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State and Local Climate and Energy Program

Residential Energy Efficiency

Local governments can reduce energy consumption in their jurisdictions and save homeowners money with residential energy efficiency policies and programs. By promoting energy efficiency and energy efficient products, municipalities can help homeowners in the United States reduce their annual energy bills by an estimated average of $750.

Residential-sector efficiency programs also increase investment in local economies and can provide jobs for skilled professionals such as energy auditors and home energy raters, contractors, as well as retailers and product distributors.

In addition to cost savings and economic benefits, residential-sector energy efficiency programs and initiatives can lower greenhouse gas (GHG) emissions. Nationwide, the residential sector is responsible for 17 percent of total U.S. GHG emissions.

Policy Options for Local Governments

Local governments can adopt a range of policies and programs to encourage energy efficiency in new construction, existing homes, and new products. To support the programs, local governments also can develop financing options to help lower the cost of making energy efficiency improvements in new or existing homes. For each of these mechanisms, local governments may be able to coordinate with electric and gas utilities, regional energy efficiency organizations, trade groups (e.g., home builders, home energy raters, contractors, energy services companies, etc.), product retailers, and others to share information and leverage existing efforts. These stakeholders can help design, develop, and market local energy efficiency programs and policies.

New Home Construction

Local governments can pursue the following policy and program options to improve energy efficiency in the new construction sector.


Local governments can encourage energy efficiency in new homes by providing incentives to local homebuilders who incorporate energy efficiency into their building practices through the ENERGY STAR qualified new homes specification. These homes are at least 15 percent more energy efficient than homes built to current code, and include additional features that typically make them 20–30 percent more efficient than standard new homes. Other benefits include improving home quality and homeowner comfort, lowering energy demand, and reducing air pollution and GHG emissions.

One strategy for local governments is to offer home builders the following incentives for building ENERGY STAR qualified homes:

  • Discounted or delayed permit fees
  • Priority with code processing
  • Increased density allowances
  • Expedited plan approvals
  • Priority field inspections
  • Discounted utility hook-up fees or rates
    • The City of Tallahassee Utilities Exit EPA disclaimer, the municipal utility of Tallahassee, Florida, offers a rebate of $1/square foot (up to $2,000) for ENERGY STAR qualified new homes. Qualifying housing types include single-family detached, single-family attached, low-rise multifamily, and existing-home renovations.

Building Codes

Building energy codes are intended to ensure a minimum level of energy efficiency in new construction. In combination with appliance standards, energy codes that are well-designed, implemented, and enforced can lock in cost-effective energy savings of 30 to 40 percent at the time of building construction compared with standard practices.

While codes are typically adopted at the state level, self-governing municipalities may be able to adopt and implement their own codes. The Database of State Incentives for Renewable Energy Exit EPA disclaimer provides information on the current status of state and local energy codes.

In most states, local governments are also responsible for implementing, inspecting, and enforcing the state code. Municipalities can go even further by providing code-related training and education for builders, inspectors, and other key stakeholders. The Building Codes Assistance Project Exit EPA disclaimer provides information to regulatory and legislative bodies on strategies for effective local-level implementation.

  • Phoneix, Arizona adopted the 2004 International Energy Code, which is estimated to reduce the city's residential energy consumption by 18 percent, residential electricity use by 21 percent, and residential natural gas use by 10 percent, while generating life-cycle cost savings of $11,228 per home.


A home energy rating involves analysis of a home's construction plans and onsite inspections to produce a rating or score based on a standard point scale (typically 0 to 100). One of the most common approaches to home energy rating uses the Home Energy Rating System (HERS) Index. Local governments can require energy ratings in new construction, promote voluntary rating programs, or offer incentives for the use of ratings. Some building codes also require home energy ratings.

  • An ordinance passed by the city of of Santa Fe, New Mexico, requires all new residential single family units built within the city to post their confirmed HERS index rating.

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Site Considerations

Wind, sun, and shade outside a home affect energy use inside. Deciduous shade trees and evergreen windbreaks can be planted and maintained to reduce cooling energy use in summer as well as heat loss from winter winds. Reductions in cooling energy costs from shade trees may range from 7 and 47 percent and are greatest when trees are planted to the west and southwest of buildings.

Local governments can use outreach, communications, or incentives to encourage homeowners to plant (or maintain existing) shade trees and windbreaks. To extend savings further to cover energy use outside the home, local and regional planning agencies can use rules and incentives to promote mixed-use development, walkable neighborhoods, and access to public transportation. For more information on planning and other site-related options, visit EPA's Smart Growth site, EPA's Green Homes site, or the U.S. Green Building Council's Green Home Guide Exit EPA disclaimer.

For example, the Trees for a Green LA Exit EPA disclaimer program, run by the Los Angeles, California, Department of Water and Power, provides Los Angeles residents with free shade trees if they participate in a tree planting and maintenance workshop and submit a program application that includes a site plan.

Home Improvement

While new homes can be designed from the ground up with energy efficiency in mind, existing homes typically offer many opportunities for improvement. To help enhance the energy efficiency of homes in their jurisdictions, local governments can encourage homeowners to perform comprehensive home assessments and implement the recommended measures. These “home energy retrofits” can be a cost-effective way to provide significant energy savings to homeowners as well as improve the health, comfort, and safety of homes. This strategy can also create green jobs, improve the durability of the housing stock, and assist at-need populations. As with new home construction, local governments can coordinate with utilities, trade groups, product retailers, and other stakeholders to complement or leverage existing energy efficiency efforts.

Voluntary Programs

Home Performance with ENERGY STAR (HPwES) and other voluntary home energy retrofit programs offer whole-house, comprehensive approaches to improving residential energy efficiency. Local and regional policymakers can work with existing HPwES programs in their area or consider becoming local HPwES sponsors. Some localities have also proposed or adopted alternative voluntary programs, such as “direct install” initiatives, in which energy-saving retrofits are performed in primarily low-income households. These programs are often conducted using a “neighborhood blitz” approach, with all homes in a targeted neighborhood receiving the retrofits. They can also be done in conjunction with other programs, such as home weatherization or HPwES.

  • In 2005, more than 70 contractors participated in the HPwES program managed by Austin Energy, a Texas-based municipal utility. Through this program, contractors completed 1,400 projects and achieved a peak demand savings of more than 3,000 kW.

Regulatory and Other Direct Efforts

Audits: Energy audits assess how much energy a home consumes and evaluate measures to make the home more energy efficient. However, EPA has found that energy audits alone do not produce energy savings. A key strategy of HPwES is to empower the homeowner with information (via an audit) and create a clear pathway for acting on recommendations. Some local governments have promoted free or discounted energy audits for homes, or have considered mandating audits at the time of sale.

  • Under Seattle's Green Building Capital Initiative, the city is partnering with local utilities to develop and implement an 18-month, 5,000-unit residential energy performance audit and home rating pilot program for small multi-family and single family residential customers throughout the Seattle area.  Homeowners receive detailed information on cost-effective home improvement options and incentives to encourage implementation of energy efficient measures.

Energy Disclosure: Requiring home sellers to disclose their energy bills to potential homebuyers can increase market awareness of energy efficiency and promote the message that a home's energy use is an important factor that home buyers can consider as part of their purchasing decision. Local governments can require or encourage energy performance benchmarking and disclosure.

  • In 2009, New York City passed legislation requiring the owners of large buildings to make an annual benchmark analysis of energy consumption, allowing owners, tenants, and potential tenants to compare buildings' energy consumption.

Improvement Programs: Several localities have considered or adopted mandatory energy efficiency improvement programs that combine elements of several or all of the other types of efforts described above.

  • The city of Berkeley, California's Residential Energy Conservation Ordinance Exit EPA disclaimer requires energy audits at the time of sale (if the home has not already been audited) and when extensive remodeling occurs. If the audit identifies energy efficiency measures required to meet the ordinance's standards, the homeowner must bring the home into compliance within one year after the audit.

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No single clean energy financing mechanism can meet the needs of all customers. Therefore, local governments pursuing a lending program should understand the unique requirements and conditions of targeted sectors and project types. Municipalities can also coordinate with state governments, private lenders, utilities, and other partners to meet the range of financing needs.

Property Assessed Clean Energy (PACE) Bonds

A PACE Bond Exit EPA disclaimer is a bond issued by municipal financing districts or finance companies, with the proceeds lent to property owners to finance energy retrofits. The owners repay their loans over 20 years via an annual assessment on their property tax bill. A growing number of state and local governments have passed enabling legislations for PACE bonds or established PACE programs.

  • The city of Annapolis, Maryland, has established the Annapolis Energy Zone Program Exit EPA disclaimer, a public-private partnership that allows city property owners who privately finance such improvements to voluntarily have the payments on these loans placed on the property owner's tax bills.

Energy Efficient Mortgages

An Energy Efficient Mortgage (EEM) is a mortgage that credits a home's energy efficiency in the mortgage itself. EEMs give borrowers the opportunity to finance cost-effective, energy-saving measures within their mortgage and stretch debt-to-income qualifying ratios on loans, thereby allowing borrowers to qualify for a larger loan amount. EEMs are typically used to purchase a new home that is already energy efficient, such as an ENERGY STAR qualified home. EPA now offers a pilot program on ENERGY STAR Mortgages, which encourages comprehensive energy efficiency improvements to new and existing homes. Local governments can help promote and raise awareness of EEMs among local lenders, realtors, and homebuyers.

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New Products

In addition to the options described above, local governments promote further energy use reductions in the residential sector by promoting energy-efficient products. Leveraging the ENERGY STAR program is an efficient way to encourage homeowners to purchase such products. ENERGY STAR products typically represent the top 25 percent of the most efficient products available, and can be found in more than 60 product categories, including home electronics, heating and cooling, lighting, appliances, and more. ENERGY STAR products can also offer consumer savings of as much as 75 percent relative to standard models.

The following activities demonstrate a few of the many ways that local governments can work with ENERGY STAR.

Consumer Awareness Campaign

The Change the World, Start with ENERGY STAR campaign is a national social marketing campaign inviting Americans to join in the fight against climate change with ENERGY STAR. Local governments can sign up as pledge drivers and promote the program to their constituents.

  • The city of Long Branch, New Jersey, is one of the 54 local governments that served as pledge drivers for the Change the World, Start with ENERGY STAR campaign in 2009. The city enlisted 917 participants and exceeded its emissions reduction goal by more than 600 percent.

Events (e.g., appliance turn-in/recycling)

Hosting a recycling event allows local governments to educate consumers on efficient products and practices, which include recycling appliances and other energy-consuming products at the end of their useful life cycle. Recycling also gives consumers the opportunity to replace the recycled product with a new, energy-efficient model. A recycling event provides a platform to talk to consumers about their upcoming purchasing decision, as well as any applicable incentives. Local governments can host or sponsor product recycling events.

  • The city of West St. Paul, Minnesota Exit EPA disclaimer, holds appliance recycling events twice per year. Participants in the Spring 2009 event brought in 66 appliances, including 20 refrigerators and 10 freezers.

Sales Tax Holiday or Cash Rebates

Sales tax holidays and cash rebates help consumers save money by making it easier for them to install energy-efficient products in their homes and businesses. Many states currently offer exemptions on sales tax for a period of time for certain products, and include ENERGY STAR qualified products on their eligible products lists. Local governments can help promote state sales tax holidays, exempt their own local sales taxes, or provide rebates.

  • In 2009, the city of Rolla, Missouri Exit EPA disclaimer, approved an ordinance to embrace the Green Sales Tax Holiday enacted by the Missouri State Legislature in 2008 and apply it to the city's local sales taxes, exempting retail sales of any ENERGY STAR certified appliance, up to $1,500 per appliance, from taxes during a seven-day period.

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@Home Tool

The ENERGY STAR @ Home Tool provides an interactive room-by-room tour of a home, and provides tips for efficient practices in each room.

Change the World, Start with ENERGY STAR

Change the World, Start with ENERGY STAR is a national campaign encouraging all Americans to make changes at home, at work, and in their communities with ENERGY STAR qualified products and energy-efficient practices.

Home Energy Advisor

The ENERGY STAR Home Energy Advisor provides home improvement recommendations aimed at increasing the energy efficiency of a household. The recommendations are based on the home's location and heating/cooling applications for the home.

Home Energy Yardstick

The ENERGY STAR Home Energy Yardstick is a tool that allows homeowners to compare their home's energy use to other homes across the country. The tool also provides recommendations to improve the home's efficiency.

Home Performance

Home Performance with ENERGY STAR, sponsored nationally by EPA and the U.S. Department of Energy, offers a comprehensive, whole-house approach to improving energy efficiency and comfort at home while helping to protect the environment. Home Performance with ENERGY STAR programs are managed by local sponsors that recruit home improvement contractors who are qualified to perform comprehensive home assessments. Based on assessments, participating contractors offer solutions to fix comfort problems and address high energy bills. The Home Performance with ENERGY STAR Sponsor Guide (PDF) (51 pp, 910K, About PDF), designed for utilities and other energy efficiency program sponsors, covers Home Performance with ENERGY STAR program elements and requirements, implementation, and program design.

HVAC Quality Installation

Heating, Ventilation, and Air Conditioning (HVAC) quality installation guidelines have been set by ENERGY STAR and the Air Conditioning Contractors of America to ensure that heating and cooling equipment runs as efficiently as possible. Local governments can encourage use of the ENERGY STAR Quality Installation Checklist (PDF) (1 p, 310K, About PDF) to ensure that residential HVAC systems are properly installed.

Mortgage/Financing Pilot

ENERGY STAR mortgages encourage comprehensive energy efficiency improvements to new and existing homes by increasing the affordability and availability of energy efficiency mortgages for homeowners and homebuyers. This innovative mortgage/financing pilot program offers borrowers an opportunity to lower their energy consumption while making significant, affordable improvements to their homes.

New Homes

To earn the ENERGY STAR, new homes must meet strict guidelines for energy efficiency set by EPA. These homes are at least 15 percent more energy efficient than homes built to the 2004 International Residential Code. The Technical Resources Web page provides the ENERGY STAR for Homes guidelines. The ENERGY STAR for New Homes Best Practices Guide for Sponsors (PDF) (41 pp, 682K, About PDF), designed for utilities and other energy efficiency program sponsors, covers ENERGY STAR for New Homes program design, marketing and implementation, and program design.


ENERGY STAR provides a list of all qualified products and ENERGY STAR specifications in development.

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ENERGY STAR Publications

Do-It-Yourself Guide to Air Sealing and Insulation

The ENERGY STAR Do-It-Yourself Guide to Air Sealing and Insulation (PDF) (13 pp, 2MB, About PDF) can be used by homeowners to seal and insulate a home to be more energy–efficient.

Financing Guidebook

The ENERGY STAR financing guidebook (PDF) (26 pp, 3.2MB, About PDF) provides an overview of the market trends and financial issues that affect homeowner expenditures on home improvements, and outlines the role efficiency programs and special financing can play in encouraging greater investment in energy efficiency. It is intended for program sponsors that may be considering the development of a new home improvement program or are considering ways to improve an existing one.

Guide to Energy Efficient Heating and Cooling

The ENERGY STAR Guide to Energy Efficient Heating and Cooling (PDF) (24 pp, 1.3MB, About PDF) covers maintaining and replacing heating and cooling equipment, as well as efficient home sealing practices.

Lorax Kids Activity Book

The Lorax Kids Activity Book (PDF) (6 pp, 1.4MB, About PDF) for K–2nd grade students helps children learn about ENERGY STAR and introduces them to the environment and energy efficiency.

Qualified Product Brochures

ENERGY STAR Qualified Product Brochures cover topics such as heating and cooling, lighting, and home electronics.

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