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
May 29, 2026
Chairman’s Update: Why You Should Attend NAHB’s Legislative ConferenceIn his latest Chairman’s Update, 2026 NAHB Chairman Bill Owens spotlights NAHB's Legislative Conference, taking place June 10 in Washington D.C., and highlights the messaging members will be focusing on this year.
May 29, 2026
Celebrate National Homeownership Month with New NAHB ResourcesPromote National Homeownership Month this June with NAHB’s online toolkit, a ready-to-use guide to showcase the value of homeownership nationwide.
Latest Economic News
May 28, 2026
New Home Sales Down in April on Affordability ConcernsElevated mortgage rates, higher inflation and economic uncertainty kept more buyers on the sidelines in April as ongoing affordability challenges continue.
May 27, 2026
Multifamily Missing Middle Construction: First Quarter 2026The missing middle construction sector includes development of medium-density housing, such as townhouses, duplexes and other small multifamily properties. The multifamily segment of the missing middle (apartments in 2- to 4-unit properties) has generally disappointed since the Great Recession.
May 26, 2026
First Quarter 2026 Multifamily Construction DataAccording to NAHB analysis of quarterly Census data, the count of multifamily, for-rent housing starts increased year-over-year during the first quarter of 2026. For the quarter, 107,000 multifamily residences started construction.