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February 2023 Newsletter |
Recapping 2022: A Big Year and a Bright Future for Zero Energy Ready Homes
The turning of the calendar to a new year offers a unique opportunity to both look back at what has been and look forward to what is to come. It offers a chance to reflect and appreciate everything that was accomplished, learn from experiences, and move forward with hope and anticipation.
2022 saw a lot of positives for the Zero Energy Ready Home Program, but it was also a challenging year for many of our builders and the housing industry at large. Staffing and operational issues are still lingering from the early COVID days. There is also a very serious, very real workforce shortage for builders looking for qualified contractors – and for high-performance builders who are using innovative, new technologies, the number of qualified contractors is even smaller.
Supply chain issues that began during the height of the pandemic continued throughout 2022 and are causing major delays for builders and new homebuyers today. Windows, electrical components and appliances are among some of the building components that are experiencing supply shortages, resulting in holdups during the construction process and completion delays. The cost of building materials has increased, leading to higher prices for new homes, and when coupled with rising interest rates, in many cases new homebuyers are facing a real affordability issue.
But while today’s landscape is certainly a challenging one, the DOE Zero Energy Ready Home program and our partners continue to set the bar high and lead the way for the future of the housing industry. 2022 was a banner year for the program for new home certifications, and the nation’s investment in the fight against climate change with the Inflation Reduction Act puts ZERH at the center of the commitment to reduce our carbon emissions in the residential building sector. A major program update to ZERH Version 2 further highlights the advancements that have been made in the industry and how we can continue to provide healthier, more efficient, and more resilient homes to all Americans. Together, we can continue to advance the housing industry, grow the ZERH brand, and help our nation reach its goals in the fight against climate change.
A Growing Brand
Launched in 2013, the program (formerly Challenge Home) began making in-roads into the housing market around 2016 when it reached 1,000 homes. After nearly doubling every year since, the program had a record year in 2022 with 2,958 certified homes and will surpass 12,000 homes in January of 2022. Kentucky and Hawaii joined the list of states with certified ZERH homes, which are now located in 42 out of 50 states.
Recognizing the value of in ZERH certified homes, particularly in the affordable housing market, the program is now referenced in over 15 states and local governments in their low-income housing tax credits, incentive programs, and building codes. There are 23 Habitat for Humanity Chapters across the country who are registered ZERH partners and over 160 Habitat homes have been certified to ZERH program requirements.
HIA in Person
After a virtual ceremony in 2020, and a hybrid one in 2021, the Housing Innovation Awards were back in full swing at the EEBA High-Performance Home Summit in Denver, CO this past October. This year’s awards featured 26 homes across 18 states. You can view a profile on each of the winning homes on the DOE Tour of Zero. The grand winners from each category were:
In addition to the award-winning homes, two builders were recognized for their investment in the future of the building industry. Tim O’Brien Homes (Pewaukee, WI) was honored for their efforts in Workforce Development and Training. Mandalay Homes (Prescott, AZ) was recognized with an award in Advanced Construction Practices for their continued work in efficiency and decarbonization.
A Bright Future- The Inflation Reduction Act and ZERH V2
In August, with the signing of the Inflation Reduction Act (IRA), the ZERH program became a part of the nation’s biggest investment in the fight against climate change. As of January 1, 2023, $2500 is now available for homes meeting EPA’s ENERGY STAR Single Family New Homes Program, and $5000 for homes certified under the ZERH program. As the most stringent federal residential energy efficiency program, the Zero Energy Ready Home Program’s recognition in this legislation is a huge step forward for the energy-efficient building sector helping to provide comfortable homes while contributing to national and international efforts to shift the current course of the global climate.
Concurrently, the program was working on updating to a Version 2, the first major, full-scale update to the program requirements since its launch in 2013. Over the past 10 years, increasingly stringent energy codes have steadily raised the bar for minimum efficiency levels. An influx of advanced building technologies, supported by BTO, has provided more cost-effective strategies for achieving higher performance levels. These factors, along with a growing demand for zero energy ready homes and a rapidly evolving homebuilding market, meant it was time for a program update. ZERH Single Family Version 2 is available for certifying homes beginning in 2023 (pending software release) and is based on the latest codes and standards, extensive feedback from industry stakeholders, and close coordination with the Environmental Protection Agency’s (EPA) ENERGY STAR Residential New Construction and Indoor airPLUS (IAP) programs. DOE also recently launched a pilot program for DOE ZERH Manufactured Homes National Program Requirements to help take advantage of the financial incentive opportunity afforded by the IRA.
The new ZERH Version 2 program requirements will be phased in for the 45L tax credit on certified single-family homes acquired on or after January 1, 2024. For more information on version applicability, see 45L Tax Credits for Zero Energy Ready Homes.
Highlights of ZERH Version 2 include:
- Maintaining a tiered relationship with ENERGY STAR Single Family New Homes. ZERH V2 will require and build upon Version 3.2 of the ENERGY STAR Single Family New Home program.
- Emphasizing a highly efficient thermal envelope by aligning insulation levels with the 2021 International Energy Conservation Code.
- Boosting the efficiency threshold for ZERH certification. Qualifying homes will generally have Energy Rating Index (ERI) scores in the low- to upper-40s.
- Expanding the use of PV-Ready features so more new homes can easily accommodate a PV system in the future.
- Making homes “ready” for high efficiency electric technologies for space heating, water heating, and electric vehicles.
Not yet engaged with the ZERH program? Contact ZERH@doe.gov or visit buildings.energy.gov/zero.
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