Construction Cost Savings Through Performance Path Energy Code Compliance

By Jacob Goodman, LEED AP – PCD Engineering

Building energy codes are becoming increasing stringent, putting Energy Code compliance front and center in the minds of the design and construction team when embarking on a building project. Meeting the prescriptive requirements of the local energy code can become a costly headache without thoughtful, early planning. While all buildings must meet the mandatory provisions of an energy code, the design team has the flexibility to choose between prescriptive and performance-based compliance. The International Energy Conservation Code (IECC) is adopted in much of the United States and contains these two options for compliance. As building energy codes continue their march towards higher and higher efficiency (see figure below), cost of compliance concerns will grow. However, with careful choice of compliance method these costs can be mitigated.

Prescriptive compliance requires that each building component individually meet or exceed the efficiency threshold stated in the code. For example, IECC 2015 for a commercial building requires a minimum of R-30 continuous insulation for the roof of a commercial building in climate zone 5. Similar requirements are given for each envelope component, HVAC equipment efficiency, lighting power density and others. Benefits of this method are that ComCheck compliance is relatively simple and can be completed by the design team with little added effort or specialized training. The drawbacks of this method are limited design flexibility, reduced operating cost savings and potentially higher initial construction cost.

Performance based energy code compliance involves a more integrated process that greatly increases design flexibility. The process for the performance compliance path involves hiring an energy modeling professional such as PCD Engineering to the design team to track building component efficiency values and work with the design team to develop an energy model for code compliance. Energy modeling requires a specialized design team member with expertise in modeling software including tools such as EnergyPlus, eQUEST, Green Building Studio, IESVE, HAP, TRACE 700, to name some of the most widely used. The energy modeler creates a Code Baseline energy model that complies with the minimum requirements of the local energy code and compares this to a Proposed Model reflecting the actual building design. When the Proposed Model demonstrates equal or lower annual energy costs than the Code Baseline, the design will comply with energy code. There are many benefits of performance-based compliance including construction cost savings, ongoing energy cost savings, utility financial incentives/rebates, tax savings and increased occupant satisfaction.

First, performance-based modeling allows for efficiency tradeoffs between building components rather than each component having to meet a specific threshold. For example, an office building in Denver, CO would need to have exterior walls with R-13 batt insulation plus R-10 continuous insulation for a metal stud construction to meet ASHRAE 90.1-2016 Energy Standard for Buildings Except Low-Rise Residential Buildings requirements. However, with the performance compliance path the design team could choose a less expensive wall assembly and rely on the lighting power density saving commonly realized in all modern LED lighting designs to help the design meet code. This would allow the client to build the facility at a lower cost while still meeting energy code. For performance code compliance the code officials only look at overall building energy cost, not individual system values. By finding multiple synergies such as the one described above, the project can save construction cost that more than cover the fees associated with the energy modeling while reducing overall building costs. And operating savings result year-over-year.
Second, the energy model constructed for code compliance can perform multiple functions in the design process by helping to fulfill the requirements of various building certification programs such as Leadership in Energy and Environmental Design (LEED), Enterprise Green Communities, Collaborative High Performance School (CHPS) or Green Globes. In situations where the owner desires or requires certification in one of these programs there are significant scope overlaps that will reduce the overall cost of the energy modeling scope.
Third, once energy modeling and energy efficiency design decisions are being examined side-by-side as is required for performance-based code compliance, there are many utility company and government tax incentive programs that can bring significant amounts of funding to the project. In Colorado, Xcel Energy provides funding under the Energy Design Assistance program where the average incentive of $30,000 can more than cover the modeling cost. Utility programs such as these as also provide monetary incentives to help pay for energy saving upgrades to the building design. Additionally financing programs such as Commercial Property Assessed Clean Energy (PACE) can provide a zero down, low interest loan that can cover 100% of a building energy upgrade or up to 20% of new construction funding by using energy modeling to demonstrate savings above code. The 179D commercial buildings energy efficiency tax deduction also exists and enables building owners to claim a tax deduction for installing qualifying systems and buildings. A tax deduction of $1.80 per square foot is available to owners of new or existing buildings who install (1) interior lighting; (2) building envelope, or (3) heating, cooling, ventilation, or hot water systems that reduce the building’s total energy and power cost by at least 50%. Energy savings must be calculated using qualified energy modeling software.
This begs the question, when to choose performance vs. prescriptive? . A cost-effectiveness assessment should include comparing energy modeling and related design team costs to benefits including potential construction cost savings, operating cost savings, performance incentives/rebates, tax savings, and even life cycle costs. If the choice depends solely on code compliance path alone, the follow could serve as a rule of thumb:

• Buildings under 10,000 sf are least likely to generate enough savings to offset energy modeling costs.
• Buildings between 10,000 sf and 50,000 sf can pay off depending on the complexity of the design.
• Buildings above 50,000 sf are most likely to benefit from energy modeling for performance-based code compliance as building component costs generally increase at a faster rate than energy modeling fees as the building grows.

If performance based energy code compliance is selected it is highly recommended that the design team engages an energy modeler as soon as possible. This will ensure that modeling team and the design team have the flexibility of early deign to discuss and implement modeling recommendations. Early Schematic Design or even in Conceptual Design phase is preferable to later phases. Furthermore, many of the incentives mentioned above require engagement between the design and modeling teams before Design Development phase.

In conclusion, using building energy analysis through modeling to show performance-based code compliance can yield multiple benefits to a building project including construction and operating cost savings, green building certification synergy and monetary incentives. And studies have shown higher performance buildings have higher occupant satisfaction. Coupled with a commissioning process, the final design product delivers a building to the owner that maximizes the operational savings and occupant satisfaction year-over-year for the life of the building.

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