Policy Solutions

Energy Efficiency

Newer, Smarter Equipment

When buildings operate more efficiently, they consume less energy, reducing GHG emissions on a per unit basis.

Strategies for increasing efficiency include replacing old equipment and using sensors and energy management software to optimize a building’s emissions and energy use. More efficient buildings reduce energy demand, lowering the overall costs of decarbonization.

Market Challenges

  1. Information Gaps

    Energy waste and carbon emissions are easy to overlook. Making good investment decisions regarding efficiency requires both an understanding of a building’s relative performance and an awareness of cost-effective improvement opportunities. The disclosure of building energy performance information (energy use, costs, and related emissions) is not required in most jurisdictions – particularly in the residential sector, where energy information has historically not been accounted for in standard mortgage underwriting and appraisal processes. In addition, consumers are often unaware of the economic, health, safety, and comfort-related benefits of implementing efficiency upgrades.

  2. Capital Constraints and Split Incentives

    Efficiency improvements can require considerable upfront capital expenditures. Many building owners—particularly lower income homeowners and small- to medium-sized commercial building owners—face capital constraints and limited project financing options. Many commercial owners invest with short-term (<5–7 year) hold periods and thus are generally unwilling to put their own capital into deeper retrofit projects with longer than 3-to-5-year payback periods. Furthermore, those who pay for efficiency upgrades are not always the same people who reap the savings, and the resulting misalignment of incentives can further hamper implementation in rental buildings, especially in low-income and historically disadvantaged communities.

  3. Supply-Side Limitations

    The massive increase in building improvements needed to reduce emissions across the U.S. will strain the existing labor force and supply chains. When it comes to the construction process itself, the design and development of most buildings typically happens through a fragmented, linear process involving many different stakeholders (including owners, architects, engineers, consultants, contractors, and subcontractors). With competing agendas, limited budgets and resources, and unequal access to information, buildings are often not designed to optimize systems and equipment. There is no single point of access to energy upgrades given the range of available measures and technologies (like heat pumps, insulation, and lighting) which makes implementation more difficult for both consumers and contractors. Many contractors and appliance vendors are less familiar with key efficiency technologies and have little incentive to learn about, procure, stock, and install them properly – preferring instead to keep selling what they know. Contractors and vendors may also prefer not to sell more efficient products, given they require less frequent replacement and therefore decrease sales. Finally, most building designers are not sufficiently experienced in zero-emission design strategies beyond current code requirements, and they typically do not have the budget or the time to learn and innovate.

Technology Innovation Examples

Phases of Technology
Research and Development
Validation and Early Deployment
Large Scale Deployment

More than one-third of building energy consumption in the U.S. goes to heating and cooling, making advanced building envelopes one of the biggest opportunities for savings. Advanced envelope solutions encompass a variety of technologies and strategies, some established and others emerging, that help prevent the loss or gain of heat in and out of a building via heat transfer and air leakage.

Super high-efficiency envelope solutions—such as modified atmospheric insulation panels, polymeric vacuum insulation spheres, and ceramic aerogels—require more R&D to bring down costs. More established envelope solutions that can benefit from deployment-focused efforts include structural insulated panels (SIPs) and thin-center glass triple-pane windows. Other options include external window shades, which can block the sun’s heat before it passes through the window, and green walls, which take advantage of plants’ ability to absorb the sun’s energy.

Advanced Envelope Solutions
Advanced building-envelope solutions such as structural insulated panels (SIPs) and thin-center glass triple-pane windows can make heating and cooling more efficient.

Electric motors consume approximately 45 percent of global electricity production and represent a $100B+ annual market. Advanced high-efficiency motors and motor-control technologies (such as variable frequency drives (VFDs)) are critical to enabling drastic building-efficiency improvements via higher-efficiency HVAC systems, fans, and refrigerators.

Significant advances in power electronics, control algorithms, machine learning, and novel fabrication techniques are enabling new generations of motors (such as switch reluctance and axial flux) that can improve system level power consumption for HVAC, fans, and refrigerators by 10 to 50 percent.

Advanced Motors for Pumps, Compressors & Fans
This pump, designed by Turntide Technologies, combines two proven technologies: the switched-reluctance motor and the computing technology used in smart phones and cars. The result is a motor system that consumes energy only when needed.

Advances in networking and sensors have it made it possible for building equipment to be connected to cloud-based software systems that can be used 24/7 to reduce energy. Certain systems and equipment can automatically respond to signals from the electric grid and shift the timing of their consumption to optimize for saving energy, money, and/or emissions. (Shifting timing is called demand management or flexibility.) Demand flexibility solutions include hardware (e.g. connected thermostats, timed or remotely controlled EV chargers) and software controls and algorithms that manage a building’s response to a signal to use less energy for a short period of time. This capability allows the building to act like a battery, making it easier for grid operators to use more renewable power.

Grid Interactivity
Demand flexibility allows buildings to act like batteries, shifting the timing of their energy consumption to optimize for saving energy or money and/or reducing emissions.

Next-gen systems that manage building HVAC and lighting have been proven to improve comfort, enhance air quality, and reduce energy consumption by 20 percent to 30 percent with relatively low cost and fast installation. These systems include intelligent data dashboards, fault detection and diagnostics, and AI-drive optimization of building systems. The systems generate savings by using wireless controls, big data, and connected sensors to implement strategies such as optimizing trade-offs between compressors, chillers, and fans and reducing simultaneous heating and cooling. These systems also typically reduce operations expenses and improve comfort by controlling temperature more tightly.

Next-Gen Building Management
Advanced building management systems reduce energy consumption by using connected sensors, wireless controls, and big data to optimize building performance.

Air conditioning uses a significant amount of energy, contributing to higher emissions and rising temperatures. This creates a dangerous feedback loop—more warming leads to more air conditioning, and so on. Also, most air conditioners (ACs) use high-global warming potential (GWP) refrigerants that often leak during equipment operation, maintenance, or end of life.

Considering the rapid increase in AC use due to rising global temperatures, incomes, and urbanization, developing cooling technologies that use no or low-GWP refrigerants and have a multifold improvement in efficiency is critical. Promising solutions are being developed, ranging from novel membrane materials to vapor compression control technologies to unique dehumidification methods. Some approaches also take a “systems engineering” approach to build better systems without major tech development. These technologies can all achieve significant emissions reductions relative to conventional AC technologies.

Super-Efficient Cooling Technology
Cooling technologies that use no or low-GWP refrigerants can reduce emissions significantly compared to conventional AC technologies. Pictured here, the Global Cooling Prize Finalist Technology Schematic: Vapor compression with desiccant dehumidification.

From a list of over 300 technology solutions, DOE’s Office of Energy Efficiency & Renewable Energy selected a final set of high priority technology options that could provide significant HVAC savings for commercial buildings. Ventilation Reduction through Advanced Filtration was ranked third overall.

Reducing the amount of outside air introduced to commercial buildings minimizes the need to constantly heat, cool, or manage the humidity of that air to match indoor conditions. This reduction in outside air enables the use of smaller HVAC systems (CAPEX reduction) and improves operational efficiency of the HVAC equipment for the life of the system (OPEX reduction).

Technologies that enable a reduction in outside air not only improve building operations efficiency, but also address the new ASHRAE 62.1 Indoor Air Quality standards that require the management of seventeen contaminants, including CO2, formaldehyde, and a full range of VOCs in commercial and multi-unit residential buildings. Researchers at Harvard University published a study correlating cognitive ability with lower CO2 levels in commercial buildings, finding ample evidence that cleaner indoor air leads to greater human health and higher cognitive performance.

Ventilation Technology: CO2/Contaminant Filtering
enVerid’s HLR® (HVAC Load Reduction) system is an example of an advanced ventilation technology that can provide energy and cost savings for buildings. By scrubbing return air for indoor air contaminants, the HLR module minimizes the need for outdoor air, thereby reducing the amount of heating or cooling required by the air handler unit (AHU). (Source: enVerid, enverid.com)

Energy Efficiency Policy Recommendations