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

Economics

Apr 27, 2026

Housing’s ‘Silver Tsunami’ Is Coming, But It Won’t Hit Every Market

The so-called “silver tsunami” describes the wave of millions of homes expected to hit the market as older Americans increasingly decide to sell their properties. However, industry experts are noting that this “tsunami” isn’t landing where it’s needed most.

Membership

Apr 24, 2026

Blueprint to 100: Industry Pulse Check Launches May 1

Blueprint to 100 is NAHB's initiative to build an association that better meets industry needs as we approach the 100th anniversary of our founding. The Industry Pulse Check — launching Friday, May 1 — is our first step in this initiative to gain the insights we need to build an association that meets your needs.

View all

Latest Economic News

Economics

Apr 23, 2026

The Silver Tsunami Isn’t Landing Where It’s Needed Most

The “silver tsunami” refers to the wave of housing inventory expected as older homeowners downsize or transition out of their homes. According to the latest American Community Survey, there are an estimated 61.2 million people in the U.S. aged 65 years or older, representing about 18% of the population.

Economics

Apr 22, 2026

State-Level Employment Situation: February 2026

February’s labor market data point to a notable pullback in employment, with job losses concentrated across a majority of states and only modest gains elsewhere. While January showed solid momentum, February’s decline reflects emerging softness in hiring conditions, alongside uneven performance across the country.

Economics

Apr 21, 2026

Population Growth and Housing Supply Dynamics at the County Level in 2025

U.S. population growth slowed notably in the latest Vintage 2025 population estimates from the U.S. Census Bureau, with the nation expanding by just 0.5% in 2025, roughly half the pace of the prior year. The deceleration was primarily driven by a sharp decline in net international migration (NIM), which dropped from 2.7 million to 1.3 million, while natural change remained relatively stable.