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The North Carolina Home Builders Association so far is winning a political battle to block modernization of the state's outdated energy efficiency standards, which have been in place with limited updates since 2009. On Tuesday, an industry-backed bill to delay any changes until 2026 passed the state House of Representatives. It now goes to the Senate.
The industry argues that stricter requirements for insulation, windows and doors, and heating and cooling systems will make homes unaffordable — a potent argument at a time when the cost of houses has already soared.
But not all homebuilders see it that way. And a federal study backs them up.
Rodney Graham, of Davidson, has built a successful business constructing energy-efficient homes over the past two decades. To him, energy efficiency isn't a bad word — it's a selling point.
Making sure a house won't leak heat in cold weather and has energy-efficient lighting and appliances means savings on monthly heating and electric bills, he said. Over the life of a home, those savings more than make up for upfront costs. (More about that below.) And cutting energy use will become increasingly important as electricity rates continue to rise in North Carolina.
"I think we need to look at the savings in energy and the long-term durability of the house. To me, it's just a no-brainer," said Graham, founder of John Marshall Custom Homes in Davidson.
Graham has earned a reputation for building energy-efficient homes that not only save money but help fight climate change. I first met him in 2009 when he built Mecklenburg County's first LEED-certified house. He has built many more since.
Graham showed me around one of the houses he's building right now. We saw energy-saving windows and doors, tankless water heaters, spray-foam insulation, LED lighting, energy-efficient appliances, and other tactics that he uses.
Graham has been following the debate in Raleigh over the energy code updates recommended by the state Building Code Council. And where others see cost, he sees value.
"Yeah, they'll make houses more expensive," Graham said of the code updates. "But I think it's like just about anything you do: You get what you pay for. You're going to save money on your utility bills. Your houses are going to last longer. They're going to be worth more when you sell, too."
Graham has all his houses certified for energy efficiency through the EPA's Energy Star system. He also has had homes certified through the Home Energy Rating System (HERS), and the U.S. Green Building Council's LEED program, which stands for Leadership in Energy and Environmental Design.
He acknowledges that his custom homes in Davidson, one of the state's most expensive markets, are at the high end of the market — sometimes $1 million or more. But he argues that energy efficiency offers financial benefits at any price point. Buyers just need to take the long view, he said.
"All these things like more efficient windows, more efficient heating systems, they also just tend to be better quality," he said.
Modern rules would save money
The state Building Code Council has been working for two years on the proposed updates, which would bring the state's energy code up to international standards established in 2021.
The homebuilders association says it conducted an informal survey of some of its members and estimates that the proposed changes in North Carolina energy efficiency rules will add an average of $20,400 statewide to the cost of a typical single-family home. But that small survey of industry insiders has drawn criticism.
Contrast that with an analysis by researchers at the U.S. Department of Energy's Pacific Northwest National Laboratory. In a recent update, the lab said the changes would add $4,763 to $6,057 to the cost of a single-family home and $1,552 to $2,029 to the cost of a multifamily dwelling. That's a far cry from the builders' own estimates.
The national lab estimates that the owner of an average-size home would save about 16% in energy costs compared to the current North Carolina energy code, or about $335 a year. Even with a slightly larger mortgage payment to cover the added cost, the typical homeowner would see a net savings in the first year. At that rate, the added cost would be paid off in as little as four years.
Graham prefers not to look at dollar amounts, but at relative cost. He says modern energy efficiency measures add 3 to 4% to the cost of a new house.
"But the savings in durability and energy bills just greatly offsets that. There's no question in my mind about that," Graham said.
Broader social benefits
Gov. Roy Cooper’s administration is pushing for updated energy efficiency standards not only to save homeowners money, but as part of his plan to improve air quality and fight climate change by reducing carbon emissions from electricity generation. A long list of environmental groups support the proposed changes.
"The most affordable and cleanest energy is the energy that we don't need to use," said Forest Bradley-Wright, energy efficiency director at the Southern Alliance for Clean Energy.
He says stricter standards would be good for homeowners and the planet.
"Energy waste itself is expensive. And of course, it leads to more pollution. So by addressing energy waste before it occurs you are reducing the cost of your energy bill and you're lowering pollution from fossil fuel," Bradley-Wright said.
He also said cutting energy use house by house reduces the need to build costly new power plants and speeds up our transition to clean energy.
The Pacific Northwest National Laboratory calculated that the proposed code changes would reduce carbon dioxide emissions by 130,700 metric tons in the first year, equivalent to taking 29,000 cars off the road.
Matt Abele, of the North Carolina Sustainable Energy Association, said legislative efforts to block updated codes are subverting the North Carolina Building Code Council's work over the past two years.
"It would keep North Carolina on energy codes that are in line with 2009 levels, which would keep homes fairly inefficient and more costly for new homebuyers," he said.
Supporters of the code changes also make one more argument against House Bill 488, the legislation to block updates: Without modern rules, the state won't qualify for millions of dollars in federal aid now available for resilience and climate-related projects.
The Building Code Council is supposed to vote on the new rules in June. The House bill to block any action now goes to the Senate, where hearings have yet to be scheduled.
