SBA Issues Strong Rebuke to Transformer Rule Following Builder Input
The Small Business Administration’s (SBA) Office of Advocacy has delivered a stinging rebuke to the Department of Energy’s (DOE) proposed rule to regulate energy conservation standards for distribution transformers after NAHB voiced its strong concerns at a recent SBA forum.
At a time when the home building industry is facing a severe shortage of electrical transformers, the proposed rule would dictate that manufacturers increase the efficiency of distribution transformers by a mere tenth of a percentage point. In order to achieve this nominal increase in efficiency, the proposed rule would require manufacturers to transition to a different type of steel that would add months to a lengthy order cycle that already takes more than 16 months to produce and deploy new transformers.
In a seven-page letter to DOE opposing the agency’s proposed transformer rule, the SBA’s Office of Advocacy cited concerns raised by builders during their March 14 teleconference call with the SBA.
“Several [stakeholders] raised concerns about indirect impacts from the proposed rule, including to home building,” the SBA letter stated.
SBA’s letter to DOE went into greater detail regarding home builder concerns regarding DOE’s proposed rule.
“Small home builders noted that delays in transformer installation have led to significant costs to their projects,” the letter noted. “Not having power connected in structures that are already built has led to the potential for mold in the home due to poor ventilation in warmer climates/months.
“Additionally, home builders stated that they cannot close on a home unless the transformer is installed and working, and power is being generated to the home. This creates a ‘winners and losers’ scenario by which utilities are having to pick and choose when and how to connect transformers to a particular development.
“These delays amount to consumers backing out of home closings, and as a result significant costs to the builders. These indirect, cumulative impacts were not adequately considered by DOE in the rulemaking.”
NAHB has also sent comments to the DOE stating how this proposed rule will not only exacerbate the current nationwide shortage of electrical transformers, but also fuel delays in home construction projects across the country as well as aggravating the nation’s housing affordability crisis.
Latest from NAHBNow
Jun 05, 2026
NAHB Completes Fall Prevention Training Pilot Program at 20 HBAs Across U.S.NAHB, the Job-Site Safety Institute (JSI), and the National Housing Endowment (NHE) are proud to announce the successful completion of the Fall Prevention Training Pilot Program.
Jun 04, 2026
U.S. House Price Appreciation Slows from Rapid Pandemic-era PaceHigher mortgage rates, persistent affordability challenges and softer demand weighed on price growth nationally. Local market conditions varied, with some states and metro areas seeing solid gains while others saw declining or flattening house prices.
Latest Economic News
Jun 05, 2026
U.S. Labor Market Remains Resilient in MayDespite rising inflation and ongoing economic uncertainty, the U.S. labor market remained resilient in May. Nonfarm payrolls increased for the third consecutive month, and the unemployment rate held steady at 4.3%.
Jun 04, 2026
Mortgage Rates Increase Further as Inflation Remains ElevatedMortgage rates continued to increase in May as inflation accelerated. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.41% in May, up 7 basis points (bps) over April.
Jun 04, 2026
Highest Paid Occupations in Construction in 2025The median wage of payroll workers in construction was $61,370 in 2025, with the top 25% earning at least $83,480. In comparison, the U.S. median annual wage was $50,980, while workers in the top quartile (the highest paid 25%) earned at least $80,520.