Energy-efficient buildings: optional or mandatory? Energy is no longer cheaper than insulation. That fact is changing the buildings we build and the houses we live in. But although everyone agrees that buildings must use less energy (and everyone hopes they will), there is no guarantee the marketplace alone can do the job and no consensus that the government can or should play a part. Federal and statewide building codes requiring energy efficiency have been proposed, and there has been spotty action with local codes.

By JAMES KROHE JR.

WHEN Neanderthals first lit a fire in the mouth of a cave to warm the chill night air, they invented space heating. They also complicated their economy because, from that point forward, humans have needed to supply themselves not only with food and furs but with fuel for that fire.

Heating, lighting and (more recently) cooling homes, offices and factories consumes much of the nation's energy budget. And of the state's. In 1978 houses and apartments in Illinois used some 628 trillion Btu* of natural gas and electricity. This was nearly 9 percent of the energy consumed by the entire nation in 1978 and about 41 percent of the energy consumed in Illinois. Of that 628 trillion Btu, about 60 percent was used for space heating alone. How — and how well — our buildings use energy, therefore, is important. Most of our buildings were built in the pre-OPEC era, when energy was cheaper than insulation. Making those buildings energy efficient requires retrofitting, a cumbersome and expensive process with energy benefits that are real enough (as high as 30 percent by some estimates) but hard won.

*One Btu or British thermal unit is the amount of heat needed to raise the temperature of one pound of water, initially at 60 degrees Fahrenheit, by one degree Fahrenheit; a trillion Btu is equivalent to the energy contained in about 170,000 barrels of oil or about 45,000 tons of coal.

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What about buildings being built today? Inefficient buildings are not as easy as cars to trade in. A wasteful building built today will go on wasting for a long time. In 1975, a model building code was developed by the American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE) setting forth minimal thermal efficiency standards for buildings. The Illinois Institute of Natural Resources (IINR), the state's energy agency, calculates that, if all the state's new houses and stores were to be built according to this ASHRAE 90-75 code, annual building energy consumption could be shaved by 15 percent. Measured in 1980 dollars, such economies would save the state's homeowners, renters and businesses $10 million a year. "And," stresses Frank Real, IINR director, "those savings are cumulative. The second year, with two years' worth of new building in place, they would add up to $20 million. In three years, $30 million, and so on. The citizens of Illinois are now paying good money to heat the outdoors. It just makes no sense to continue to build buildings that are energy inefficient."

Energy inefficiency is making deep dents in public budgets too. Taxpayers have to heat and cool schools, offices and hospitals; in fiscal year 1979, the utility bill for the state's colleges and universities alone came to more than $48 million. And the federal Department of Energy (DOE) will spend $32 million in Illinois in 1980 and 1981 in grants to finance weatherization of low-income homes, $11 million less than that for which local agencies had requests.

Predictably, those sectors of the state's economy most sensitive to building energy costs have taken the lead in finding ways to reduce them: businesses on the margin of the economy, others which operate on thin margins (including, increasingly, governments), and those which use large amounts of energy. It is not just the Illinois farmer's spirit of innovation that explains why most of the working solar space heaters in Illinois are attached to pig barns and grain dryers.

Chicago's Sears, Roebuck and Company spent $121 million for energy in 1979, even after stringent conservation programs had saved $37 million. Its hew stores (such as the Vernon Hills store in suburban Lake County which Sears has used as its national energy testing site since 1978) are being designed with lower ceilings, vestibules, enclosed loading areas, fewer windows and other energy saving features.

Illinois architects, builders and energy officials also agree that the new energy economics have led to improvements in the construction of houses and apartment buildings. Rudard Jones of the University of Illinois' Small Homes Council thinks that most of the houses now being built in Illinois are close to the ASHRAE 90-75 standard. Jack Lageschulte, a Chicago-area builder who is the president of the Home Builders Association of Illinois, agrees. "Across the state, builders have responded by thinking more about energy," he says, "for example, by placing the garage on the north side of a house, or adding more insulation and caulking."

Credit for these changes may be given almost entirely to the invisible guiding hand of the marketplace on architects, businesspeople and builders. But the marketplace drives a hard bargain. Building on a budget usually means building to a minimum salable standard; yet people usually compute the cost of a new home on the basis of its purchase price rather than its lifecycle operating costs. Conservation features which push up the purchase price make it harder to sell the house. When 40,000 members of the National Association of Home Builders (NAHB) met in Las Vegas recently, the talk was about how to reduce the soaring purchase cost of housing, a problem caused by inflation and high mortgage interest rates and complicated (according to the NAHB past president) by local building regulations — including, presumably, energy regulations.

The marketplace
Another problem of the marketplace is that energy costs for buildings fall unevenly on the citizenry with the result that energy "costs" are not the same for everyone. The homeowner has relatively few choices when confronted by high heating bills: Buy storm windows if she can afford them, buy a sweater if she cannot, or, move to Florida.

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In at least one state, energy efficiency is required as a condition of utility service. In 1979, the IINR was urging the Illinois Commerce Commission (I1CC) to require that new buildings meet the ASHRAE 90-75 standards as a condition for utility service. (The proposal was never formally made, and I1CC member Charles Stalon says, "As far as I know, we have no authority whatsoever to establish building codes as a condition of utility service.")

Renters' energy decisions are made for them by their landlords, who have little incentive to build efficiently as long as tenants continue to pay rents that escalate with utility bills. Single-metering of new buildings helps, but in a leaky building it merely means that tenants have the option of freezing to save money or keeping warm at their own expense instead of their landlord's.

The same holds true for commercial tenants, although in their case, they are often more willing victims. In Chicago's Loop, the goal of builders is to exploit the maximum square footage of real estate for the minimum cost; the cost of land, not energy, is the motivator. That kind of developmental economics does not place a premium on lifecycle operating costs but rather fosters energy-use escalation, the cost of which is passed to tenants who, in turn, pass it along to their customers. Many institutions are similarly insulated from the costs of energy. Hospitals are an obvious example; their energy costs are not paid by their "customers" directly but are paid by a third party — insurance firms.

Retail firms also pass on energy costs to their customers. Such moves exact less penalty in the marketplace in inflationary eras when price rises are routine; businesses, in effect, pay no energy costs at all, and thus have no incentive to lower them. The federal tax systems even provides a subsidy of sorts for energy waste since it allows firms to write off energy costs against incomes as an operating expense; they thus are shielded from the full impact of such costs, leaving taxpayers to underwrite energy inefficiency.

The tax code is similarly ambivalent about energy saving in new homes. Most recent Internal Revenue Service guidelines establish that key elements in passive solar heating systems (such as ventilating fans and water tanks used as heat reservoirs) qualify for tax credits. But not every such element qualifies. Those that serve a dual purpose (such as a trombe wall, which is a structural member of a house as well as a heat collector) do not qualify. Similarly, ordinary wall insulation qualifies, but insulation attached to exterior siding does not.

Builders and buyers
Indeed, most factors in the decision to build a house or office — like how it will look, of what it will be built, where it will stand and how it will be equipped — have little to do with saving energy. There is simple ignorance by builders and buyers about the costs and cures of inefficiency.

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Lack of information on the part of builders is particularly lamentable because they are so important to energy efficiency (and energy efficiency is so important to them). Speaking in Springfield in March, Denis Hayes, director of Illinois' pioneer Division of Energy in the mid-1970s who now runs DOE's Solar Energy Research Institute (SERI) in Colorado, described a SERI housing project in Denver. Hayes noted that most conservation programs have been aimed at consumers, even though well over 190 percent of the new houses are not designed by their eventual buyers but are built speculatively. With funding from SERI, Denver home contractors were given the money they needed to have architects of their choice take their standard home designs and redesign them for energy efficiency. The changes added 3-5 percent to the construction cost. But the amended homes used one-fifth the energy used by the average new home in Colorado. A simple idea, says Hayes, but, "We worked a revolution with it."

Local governments, like builders, are not opposed to energy conservation as an end, only to compulsory bureaucratic controls as the means. They prefer to rely on the public's judgment. The problem is that the typical home buyer or businessperson rarely knows what an energy-efficient building ought to include. This lack of information, coupled with the costs of building efficiency into a building and the costs of not building it in, makes energy building codes as much a consumer protection tool as a conservation tool.

It is still commonplace for designers to install larger-than-required heating and cooling systems, for example. "Efficiency" can be just as expensive as inefficiency, says the Home Builders' Lageschulte. "Some of the so-called energy-saving products have enormously long payback periods. It's common for an insulation manufacturer to claim that you will save 'X' dollars a year with his product — while in the fine print it says, 'If you have a 12,000 square foot house in Nome, Alaska."

Another impediment to change is fashion. In 1975, the University of Illinois' Small Homes Council published a design for what it called a "Lo-Cal" house featuring double-thick walls, south-facing windows and roof overhangs. But the design has not proved popular, in large part because the house, with its extra wide window sills and compact shape, neither looks like nor is built like a "normal" house. Resistance to new design is breaking down, but very slowly — a minor point were it not for the connection between fashion and finance. Many bankers still refuse to loan money to finance an unconventional building, even when its design is probably more efficient, because they worry that it might be harder to resell in case of default.

Mortgages and utility bills
On the subject of financing, IINR Director Frank Beal, points out, "The banking industry could condition loans to both builders and buyers of a building, because an energy-efficient building is less of a risk to the banks if the buyer doesn't have to choose between paying the utility bill and paying the mortgage." Something like this is being done in Portland, Ore., where, beginning in 1984, it will be illegal to sell or rent a building which has not been weatherized.

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There are no Portlands in Illinois. But Warren Pursell of the Illinois Savings and Loan League (ISLL) says that something like Portland's approach is going on in Illinois anyway. "When a home buyer comes in, we ask them, 'Do you know what your fuel bills will be? How much insulation do you have?' Often, we find that the applicant hasn't thought about these questions, especially if he's never owned a home before." The ISLL offers seminars for member institutions on how to determine the energy efficiency of a building. "Our basic concerns in making a loan are payments of principal, interest and taxes," Pursell concludes. "With the costs of energy increasing as they are, we now consider energy almost a fourth factor."

If the marketplace has made a slow start in redesigning buildings, it may be because the costs of energy still aren't painful enough to compel efficiency. As Anthony Liberatore, the IINR's assistant director for policy and planning, explained recently to an audience at the University of Illinois' Eighth Annual Energy Conference in Chicago, commercial builders are profit-oriented, which means that the rate and level of payback on energy conservation designs must compete with other company investments. When interest rates are high, wasting energy still sometimes costs less than saving it.

Take the case of natural gas. I1CC commissioner Stalon notes, "Because of accidents of history, Illinois has under contract a lot of gas that reflects old prices. The last I heard, for example, Peoples Gas Co. [which serves parts of northern Illinois] was buying some of its gas from Canada at $5 per thousand cubic feet. But Peoples was also buying a lot of gas at 50 cents per thousand cubic feet, so that the average price to their customers is something like $2.50. That means that if the $5 price reflects the current marginal social cost of gas [the current replacement cost as determined by market demand], gas can be obtained in Illinois today at only half its real cost." This occurred, Stalon goes on to say, because "politicians just would not permit the market system to impose on the public the harsh choices caused by rising energy costs."

The role of government
Government cannot avoid those harsh choices, of course, only delay them. And price regulation is neither the first nor the only way in which government involves itself in the marketplace. The presence of government is especially pervasive in the building industry, where it takes the shape of building codes. The market determines what is feasible; government decides how it may be built, and by deciding how buildings may be built, helps determine what is feasible.

Building codes have been on the books of Illinois local governments for decades. They vary in complexity and enforcement. They are alike, however, in that each was an official response to failures of the unregulated marketplace to provide the buildings which people need, as opposed to those they can afford. Traditionally, this has meant buildings that are sanitary and relatively safe from fire. But hazards to public health and safety are no longer the only social ailments that can be prescribed for in building codes. Codes (along with complementary zoning and planning ordinances allowing more flexible lot use) can also mandate energy-efficient building practices and materials.

This is a new role for building codes, and opinion is far from unanimous on whether it is an appropriate one, especially among local government officials. The federal government, however, has seldom been afraid to rush in where local governments fear to tread. The U.S. Energy Policy and Conservation Act of 1975 (EPCA) required states to have the ASHRAE 90-75 standards in effect in all jurisdictions by December 1979, as a condition of receipt of federal energy funds — a stick in the shape of a carrot.

Under federal pressure, Illinois has pushed to adopt statewide energy standards in building codes. The IINR offers training and technical assistance to local governments who wish to strengthen the energy provisions of their own local codes through the Community Energy Conservation Program

administered by the Department of Commerce and Community Affairs. Some 30 cities and counties have received technical assistance to date, and there have been many more inquiries. In addition, in 1978 the Capital Development Board (CDB) adopted the ASHRAE 90-75 code and made it applicable not only to new buildings done under CDB's aegis but to additions and major remodelings as well (see Capital Development Board, p. 16).

Statewide energy codes
But although the State of Illinois has a code for its own buildings, it lacks a statewide building code — and is not alone in this deficiency. Only 28 states have adopted some kind of statewide code, and of these only 15 have lived up to the EPCA requirement that such codes be mandatory in all jurisdictions. The federal carrot in this case is the states' share of federal energy program grants, which in Illinois currently add up to $2.3 million. But the U.S. Department of Energy (DOE) allows for deadline extensions for noncomplying states, and Illinois has been operating under such extensions since December of 1979. Says Steve Thomas of IINR, "The chances are slim that DOE would revoke the grant as long as we continue to make a good faith effort to comply with the law."

That "good faith effort" so far has encompassed seven separate legislative initiatives by IINR. The agency submitted what it called the "Energy Conservation Construction Act" to the General Assembly in 1975; it died in study committee. Other bills have attempted to assign statewide building standard-setting authority variously to the CDB, the I1CC, the Department of Public Health or the former Department of Local Government Affairs. Each died.

It was not until 1979, when S.B. 983 was enacted (P.A. 81-0357), that the IINR won anything at all from the legislature, and that was a watered-down bill that does nothing more than authorize the IINR to provide technical assistance to municipalities who ask for it — and then only if federal money is used.

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This year three legislative proposals dealing with the energy efficiency of buildings have been drafted by IINR and approved by the governor's office. The proposals which will be introduced in the General Assembly would: 1) permit non-home rule municipalities to prohibit or regulate structures or activities which interfere with solar access; 2) prohibit covenants restricting solar use from being added to a deed or contract of sale of a building; and 3) make energy efficiency one of the subjects architects must be tested on in their state exams for certification.

More controversial is any legislation that smacks of a statewide building code. Architects generally support the idea of a statewide code. Builders, in contrast, are unenthusiastic. As Jack Lageschulte says, "I can't imagine anything less efficient than having a state code."

But the stubbornest defense against a statewide code is being mounted by Illinois' local governments. As Tom Fitzsimmons of the Illinois Municipal League (IML) explains, "We are opposed to any statewide building code because we don't want the state telling us what to do. We get to much super-government intervention as it is." The IML's opposition has more to it than jealous regard for local prerogatives. Administering such programs, particularly in areas where no building code presently exists, would be expensive. That is probably why the Bureau of the Budget (BOB) recently squelched an admittedly modest proposal by IINR to require municipalities which already have building codes to incorporate thermal and lighting efficiency standards. In doing so, the IINR politely suggested, they may "consider" ASHRAE standards as a model. The IML has opposed that type of proposal, and the BOB ruled there is no federal mandate for such a bill and that it would come under the State's Mandates Act (P.A. 81-1115) which requires, as of January 1981, that any local government program mandated by the state be paid for by the state. Building code legislation may still be introduced, of course, but probably not under the aegis of the IINR and the governor. Meanwhile, Rep. Jack D. Davis (R., Beecher) has introduced a more modest proposal, H.R. 18, which would form a statewide building code committee to look at all aspects of building codes.

Besides expense, there are also worries that a state standard would prove inflexible, or irrelevant. Or that such a code might soon be superseded by a new federal standard such as DOE's proposed Building Energy Performance Standards (BEPS) which have been argued about since 1976 (see Building Energy Performance Standards, p. 18).

In the absence of a statewide building code, local units are left to adopt model codes or to devise their own codes. Few have done so. Of Illinois' more than 1,300 counties, cities, towns and villages, fewer than half are thought to have building codes; of these, state energy officials estimate that only about 10 percent explicitly address energy conservation.

Most of the municipalities are in urbanized northeastern Illinois. A 1980 study by the Northeastern Illinois Planning Commission (NIPC) of 189 communities in the six-county Chicago area revealed that nearly 65 percent of them used one of the several published model building codes to regulate construction of all or most buildings. In the NIPC survey, the Building Officials and Code Administrators (BOCA) code was most commonly used. Energy provisions added in 1978 made it equal to the ASHRAE 90-75 code in all important respects. "Thus," concludes NIPC, "municipalities that have adopted the 1978 Code theoretically have adopted an energy code." NIPC estimates the number of such towns to be 37. But NIPC also points out that several towns which use the 1978 BOCA code don't use — or have specifically exempted — its energy provisions.

Local energy codes
A few towns in Illinois have adopted their own energy codes. NIPC found 14 in the collar counties, and there are perhaps that many more downstate. One of the more ambitious is found in Carbondale. The city has adopted the ASHRAE 90-75 code, with minor modifications, for its new commercial buildings. It drafted its own residential code, however, which stresses passive solar design. For example, it limits glazing on all walls except those facing south, where unlimited glazing is allowed if it is protected by a roof overhang.

A similar approach was embodied in the so-called Champaign Code. The push for this code began in the fall of 1977 when a Code Review Committee of the IINR began drafting a modified version of the ASHRAE 90-75 code for use in Illinois. The final version of this code was adopted, with further revisions, by the City of Champaign in the spring of 1978, at the urging of IINR.

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The Champaign Code goes beyond ASHRAE in one crucial area. It bases the maximum percentages of single-glazed window area allowed in outside walls on the thickness of the insulation in those walls — the more insulation, the more window space. The code also provides that a house's window area can be doubled if the windows are double-glazed or protected by an appropriate roof overhang. The code is, in effect, an incentive for passive solar design. But the Champaign Code was not adopted by any other municipality, in spite of the IINR's attempts to promote it.

Building codes aren't the only means by which local governments influence building design. Under present zoning ordinances, for example, houses are typically oriented to lot lines and streets rather than the sun. Builders who wish to orient buildings to expose as much of their flanks as possible to the southern sun often find they can't do this on small lots without violating yard setback requirements. J. Randle Shick, a Springfield attorney who specializes in such cases, has written about the problems faced by a suburban Washington, D.C., developer when he tried to build Lo-Cal houses on a 39-unit subdivision. In order to maximize solar effect, he had to obtain zoning variances for virtually all the 39 lots (see Mr. Steele's letter, p. 30).

The NIPC survey did not find one municipality that had incorporated specific energy siting clauses into its subdivision and planning ordinances. The Springfield-Sangamon County Regional Planning Commission, however, has drafted a pioneering ordinance (subsequently adopted by the City of Springfield) that allows developers to deviate from the usual setback requirements if doing so enhances a structure's solar access. Such measures are being talked about in other Illinois cities, but so far they are seldom imitated.

Efficiency isn't just a matter of what to do; it is also a matter of how it is done. To cite just one of a hundred possible examples: a builder may choose to install R-30 insulation bats in a typical attic (R-value or resistance is the ability of a material to retard the flow of heat). But unless the roof line is modified, R-30 bats may be too thick to fit easily into the space near the eaves. Squeezing it to fit squeezes out air and reduces the bats' insulating value to R-19.

Even supporters of tougher codes agree that codes are no cure-all. Implementation is expensive, and inspectors in more than one city must simply take the word of architects and engineers that a commercial building meets all code requirements because they lack the staff to check it themselves. Codes tend also to be inflexible and, because they are compromise documents, are seldom representative of best building practices. Curt Mavis, a builder from Rochester, whose firm specializes in energy-efficient homes, notes that the standards set forth in most standard codes are too lax. "In the South, summers are hot, but you're compensated by warm winters. In the North, you have the reverse — very high bills for heating in the winter but low cooling bills in the summer. Here in corn country you get it both ways."

Writing codes to minimum standards also risks reducing codes to irrelevance. Since 1973, virtually every one of the standard energy building codes has been outrun by events. By the time a new code is drafted, revised, approved and adopted, the building practices it purports to regulate already exceed its requirements. Energy efficiency is a process, not a project. The ASHRAE 90-75 code, for example, is itself being updated to account for stricter conservation standards and new technologies.

Code or marketplace? Government or the public? Money or mandate? The mechanics of Illinois' eventual conversion to efficiency are difficult to identify. The fate of a mandatory statewide code seems shaky, given the general lack of enthusiasm shown for it and the anti-regulatory biases of the new Reagan administration. Lacking a single statewide standard, compliance with what might be called "marketplace" codes is likely to remain spotty. But compliance with existing building codes is uneven too, not just from jurisdiction to jurisdiction but within jurisdictions.

Slow changes
Uniformity of compliance, in short, is probably a pipe dream no matter how it is done. As for building practices, they will continue to change. As energy costs increase, construction techniques now dismissed as too expensive such as the double outside walls of the Lo-Cal house will become more affordable. People will change the way they build homes just as high interest rates have forced them to change the way they buy them. Given the past as guide, many of these changes will be tentative and ineffective. Government at all levels can retard that process of accommodation or speed it up or do both at once, as it does presently. But virtually everyone who builds buildings in Illinois agrees that even if they are not as efficient as they might be, Illinois' new buildings will be more efficient than they used to be — because we won't be able to afford them if they are not.

James Krohe Jr. is associate editor of the Illinois Times in Springfield; he specializes in planning, land use and energy issues.

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