply to the portion that covers minimum equipment standards and building energy performance trade-offs. It is critical for states and local jurisdictions to revisit their codes and code enforcement, where they allow trade-offs, and immediately begin to disallow all trade-offs based on outdated compliance software or lower baseline minimums. A number of states have already taken formal action on this front.

It is also important for code officials, builders, and other stakeholders to understand the new limitations and to respond to the change. The U.S. Department of Energy (DOE) has developed its interpretation of the issue in two important ways. First, it has issued guidance to the states on relevant code changes for them to consider. Second, the DOE has issued a new version of its REScheck building code compliance software (v 3.7, re-lease 1b), which incorporates the new NAECA requirements. Earlier versions of REScheck are outdated, no longer valid, and should not be used.

The intent of NAECA is to capture new appliance technologies that have been proven so reliable and affordable that anything less efficient is obsolete. The new air conditioner and heat pump minimums fit this description perfectly.

The value of these efficiency upgrades is that they are cost-effective and save substantial amounts of energy for consumers and for the nation. If the trade-off baseline in codes had not been raised to incorporate the new NAECA minimums, then these potential savings would not be realized; although higher efficiency equipment would be installed, the trade-off would have allowed reducing the efficiency of the building envelope, thereby negating the improvements intended through NAECA.

In other words, we would have more efficient equipment but still use the same amount of energy. This could amount to over 1.3 billion kilowatt hours per year, or about one quad of energy over 20 years. As a result, NAECA was drafted to explicitly address this problem by preempting state and local codes that contained outdated baseline values. These standards will ultimately save consumers and our nation valuable energy resources and money. Moreover, it is likely that more builders will build homes with more efficient building envelopes, because NAECA makes it more difficult to trade off energy efficiency for mechanical equipment.

Kate Offringa is the director, federal and state programs, at the North American Insulation Manufacturers Association. She may be contacted at 703-684-0084.

Publication date: 06/26/2006