Energy Efficiency Trends In Residential And Commercial .

Energy Mix and Impacts on Carbon Dioxide EmissionsOverall growth in the U.S. housing market, despite the recent downturn, has driven an increase in electricity consumption. Electricity isthe largest energy source for buildings, and that predominance hasgrown. Natural gas is the second largest energy source and petroleum(predominantly heating oil) a distant third. Buildings demand for electricitywas the principal force behind the 58 percent growth in net electricitygeneration from 1985 to 2006.Over 70 percent of U.S. electricity is generated by burning coal, petroleum,or natural gas; another 20 percent is generated by nuclear power stations;and less than 9 percent comes from renewable sources, with 7 percentof that from hydroelectric dams. Conversions from one fuel form to anotherentail losses, as does the transportation and distribution of electricity overpower lines. These losses are roughly twice the size of actual purchases,making electricity the largest buildings energy source in “primary” terms(including conversion and transportation losses) at about 72 percentin 2005.The burning of coal and natural gas to supply buildings with electricity,coupled with direct burning of natural gas, makes buildings responsible forthe largest share of U.S. carbon dioxide emissions. With the increase inbuildings electricity consumption, that proportion has risen from aboutone-third of the total in 1980 to almost 40 percent in 2005.8U.S. Department of Energy

Buildings account for 72 percent of U.S. electricity use and36 percent of natural gas useFigure 8Growth in Buildings Energy Use Relative to Other SectorsBuildings account for 40 percent of all energy use inthe United States. This sector consumes more energythan either industrial or transportation, surpassingindustrial as the number one consuming sector in 1998.Both residential and commercial building energy useare growing, and represent an ever-increasing shareof U.S. energy consumption. While residential energyconsumption exceeds commercial, the latter has beenincreasing more rapidly, rising from just 14 percent oftotal U.S. energy consumption in 1980 to 18 percent by2005, a 70 percent 19901995Commercial 025200201501510010505001980199020002005Natural GasPetroleumElectricityNatural endituresNote: According to the EIA, primary energy refers to “All energy consumed byend users, excluding electricity but including the energy consumed at electricutilities to generate electricity.” On the other hand, site energy is the energyconsumed at a home or building, also called “delivered energy.” 2005 BillionPrimary Energy (Quads)Figure 9Predominance of Electricity as Buildings Energy SourceThe growth in buildings energy consumption comespredominantly from electricity. Electricity’s share ofprimary energy use in buildings increased from 56percent in 1980 to 72 percent in 2005. The most versatilefuel form, electricity also is the most expensive perequivalent Btu. Electricity usage accounted for 65 percentof building energy costs in 2005. However, electricityprices declined in real terms during this period and, as aresult, expenditures for electricity did not rise as quicklyas overall usage. Still, electricity expenditures rose withincreased demand from 144 billion in 1980 to 238billion in 2005 as measured in constant 2005 dollars.Use of natural gas, the second largest energy source inthe buildings sector, was essentially flat from 1980 to2005 and decreased as a percentage of total use from28 percent in 1980 to just 20 percent by 2005. Still,expenditures rose significantly due to an increase of morethan 60 percent in the price of natural gas, which wasdriven largely by increased utility demand for gas to beused for electricity production.Petroleum (mostly used as home heating fuel) declinedin both absolute and relative terms from 1980 to 2005,falling from just over 3 quads to about 2.3 quads. Totalexpenditures also fell significantly for petroleum due todecreased usage, even though prices increased by 10percent over this period.Energy Efficiency Trends in Residential and Commercial Buildings9

Figure 10Growth in Electricity Sales in Buildings Relative to Industry3,000Sales (Billion 95Buildings19971999200120032005From 1985 to 2006, retail sales of electricity to residentialand commercial buildings increased by 1,180 billionkWh, an increase of nearly 80 percent. Over the sameperiod, industrial sector demand for electricity increasedby 165 billion kWh, or 20 percent. Stated differently, ofthe total increase in retail electricity sales reported bythe EIA from 1985 to 2006, 87 percent was attributableto buildings sector demand. This large increase in turndrove the need for more power plants, and for morecoal, uranium, and natural gas to generate electricity.Coal-fired plants accounted for 39 percent of theincrease, natural gas-fired plants for 31 percent, andnuclear plants for 28 percent. (In the case of nuclearpower, much of the increase in net generation was dueto increased plant capacity factor, which rose from 58percent in 1985 to 90 percent in 2006.)IndustryFigure 11Imports of Fuels Needed for Electricity GenerationNatural gas, which has accounted for a growing shareof new power generation capacity, is an increasinglyimported commodity. Imports grew from 5 percent ofU.S. total use in 1985 to nearly 20 percent in 2005. TheUnited States imports the most natural gas from Canada:85 percent of total imports in 2006.100908070% Imported605040302010019801985Coal Imported1019901995Natural Gas ImportedU.S. Department of Energy2000Uranium Imported2005A large portion of uranium for nuclear fission is imported.Owners and operators of U.S. civilian nuclear powerreactors purchased a total of 67 million pounds ofuranium oxide equivalent from U.S. and foreign suppliersduring 2006. Approximately 16 percent of all uraniumpurchased was U.S.-origin; foreign-origin uraniumaccounted for 56 million pounds (84 percent) of thedeliveries. In 2006, the three most important nationsfrom which the U.S. imported uranium were Australia(30 percent), Russia (27 percent), and Canada(24 percent). Although less important, other sourcesof uranium include Namibia, Uzbekistan, Kazakhstan,and South Africa.

U.S. buildings currently contribute 9 percent of the world’scarbon dioxide emissionsFigure 12Contributors to Electricity CO2 EmissionsThe growth in buildings energy consumption has resultedin carbon dioxide emissions rising from about a thirdof total U.S. emissions in 1980 to almost 40 percentby 2005. This is a function of the increase in buildingselectricity use, 70 percent of which is dependent onfossil fuels. Despite recent efforts to use cleaner coaltechnologies, the majority of carbon dioxide emissionsare still attributable to coal. Both geothermal andmunicipal solid waste represented negligible amounts ofcarbon dioxide emissions: 0.4 and 11 million metric tonsin 2005, respectively.CO2 Emissions (Million Metric Tons)2,5002,0001,5001,00050001989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005CoalOilNaturalGasMunicipalGeothermalSolid WasteFigure 13CO2 Emissions of U.S. Buildings Relative to Japan, France, and the United KingdomFrom a global perspective, U.S. buildings representedabout 9 percent of worldwide carbon dioxide emissionsin 2005 (2,318 million metric tons of carbon dioxide). Infact, U.S. buildings would rank just behind the UnitedStates itself (5,957) and China (5,322) as the largestsource of carbon dioxide emissions. Carbon dioxideemissions from U.S. buildings exceed the combinedemissions of Japan, France, and the United Kingdom.CO2 Emissions (Million Metric ce1995UnitedKingdom20002005U.S.BuildingsEnergy Efficiency Trends in Residential and Commercial Buildings11

Profile of Residential Energy UseResidential buildings include single-family detached and attachedhomes, apartments, and mobile homes. In recent decades, growthin household wealth and other factors have spurred demand forlarger homes and more energy services, increasing energy consumptionper household. Also, increased saturation of appliances and equipment,including computer and entertainment systems, has resulted in moredemand for energy, particularly electricity.To some degree, the growth in housing unit size and demand for energyservices has been countered by improvements in energy intensity. Someenergy end uses have become much more efficient in the past threedecades, such as refrigeration and clothes washing. Efficiency gains alsohave been made in heating, ventilation, and air conditioning equipment,as well as in windows and insulation. As a result, from 1985 to 2004,the energy intensity of the residential sector decreased by 9 percent asmeasured by energy use per household. Nevertheless, the growth in thenumber of households and size of houses increased total energy use.Tighter state building energy codes have been a factor in the rise ofresidential energy efficiency. In addition, more new homes are beingconstructed to meet the targets of energy efficiency programs, and46 percent of new home buyers cite energy efficiency as a primaryconsideration in their purchasing decisions.4 Many programs exist toaddress efficiency in homes: Building America, ENERGY STAR, Masco’sEnvironments for Living , and the newly-launched Leadership in Energyand Environmental Design (LEED) for homes.Using today’s best practices, builders have demonstrated that it is possibleto design and construct new houses that are 30 to 40 percent5 lower inenergy intensity than a typical code house, at little or no additional cost.Still, such high-performance homes hold a very small market share.4512National Association of Realtors. “Selling Green” Pocket 016fe9575852573f00059ed9f?OpenDocumentResults of the DOE Building America R&D program, as documented in “Best Practices” guidesU.S. Department of Energy

Residential construction and renovation are highly fragmented marketsFigure 14Industry Consolidation: Top 400 Builders’ Percentage of New Home Closings40New Home Closings (%)35302520151050199519961997199819992000Giant 400 Share of U.S. Total20012002200320042005The residential construction industry consists of nearly100,000 builders who each year construct approximately2 million new homes and retrofit nearly 27 million. Theresidential building market is slowly consolidating aslarger firms acquire smaller ones. New home closingsby the 400 largest builders (“Giants”) were 21 percentof the market in 1995, rising to 36 percent in 2005. Puta different way, in 1995 the top 400 builders closed275,000 homes but in 2005, the top 10 alone closedover 280,000. The period of growth in new housingconstruction and increasing consolidation has resultedin substantial growth for the largest companies. Thistrend indicates the importance of educating the largestbuilders on energy-efficient strategies and techniquesbecause of their market impact.Top 10 Builders Share of U.S. TotalNote: Top 10 data not available before 2003.Figure 15Top 5 Builders’ Percentage of New Home Closings*20%Top 5Builders3.5%3.9%LennarHomesOther3.0%KB Home4.7%79%CentexCorporationThe top five residential builders represent just 20 percentof the market; they have held the top positions since2004. This market fragmentation makes it difficult toaddress efficiency as most builders have a limited reach.PulteHomes5.0%D.R.Horton*Chart does not add up to 100% due to rounding.Energy Efficiency Trends in Residential and Commercial Buildings13

Total residential energy use — which has grown along with the numberand size of houses and “plug loads” — has been partially offset byreduced energy intensity per homeFigure 16Average Size of New Homes and Average Number of People per HomeAverage Home Size (Square verage Household Size2,500Since 1980, housing units in the United States havegrown larger, while the number of occupants per homehas decreased. Fewer people have been taking up morespace, due to such factors as higher incomes, smallerfamilies, and deferred marriage.2.502.4550019801990Single-Family Average19941998Multi-Family Average20022006Average Household SizeFigure 17Market Saturation for Residential Equipment and AppliancesAs home size grows, so does residential energyconsumption, with new end uses driving much of thegrowth. Air conditioners, dishwashers, computers,televisions, and small appliances are increasinglyprevalent in American homes. Microwave ovens werefound in 8 percent of homes in 1978; by 1997, 83percent of households had them. Over that same period,households with air conditioning increased from 56percent to 78 percent. Personal computers, nonexistent25 years ago, are now almost standard in U.S. homes.90Percent of Households807060504030201980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004With AC14With ComputerU.S. Department of EnergyWith Dishwasher

Figure 18Residential Primary Energy End-Use Splits, 20054.7%*3.8%1.1%Most of the energy used in a home goes towardsconditioning the space, which is often more affectedby the size of the house than the number of occupants.Heating, cooling, and lighting are still the largest singleenergy end-uses in a home, despite increased energyefficiency of this equipment.OtherComputers4.5%Cooking4.8%Wet Clean30.7%Space Heating7.4%Electronics* The pie chart includes 1 quad of energy (4.7%) that is a statisticaladjustment by the Energy Information Administration to reconcile two divergentdata sources.7.5%Refrigeration12.3%Space Cooling11%12.2%LightingWaterHeatingTotal ResidentialPrimary energy use is 21.8 quadsFigure 19Energy Use Intensity and Factors in the Residential Sector61.4Total Energy Index (1985 0012003Figure 19 is an index for total energy consumption,number of households, house size, a combinedstructural component that captures many of the “otherexplanatory factors,” and energy intensity over theperiod from 1985 to 2004. The number of householdsincreased over this period from 86.8 million to 110.7million (27.5 percent), while energy consumptionincreased from 14.7 quads to 19.7 quads. Residentialenergy consumption, measured as total energy (i.e.,including electricity losses), increased overall by about34 percent. Consumption declined in 1990, 1997, 1998,and 2001, years of mild winter weather. The overall effectof non-efficiency-related changes has been to increaseenergy use by about 15.5 percent. The residential energyintensity index, based on energy use per square foot,has generally trended downward since 1985, with thegreatest declines observed in the early part of the 1990s.StructureIntensity(incl. weather) (per SF)The methodology and data for the energy intensity indicators weredeveloped by a laboratory-university team comprising the PacificNorthwest National Laboratory, Stanford University’s Energy ModelingForum, Argonne National Laboratory, Oak Ridge National Laboratory,and Lawrence Berkeley National Laboratory under contract to the U.S.Department of Energy.Energy Efficiency Trends in Residential and Commercial Buildings15

State building energy codes are increasing energy efficiencyFigure 20Residential Energy Code Stringency (Measured on a Code-to-Code Basis)Energy Use Index (1975 use 100)1201102% Savings10090Standard90-75MEC1983/8610% Savings1% 0197516198019851990U.S. Department of Energy199520002005Figure 20 shows projected savings from improvementsin the leading national residential energy efficiency codefrom 1975 to 2005. The advent of U.S. residential energycodes was ASHRAE Standard 90-75 in 1975. In 1983,code official organizations issued the first edition of theModel Energy Code (MEC), renamed the InternationalEnergy Conservation Code (IECC) in 1998. Most stateshave incorporated some version of the IECC into theirresidential building energy code.This figure includes only the energy end-uses addressedby the IECC for residential buildings: heating, cooling,and domestic water heating. It does not factor in codeadoption, building design (e.g., increasing averagehouse size), or other factors outside the scope of thesecodes, notably mandatory Federal equipment efficiencyimprovement standards (for air conditioners, refrigerators,etc.). The 2006 IECC allows approximately 14 percentless energy use for code-regulated end-uses than theoriginal code in 1975. The U.S. Department of Energy(DOE) is focused on achieving an additional 30 percentimprovement between the 2006 IECC and the 2012 IECC.

Figure 21Residential Energy Codes in 1992 and as of August 2008In 1992, only four states and two U.S. territories had aresidential energy code that met the requirements laidout in the Energy Policy Act of 1992, which called for acode that met or exceeded the provisions of the 1992Model Energy Code (MEC 92). While other states hadadopted codes, they were older than MEC 92.1992By August 2008, all but twelve states and one U.S.territory had a statewide code. Among the states withouta statewide code, or those with older codes, therewas some adoption of codes by individual counties orlocal jurisdictions. In some of these states, a significantfraction of construction was covered by codes, such asin Arizona with codes for Phoenix and Tucson. Thirtytwo states and one territory (shown in yellow, light green,and dark green) met the standards DOE had set in thedetermination process set out in the Energy Policy Actof 1992.7 States and territories marked in red adopted acode older than the IECC 1998, which does not meet thestandards set by DOE in the determination process.TerritoriesAmericanSamoaN. Mariana U.S. VirginIslandsIslandsGuamPuerto Rico1992 MEC equivalentor better2008TerritoriesAmericanSamoaN. Mariana U.S. VirginIslandsIslandsGuamPuerto RicoIECC 2006 equivalentor betterIECC 2003or equivalentIECC 2001-1998or equivalentOlder or lessstringent thanIECC 1998No StatewideCode*Adoption bycounty/jurisdictionNote: New Jersey adopted the 2006 IECC with amendments such that codestringency is similar to 2003 IECC. Additionally, New York has adopted the 2004supplement to the 2003 IECC.7DOE is required by the Energy Policy Act of 1992

hroughout history, buildings have changed to address social needs. A dramatic example: the advent of the skyscraper a century ago, which exploited the new technology of steel framing to overcome the scarcity of real estate in teeming American cities. Suddenly real estate extended i