SBA Issues Strong Rebuke to Transformer Rule Following Builder Input

Regulations
Published
Contact: Alex Strong
[email protected]
Senior Director, Federal Legislative
(202) 266-8279

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.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Leading Suppliers Council | Codes and Standards

Mar 25, 2026

New Electrical Code Change for Kitchen Islands: What Builders Need to Know

For some jurisdictions, the recent revisions to the 2023 National Electrical Code (NEC), specifically Section 210.52(C), change how receptacles can be installed in kitchen islands and peninsulas. But builders, designers, and electricians can consider alternative ways to provide power to kitchen islands.

Membership | Advocacy

Mar 25, 2026

Podcast: 3 Key Focus Areas for NAHB’s Blueprint to 100

On the latest episode of NAHB’s podcast, Housing Developments, CEO Jim Tobin and COO Paul Lopez sit down with 2026 NAHB Chairman Bill Owens to discuss his plans for the year, including the Blueprint to 100 initiative, and what’s happening in Washington.

View all

Latest Economic News

Economics

Mar 25, 2026

Age of Housing Stock by State

According to the latest data from the 2024 American Community Survey (ACS), the median age of owner-occupied homes has reached 42 years old. The age of the housing stock is an important remodeling market indicator.

Economics

Mar 24, 2026

Almost Half of the Owner-Occupied Homes Built Before 1980

Around 47% of the U.S. housing stock was built in the 1980s and earlier. The median age of owner-occupied homes climbed to 42 years old in 2024, up from 31 in 2005 according to the latest data from the American Community Survey.

Economics

Mar 23, 2026

Comparing New and Resale Prices: 4Q25

In the fourth quarter of 2025, the median price for a new single-family home was $405,300, which was $9,600 lower than the median price of an existing home, which stood at $414,900.