Buildings

Energy consumption in residential buildings is responsible for approximately 20% of total primary energy use in the U.S.1 Due to energy efficiency, total residential energy use has remained largely constant from 2005 to 2018, and per-household energy consumption has fallen by roughly 16% over the same period.2 This is notable, given that the average U.S. resident lives in larger, better-acclimated homes with significantly more devices.

The efficiency of appliances has increased significantly in the last decades. The chart shows the relative average energy consumption of new appliances sold over the 1980-2017 period. Clothes washers and refrigerators showed the greatest improvements (80% and 60% reductions in energy consumption, respectively).3 These gains were driven in large part by federal standards (indicator #26), ENERGY STAR® (indicator #27), tax credits, and utility rebates.

Federal appliance standards ensure a base-level efficiency for all appliances on the market, and have led to large-scale energy savings of both electricity and natural gas since 1990. These savings add to enormous benefits for U.S. households and businesses. A typical household saves about $500 per year on utility bills because new household appliances and heating, cooling, and lighting products comply with minimum standards.4 Estimates suggest the federal appliance standards program saved nearly 600 TWh in 2019 relative to efficiency levels without standards, which is over 14% of the total electricity that was generated in the U.S. in 2018 (4,178 TWh).5

ENERGY STAR Products®, a part of the ENERGY STAR® program, has grown to cover more than 75 product categories and 60,000 product models, some of which have reached market penetrations as high as 90%.6, 7 For example, ENERGY STAR® specification for refrigerators was established in 1996 and has been revised and strengthened multiple times, helping to reduce the average energy consumption of refrigerators by 24% while the average volume increased 18% from 1996 to 2017. Established in 1997, ENERGY STAR® specifications for clothes washers were also strengthened multiple times, facilitating a 30% drop in energy consumption while the average capacity increased 34% from 2004 to 2017. Americans purchase more than 300 million ENERGY STAR® certified light bulbs annually, with an overall annual market value of more than $100 billion.

Total commercial building energy consumption per square foot in commercial buildings has been declining, in large part due to significant savings in lighting and space heating, which each fell by more than 600 trillion Btu from 2003 to 2012.8 However, total energy consumption in this sector has been rising due to increased development, with square footage rising from 71 billion in 2003 to 87 billion in 2012, and increases in certain areas, such as the energy consumed by office equipment and computing, cooling, ventilation, and other loads. In contrast, plug loads account for about a third of commercial building electricity consumption, and could grow to nearly half by 2030.9

A success story of bringing RD&D technologies to market, drastic efficiency gains in light bulbs have allowed the U.S. to decrease its energy use from lighting by 16% while increasing lamp inventory by 25% from 2001 to 2015.10 Compared to a traditional 60W incandescent bulb, an 8.5W light emitting diode (LEDs) consumes 85% less energy11 and lasts from 10 to 25 times as long.12 Furthermore, the price of LEDs per lumen has fallen by 75% from 2012 to 2016, and the market penetration has grown from less than one percent to 13.5% over that same time period. In contrast, energy use from high-intensity discharge lamps (HIDs), a less efficient high-output lamp used in street lighting, warehouses, and sports arenas, continues to grow for outdoor uses.13 Nevertheless, DOE’s September 2019 rule that rolls back energy efficiency standards for lightbulbs creates uncertainty in the future of the market. 14, 15

Though they were only introduced in the 2000s, LED sales of A-line bulbs have grown quickly, with sales tripling between 2015 and 2018, resulting in a growth of market penetration from nearly zero to greater than 25% within a span of five years.16

The market share of LEDs has accelerated at a similar rate for tubular bulbs (primarily used in the commercial and industrial sectors), achieving more than 25% of the market share by 2018.17 Their adoption has also been driven by their greater controllability, which leads to additional energy efficiency savings in commercial buildings; for example, LEDs are more easily paired with digital control systems, can feature both dimmable and color-changing features, and expel less waste heat.18

Benchmarking can help facility managers set reasonable energy efficiency goals and assess the effectiveness of energy savings programs. The U.S. Environmental Protection Agency found that buildings that were consistently benchmarked reduced energy use by an average of 2.4% per year.

A number of states and localities have implemented benchmarking requirements using ENERGY STAR Portfolio Manager in the last decade, such that the square footage of floor area required to be benchmarked has increased dramatically – benchmarking through ENERGY STAR Portfolio Manager has grown to represent close to 25% of U.S. commercial floorspace.19

Ratings and certifications bring greater transparency to energy efficiency opportunities, and can result in a clearer understanding of utility bills and opportunities for savings, incentives to invest in energy-efficient construction, and help for homebuyers to qualify for loans. 20, 21 Residential homeowners, builders, and property developers have several tools that can be used in different circumstances to achieve a deeper understanding of a home’s energy performance, including the Home Energy Rating System (also known as a HERS rating), and Home Energy Score (HES rating).

HERS provides an estimate of energy performance in new homes, while HES ratings apply to existing homes. The first chart shows annual ratings performed by year, with increases in the use of both rating systems. Cumulatively, more than 2 million homes are estimated to have HERS ratings, or approximately one-fifth of new homes today.22 More than 120,000 homes have received HES ratings.

While HERS and HES provide an energy efficiency rating regardless of the home’s performance, ENERGY STAR® certifies new homes that have achieved higher levels of energy efficiency. The cumulative number of ENERGY STAR® certified homes reached more than 2 million in 2019 (Note that many homes receive more than one rating or certification.).

ENERGY STAR® certifies buildings that exhibit better energy performance than 75% of similar buildings nationwide, verified by a third-party.23 On average, ENERGY STAR® certified buildings use 35% less energy and cost $0.50 less per square foot to operate than their peers.24 In 2018 alone, more than 270,000 buildings, comprising 26 billion square feet of floorspace, used ENERGY STAR Portfolio Manager to measure and track their energy use, water use, and waste and materials.25

LEED certifies the design, construction, and operations of a building. LEED requires the modeled design for its certified buildings to be better than a baseline building’s performance by 5% for new construction and by 3% for major renovations, but most LEED buildings are much more efficient that the minimum requirement.26, 27 A 2014 study documented that the average design efficiency of LEED projects in the study was approximately 27% better than the reference code.28 Post-occupancy studies have also borne out the energy performance of LEED buildings: a 2015 assessment of buildings in Washington, D.C., found that LEED-certified office buildings exhibited 13% less energy use intensity than their peers, and a 2016 report by the State of Washington found that by implementing green building practices, state agencies and higher educational facilities reduced their energy use by an overall average of 37%. And, a 2018 GSA latitudinal study examined 200 buildings over a three-year period, finding that compared to legacy buildings, GSA’s high performing buildings show 23% less energy use.29, 30, 31

Building energy codes set minimum efficiency requirements for renovated or new buildings, locking in savings through the building’s lifespan (which can reach over 100 years in the case of new constructions).32 Model energy codes are expected to save $126 billion in energy costs and 13 quads of primary energy over the 2010 to 2040 timeframe.33 A home built to the specifications of the International Energy Conservation Code of 2018 would use 40% less code-covered energy than if it had been built using standard practices in 1975.

The construction of zero net energy and zero energy ready buildings is a very recent trend that still constitutes a small fraction of the building market, but is growing rapidly.34 From 2017 to 2018, the total number of residential units has grown by 50%. In 2019, the number of verified commercial buildings has reached 108, the number of emerging commercial buildings striving for zero net energy has grown by over 270 since 2017.35 Certifications such as LEED Zero may help drive more net zero energy projects by facilitating recognition and incentives. States and cities are also beginning to incorporate net zero energy into codes and stretch codes. 36

Building controls, sensors, and submeters work together to make up smart building systems, and their deployment is growing rapidly.37 This growth in investment coincides with a growth in the adoption of smart technologies – 46% of large commercial buildings have a centralized building automation system and 41% of homes have a programmable thermostat.38 However, the market has significant growth potential. For example, in spite of the energy savings potential shown in the table above, only 3% of homes currently use smart thermostats to control HVAC systems, and only 8% of small commercial floor space currently has a building automation system.

Thirteen states and the District of Columbia have established appliance efficiency standards across a range of 30 different product types that are either allowed to exceed or are not covered by the U.S. Department of Energy’s minimum energy performance standards.39

For products that are not yet covered nationally, state standards can build momentum around efficiency for new types of equipment. For instance, California was the first state to adopt a commercial clothes washers efficiency standard in 2002, shortly followed by eight more states, and then the first federal standard for clothes washers was adopted by Congress in 2005.40