Will developers block clean energy standards?

State must not allow builders off the hook

LATE IN THE last session, the Massachusetts Legislature passed a landmark climate bill targeting zero greenhouse gas emissions by 2050 and mandating several mechanisms to achieve the goal. Gov. Baker vetoed the bill on the ground that it would make construction too expensive, echoing concerns raised by contractors and developers. The Legislature then passed the identical bill in late January and Baker has sent it back with amendments that will let developers off the hook on moving quickly to high-efficiency building standards. Although the language in the bill could use some clarification, these standards should be non-negotiable.   

The legislation would require the state to achieve net zero greenhouse gas emissions by 2050. This goal would be achieved by increasing energy-efficiency requirements in transportation, buildings, and appliances; and increased reliance on offshore wind and solar power. A key provision would allow cities and towns to adopt net zero codes—meaning that a building is very energy efficient and completelypowered by renewable energy produced either on- or off-site. But this aroused the opposition of real estate interests. Both NAIOP (the National Association of Industrial and Office Properties) Massachusetts and the Greater Boston Real Estate Board, came out against the legislation. (On an array of issues, including rent control, the strategy of developers and landlords has been to use state law to block home rule.) 

The irony of the veto is that the climate bill builds on existing policies enacted under Baker, though it does add more teeth. The Commonwealth’s current three-year energy efficiency plan, governing measures from 2019-2021includes tax incentives and subsidies for developers for both market-rate and low-income housing to build to passive house standards.  

The Massachusetts Clean Energy and Climate Plan for 2030, which is now open for public comment, will be adopted soon. It calls for the Department of Energy Resources to develop a high-performance stretch energy code in 2021 for submission to the Board of Building Review and Standards for cities and towns to adopt in 2022. 

Many state and city programs are supporting these policies. The Massachusetts Clean Energy Center, the state economic development agency accelerating the growth of the clean energy sector, has subsidized several successful projects to acquaint developers with the techniques of highly efficient buildings. Currently, Mass Save offers certification and performance incentives to builders and developers of residential buildings of five or more units and offers 50 percent registration reimbursements for certification courses on construction techniques for achieving the passive house standard. Last year, the Massachusetts Department of Housing and Community Development added bonus points into its scoring system for developers in its Low-Income Housing Tax Credit Program if they build projects to passive house standard. Cambridge’s 2015 Net Zero Action Plan provides a 25-year roadmap to achieving a 70 percent reduction in emissions by 2040.  

The terminology of green buildings can be confusing for those not engaged in the policy. It all started with Leadership in Energy and Environmental Design (LEED). Although its various levels of certification prevail in many cities, it is not the standard to get us to net-zero carbon by 2050. For that, cities and states need to move to passive house, net zero emissions, or zero net energy (ZNE), which are complementary standards. Buildings meeting these standards produce significantly lower greenhouse gas emissions and save their owners money on utilities over time.  

The passive house standard can reduce the need for heating by up to 90 percent, while increasing construction costs by no more than 3 percent, on average. 

Net zero emission standards require buildings to offset any emissions they produce through carbon removal processes, such as investing in forest restoration projects or direct air capture and storage. A zero-net energy building produces enough renewable energy onsite or offsite to equal to the annual energy consumption of the building. These buildings can produce surplus renewable energy that feeds back to regional electrical grid.   

Massachusetts developers are finding all three standards cost efficient. In Fall River, the 50,600-square foot Bristol Community College John J. Sbrega Health and Science Building was constructed in 2016 to ZNE standards without impacting its $31.5 million construction budget. The Commonwealth’s largest net-zero emissions building is the 273,000 square foot complex of the King Open and Cambridge Street Upper School in Cambridge. The complex, comprising two school buildings, a library, and two outdoor swimming pools generates 60 percent of its energy onsite from solar and geothermal sources.   

These are not just one-off examples. Nationwide, all three standards are becoming more common. California required all new residential construction to be zero net energy (ZNE) by 2020 and all new commercial construction by 2030. The state also requires that half of all commercial buildings and major renovations of state buildings be retrofitted to ZNE by 2030. New York City placed carbon caps on new and existing buildings over 25,000 square feet, about 60 percent of the city’s building stock, and offers assistance to meet these benchmarks. The city offers industry professionals technical trainings for meeting standards like passive house and loan financing up to 100 percent of upfront costs for retrofitting commercial and residential buildings. New York state has at least 169 residential, commercial, and institutional passive house buildings, only 96 of which were new construction projects.   

Many states offer subsidies or incentives for achieving or getting close to these standards—particularly for low-income housing. Passive House Institute US, Inc. (PHIUS) lists roughly 16 states that offer incentives and subsidies for passive house development like the ones in Massachusetts mentioned above. The incentives vary in the extent to which they stimulate development, but that’s a matter of tinkering with policy.  

Meet the Author

Joan Fitzgerald

Professor, School of Public Policy & Urban Affairs, Northeastern University
Meet the Author
Gov. Baker should sign the bill as it stands rather than focusing on precise definitions of net-zero. An easy net-zero code has already been submitted to the Board of Building Review and Standards that does not require all buildings to meet the standard. It will have exceptions for labs and other types of high energy use buildings. The immediate need is to move the development and construction community quickly to much higher standards of building efficiency. The climate bill will do that.  

Joan Fitzgerald is professor of urban planning and policy at Northeastern University. Her latest book is Greenovation: Urban Leadership on Climate Change (Oxford University Press, 2020). Greg Coppola is a graduate student in environmental science and policy at Northeastern and part of the Energy Affordability and Equity Team at the New York State Energy Research and Development Authority.