DOE Opens Applications for $400 Million in Energy Code Adoption Grants

The U.S. Department of Energy has announced the opening of applications for $400 million in grants to states that adopt more stringent energy codes. These funds represent a portion of the $1 billion appropriated in the Inflation Reduction Act to spur states to adopt and implement the 2021 International Energy Conservation Code (IECC) and ASHRAE Standard 90.1-2019.

The new program run through the DOE Office of State and Community Energy Programs (SCEP) includes:

• $240 million for states to adopt and implement the latest model energy codes — the 2021 IECC for residential buildings and ASHRAE Standard 90.1-2019 for commercial buildings; and
• $160 million for states to adopt and implement the residential and commercial zero energy appendices in the 2021 IECC.

Only eligible government entities (the 50 states, the District of Columbia, Puerto Rico and U.S. territories) may apply for this funding. To reserve their option to later submit full applications for their allotted funding, states must submit a letter of intent (LOI) to DOE, which has extended the LOI submission deadline to Jan. 31, 2024 from Nov. 21, 2023. States that do not submit an LOI by the deadline will not be eligible for this pot of funding. States that do submit an LOI may submit full applications within the next two years through Sept. 30, 2025. States are NOT required to have already adopted or implemented a qualifying code to be eligible in order to submit a full application. States may submit full applications with plans to formally adopt a qualifying code within a period that may be multiple years in length following approval of the application.

NAHB members and HBAs with questions about the grant program should reach out to NAHB Codes staff.

States may not propose adopting an amended version of the 2021 IECC or ASHRAE 90.1-2019 unless each amendment further increases the stringency as predefined by DOE. Even a combination of amendments that results in an overall energy neutral building performance are not allowed under this phase of the funding program. Adopting the 2024 IECC may be eligible for funding after it is published and DOE issues a positive determination that its energy savings are greater than the 2021 IECC.

State and local HBAs may consider engaging with their state’s energy office and other relevant state agencies to understand their intentions for energy code adoption and their plans for applying for federal funding. You can also view NAHB’s resources on federal incentives for energy codes, including previous DOE funding programs.

The funding allocated under this program must be used for eligible activities supporting energy code adoption, implementation, enforcement and compliance. This could include capacity building, technical assistance, workforce development, code official training and education, the development of software tools, and compliance measurement (which grantees must submit annually to DOE). This program does not support any direct incentives for offsetting construction costs incurred to achieve compliance with the proposed energy codes.