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States and large municipalities across the United States are engaged in a review of their energy codes for residential construction with an eye toward adopting updated energy conservation requirements. They’re doing it because the federal government is offering more than $1 billion in incentives.

But there are choices to be made as two separately funded programs are offering grants for energy code updates. NAHB members and HBAs have an opportunity to help guide state and local decision-making.

• The Infrastructure Investment and Jobs Act (IIJA), signed in November 2021, provides $225 million ($45 million per year from FY22 through FY26) for the Department of Energy’s (RECI) program for states to adopt updated energy codes, without specifying an edition. This means if a state is currently on the 2012 International Energy Conservation Code (IECC), for example, if it moves to the 2018 edition, it may be eligible for a grant.
• The Inflation Reduction Act (IRA), signed into law in August 2022, provides $1 billion to support state and local governments’ adoption of the most recent energy codes, which currently is the 2021 IECC. Only moves to the 2021 IECC will be funded.

It’s important that NAHB members and HBAs emphasize that there is no need for a state to update its energy codes in most cases. Adopting new building codes is expensive, as building departments need to update their procedures, resources and training, which is why federal money was appropriated to help, and can be confusing for both builders and building officials. And increased energy conservation requirements, which always cost more upfront, do not offer home owners the paybacks they are promised.

But if a state must take grant money, NAHB members and HBAs should encourage state and local governments to apply for IIJA (RECI) money rather than IRA money because the infrastructure bill funding does not mandate the adoption of the 2021 edition of the IECC.

The first round of applications for infrastructure bill funding are due March 27, 2023. But this is just the first cycle of funding that will last at least five years. It is important to engage your state’s energy offices and officials.

Funding applications that have partnerships are given preference. The Department of Energy specifically lists “associations of builders and design and construction professionals,” such as state and local HBAs in the NAHB Federation, as acceptable partners for states on applications.

Engage your state and local officials and HBAs now to see if there is an opportunity to partner on an application. Check out these NAHB resources to see which version of the IECC your state currently uses and for more information on partnering with states.