Buildings Actions

Oregon has experience implementing energy efficiency and decarbonization measures in buildings, providing a strong foundation to increase the pace and scale of action needed to achieve our state’s energy policy objectives. This experience includes measures identified by the energy strategy modeling as essential to a least-cost pathway to decarbonization like weatherization, adoption of efficient heat pump technologies, and distributed energy resources. These measures can also advance resilience. Weatherization can help buildings withstand greater temperature swings while protecting indoor air quality from wildfire smoke, and heat pumps can provide efficient cooling and heating. Distributed energy resources, which include solar PV panels paired with battery storage and electric vehicles, can provide backup power as outage frequency increases with extreme weather and public safety power shutoffs.

As the energy wallet analysis showed, heat pump technologies yield significant energy savings, but today would result in higher operating costs for some households or building owners – even when they represent a least-cost economywide option in the long term. In addition to maintaining existing utility- and state- funded programs, additional incentives for heat pumps will be necessary to overcome the upfront cost barrier to purchasing a heat pump and to expand access to efficient cooling for households without it. Programs must include standards for equipment and installation quality to ensure heat pumps live up to their promised energy savings. Programs should also evaluate how to ensure energy burdened households are able to access efficient heat pumps for heating and cooling and to mitigate any bill associated increases. Similarly, it may be necessary to consider how to protect renters where rents may go up following energy efficiency improvements. The strategic electrification steps defined in Building Action 2 will be important to help inform the approach to efficient heat pump adoption.

‍Four main areas of statewide policy support building decarbonization today: the Climate Protection Program sets fuel decarbonization targets; new Building Performance Standards and steadily progressing efficient energy codes will lead to lower-carbon new and existing buildings; appliance standards and labeling programs drive the market toward efficient models; and incentive programs, including federal, state, and utility ratepayer-funded programs, support uptake of the most efficient technologies and measures. Evaluation of these existing policies finds gaps that near-term actions aim to help fill:

• The state lacks an electrification strategy for buildings – particularly residential buildings. A detailed analysis is needed to guide a reliable, affordable, and largely electric trajectory, and to identify least-cost strategies to realize the shift from fossil fuel to clean infrastructure.

• ‍The Building Performance Standard does not cover small commercial buildings or single-family homes, leaving a gap in setting clear direction for this sector.

• The Building Performance Standard is an energy efficiency policy, and while improved efficiency will reduce emissions, the Standard alone will not result in the deep, sector wide decarbonization needed to achieve the State’s clean energy and decarbonization goals.  

• ‍Existing building code and appliance standards set minimum thresholds, and still allow for inefficient and high carbon emitting technologies, equipment and appliances to be sold and installed.

Guidance on strategic electrification would help identify a path to a deliberate transition for residential and commercial buildings, informing compliance with existing regulations, development and updates to Oregon’s Building Performance Standards for new and existing buildings, and setting clear direction for small commercial and residential buildings not covered under the BPS. In addition, it will be important to continue to track federal appliance standards and to be ready to step in with Oregon standards should they be removed.

Existing funding streams are insufficient to achieve the pace and scale of investment needed to decarbonize buildings. An essential feature of existing energy efficiency programs is that support is offered to low- and moderate- income households, and this program focus must continue. At the same time, there are many able-to-pay households, including some low- and moderate- income homeowners, for whom a low- or no-cost loan can overcome the upfront cost barrier of purchasing a high-efficiency appliance. Shifting support to loans for able-to-pay households would help replenish public funds over time as loans are paid back, creating a revolving source of financing that can grow over time. A revolving loan fund would provide attractive financing options for households and allow direct funding to focus more strongly on low- and moderate- income households who are unable to afford upfront costs or financing. The revolving loan fund could complement existing financing programs as well as other mechanisms like on-bill financing supporting clean energy investment in Oregon.

In addition to these priorities, existing state, utility and local programs must continue to be funded. A particular priority is to earmark flexible funding for deferred maintenance measures like a new roof or replacing rotting walls to enable households requiring deeper upgrades to benefit from energy efficiency and other decarbonization measures.

These near-term actions are essential to set the groundwork for increased activity over the longer term. As the revolving loan fund gets established and grows, more Oregonians will be able to benefit from low-cost loans. Guidance on strategic electrification should provide a vision for investment in building decarbonization, filling gaps in existing policy, informing recommendations for Oregon’s Building Performance Standards for existing buildings, expected in 2030, and providing background for updates to the BPS for existing buildings over time.