Here is the text version of the webinar, “An Introduction to the ENERGY STAR & ZERH Multifamily New Construction Programs,” presented by the U.S. Department of Energy’s Building Technologies Office in October 2024.
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Gayathri Vijayakumar:
Presentation cover slide, beside the speaker’s live video image:
All right, folks, we're going to actually go ahead and get started. If you're still over in the exhibit halls, we invite you to come take a seat. My name is Gayathri Vijayakumar. I work at Stephen Winter Associates, again, like Aaron mentioned, joined by Sarah, who will join this session today on high-performance multifamily.
First slide of presentation (still with speaker’s live image next to it):
All right, so today's agenda. The ENERGY STAR program and the Zero Energy Ready Homes program are connected, so this is designed to be an introduction to these two programs. But you might have already heard that the Zero Energy Ready Homes program has a prerequisite for ENERGY STAR. So both these programs tend to have quite a bit of overlap. So I'm going to start today talking about the areas of overlap, like the types of multifamily buildings that are able to participate in the programs and the 45L tax credits. And then again, it's an introduction, so I'm going to go high-level overview of the ENERGY STAR multifamily new construction program, give you an overview, an example of some of the program requirements and how to access the documents on our web page. And then also, if you're not already an ENERGY STAR builder partner or rater partner, I'll show you how to get that partnership set up. And then Sarah will go through very similar basic introduction information on the Zero Energy Ready Homes multifamily program.
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All right, so let's first talk about the areas of overlap.
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What do we mean when we talk about multifamily buildings? And it's a lot easier to talk about what we mean by multifamily when we first tell you what's in our single-family new homes program. So both ENERGY STAR and Zero Energy Ready Homes have a single-family new homes program. And so like you would think, it has detached single families included, but it also has some attached units. So detached two family as well as townhomes, those can participate in the single-family new homes program for ENERGY STAR and Zero Energy Ready. But today we're talking about multifamily. So it's multifamily any height – low-rise, mid-rise, high-rise, one story, 100 stories. It's also mixed-use buildings that are at least 50% or more residential. So you can have some commercial space and still participate. For a short time longer we will still allow townhomes to participate in the multifamily new construction program, but in the future those will most likely participate in single-family.
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All right, so these are the buildings that we're talking about today. So most of you have probably heard about the tax credit and seen these big dollar amounts out there. So I'm going to invite you to look at this table. Just stay with me on the first row. If you have a multifamily building that gets certified to ENERGY STAR, each certified unit is eligible for a $500 tax credit. That's per unit and that amount doubles if you go after the Zero Energy Ready Homes program. And we'll talk about which versions of those two programs are needed to get that tax credit. But the second line is where the bigger amounts of money – so you might have seen these dollar amounts floated out there, $2,500, 5,000. So these are only available if prevailing wage requirements are met. So it doesn't have anything to do with the program, but it's about prevailing wage. OK?
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OK, so the ENERGY STAR program, in order to get the tax credit, so it's based on the acquisition date. Historically we talk about just the permit date, and in ENERGY STAR the permit date. So when you start your building, that dictates what version of the ENERGY STAR program is required for certification. And so we have versions like 1.1 and 1.2, and as the numbers get bigger those are more higher-performing programs, versions of the ENERGY STAR program. The tax credit introduced this concept of acquisition date. So unfortunately you have to follow your acquisition date in order to figure out which tax credit you're eligible for. And so if you can reach this QR code through your phone, otherwise just navigate to this website, energystar.gov/45ltaxcredits, I'm going to show you how to figure out acquisition dates and what that means for your projects, and if you're eligible for certain tax credits. Now again, if you were just here to learn about ENERGY STAR, it's usually based on permit date. So the tax credit might be pushing you to a higher level of the ENERGY STAR program, where if you just want ENERGY STAR certification you could just follow your permit date.
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All right, so if you navigated to that website, this is the table you're looking for. So acquisition is sometime at the end of the project. I am not a tax professional. But acquisition is just kind of when you hand over the building; permit is at the beginning. So you kind of have to look into the future – do you have a multifamily building that you're designing right now that could be completed, acquired this year, 2025 or 2026? If that is the building that you're thinking about, that could be certified under ENERGY STAR version 1.1, and it would be eligible for the tax credit. In California and Oregon and Washington, those are looking at slightly more progressive versions of the program. But for most states, you're looking at version 1.1, if you can guarantee your building will be acquired by the end of 2026. Now if that's not the case and you think you're going to be acquired in 2027 … there we go.
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So now let's say you can't predict your construction schedule. Multifamily can be a challenge in terms of predictability. So let's say the building is going to be acquired in 2027, or you're not sure you'll definitely complete in 2026. You would want to be looking at designing a building to meet version 1.2, just to be sure that when the building's acquired you’ll still be eligible for the tax credit. In California, we're looking at version 1.4.
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All right, so that was ENERGY STAR. The Zero Energy Ready Homes tax credit is a little simpler, because the acquisition date isn't even a concept that they have to deal with. It's just based on your permit date. So just follow your permit date and that'll tell you the version of the Zero Energy Ready Homes program that you need to get the tax credit. Again, this is another QR code if you can get it. Otherwise I'm going to show you how to read that table. And we're going to go through an example of a multifamily building that's trying to get the Zero Energy Homes tax credit.
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OK, so in this table, you can see at the top there's a section for national and on the bottom a section for California. A multifamily in Wisconsin, so it's a permit date in January of 2025. So four months from now it's expecting to get its permit. And so it's going to look at the table, and on the far right you can see the project type, multifamily, again, any height to be eligible in our multifamily program. And then based on its permit date, it's looking at that middle column. So you can see by the date of January 1, 2025, it knows it needs to be a multifamily version 2.
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OK, so that's it for the tax credit. So any other tax credit questions, we might come back – sorry, I should have mentioned we are going to do a Q&A at the end. But most of the questions we get are really redirected to your tax professional.
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And so let's go over just kind of the basics of the ENERGY STAR program. And it was good to see that a handful of you have never participated in ENERGY STAR before. And so I'm going to give you a high-level overview of the program and its requirements.
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And so ENERGY STAR, when we introduce the ENERGY STAR program, we like to talk about the fundamental key elements that go into developing an above-code program like ENERGY STAR. It is the fundamental energy-efficiency program that Zero Energy Ready Homes builds from. So as you can imagine, one of the key elements is efficiency. Energy efficiency. That's in the top row there. And also third-party inspections. We find that to be very critical to a building's performance. So the rest are not related to energy. But we're not going to pursue energy efficiency at the sacrifice of comfort, air quality, or durability. So you're going to see all of these work in as mandatory requirements in the program with some flexibility to meet our efficiency goals.
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So let's talk about what it means to be above code in terms of performance. So the ENERGY STAR program is designed to achieve 10% savings over a code-built home, right? So if we're talk about multifamily buildings, we want 10% energy savings in in our apartments. So in order to achieve that performance target, there are three paths available. So we have a ERI path, which is our energy rating index path. That's a modeling pathway. We have our ASHRAE pathway, which is also modeling. This is also moving by itself now. We also have a prescriptive pathway and so that's the non-modeling pathway. So in this map, you can see green, yellow, and blue. So our green state. So prior to the tax credit, we outlined the states that had adopted certain energy codes. So every state adopts an energy code on their own pathway. And so for the green states, they've adopted a certain energy code. And so the ENERGY STAR version 1.1 program was applicable to those states to get them to have 10% savings above their local code. So the yellow states have already adopted the 2021 IECC. So they're on a trajectory to have to do ENERGY STAR version 1.2 in the near future because their state has increased its code. So ENERGY STAR is 10% above code, so they will soon move to version 1.2. And you can see that in California and the Caribbean they have different targets. So what does that mean to be version 1.1? Version 1.1 in that column for the ERI, that energy rating index, we're talking about an ERI target of the low 50s to low 60s. And ASHRAE is 15% over the state code. And again, you can just follow prescriptive requirements and not do any modeling and achieve 1.1. In 1.2, you can see all those numbers in the ERI column get a little bit lower. So now we're talking a mid-40s, low 50s to get national version 1.2, and then ASHRAE, we're talking about 15% over ASHRAE 90.1 2019 and even more rigorous prescriptive measures.
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So if we're looking at the next level, which is what Sarah is going to talk about, the Zero Energy Ready Homes multifamily program, that's designed to be even more savings above code. So we're talking about 15% above the 2021 IECC. And you can see the ERI scores get lower. And so in that ERI column, how do we – how do we calculate those ERI targets? What ENERGY STAR and Zero Energy Ready Homes does is they take their prescriptive requirements, and the software will model those prescriptive requirements. We call that our reference design. So that produces that ERI target. So it gives you a little flexibility. If you're doing the prescriptive path and it was a little too rigid for you and you need some flexibility, you can design a building, and as long as it meets the same ERI – energy rating index target – as a prescriptive path, then you can use that pathway. Now there's another above-code program that you might be familiar with. How many people in here do Phius passive house? OK, a few folks. And so they have a prerequisite for ENERGY STAR and Zero Energy Ready Homes. That's their prerequisite. So in order to streamline all these programs, we developed a pathway using our ASHRAE pathway. So you don't have to do an ASHRAE model. Phius teams do rigorous modeling themselves. So we adjusted our targets to work within the metrics they use. And so in version 1.1, we have an exception to use your Phius targets, and we just modify the numbers. We have a similar target adjustment in 1.2, as well as in Zero Energy Ready Homes. All right, so if you're doing Phius, we've tried to accommodate and streamline your workflow.
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All right, so if you're new to multifamily programs – I think when this program launched back in 2019, people were new to the idea of having these requirements apply to dwelling units as well as common spaces. So we kind of have to keep reminding folks that this does apply to the common spaces, lobbies, corridors, amenities in your multifamily buildings. If you had a mixed-use building, these requirements do not apply to the commercial spaces. And it is also important to know that 100% of the dwelling units have to meet the requirements. So if you have one apartment in a multifamily building that failed to meet a requirement, that has to be corrected before the whole building and all the other units can get their certification. You also might not be familiar with seeing requirements for central systems, systems serving common spaces, or garages. And then if you're not modeling those common spaces, then there are some additional efficiency requirements. And then last, ENERGY STAR does introduce a requirement for – not for benchmarking, but we want our big high-rise multifamily buildings over 50,000 square feet – if we really want them to be above-code, we need to enable them to be above-code for the life of the building. So we do want a strategy in place for them to collect whole-building utility data.
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So moving on from efficiency, the third-party testing. I think we're here at EEBA High Performance builder show – I think everyone understands the value, the inherent value, in third-party inspection. So we do have a rigorous third-party protocol. These raters are on site for multifamily building multiple times, not just at pre-drywall or final. They'll come through maybe even a dozen times depending on the size of your multifamily building to do their inspections. They'll also do performance tests. So they'll do a blower door test to assess the airtightness of your envelope, airtightness of your duct work. They'll do ventilation air flow tests. And again, they're not just testing the dwelling units, they are also looking at the common spaces.
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All right, so moving on, the third-party inspector also. So we have third-party inspections. So you've got oversight on top of oversight. So they have an oversight organization that they work with. This is something that the rater will be affiliated with, a home certification organization. It depends on what path they're choosing, or a multifamily review organization. And again, because we're talking about ENERGY STAR and Zero Energy Ready Homes, there are organizations that provide oversight for both programs. Your rater will just pick the one that has oversight over both, making that very streamlined for you.
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All right, so that's about efficiency and testing. So let's talk about the attributes of an ENERGY STAR building that aren't directly related to efficiency. So the first one we're talking about, comfort.
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So let's talk about our thermal enclosure system. And so there are some mandatory requirements in ENERGY STAR that can't be traded off. So we want a minimum performance for our insulation, our windows. We want the installation of the insulation to be graded at a high quality, and there's some pass/fail air-sealing measures we want inspected. We also want to reduce thermal bridging in our wall. So these are mandatory requirements of the program.
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Now a term if – since a lot of you did not raise your hand earlier, so this is good for an introduction. We throw this term around a lot, the thermal backstop. And thermal backstop is basically the minimum amount of insulation and performance in your windows that can't be traded off, right? You could insulate. You could have a completely uninsulated building and be net zero for energy, but that wouldn't be a very good building. And so we have a thermal backstop. And there is some flexibility, right? So we adopt the code approach called building UA. So just a flexible way to meet these envelope requirements. And it depends on the U-factors and the areas of your envelope. So let's say you're designing this award-winning multifamily building and it has window requirements of a U-factor .30. You've got a roof that has a requirement of R-49, and then the walls require R-20, right? So these are the ENERGY STAR requirements for your multifamily building. How are you going to meet these? And so you're saying, well, guys, I already have a U-28 window that I like to use, so that's good. That meets the requirement. And in your roof you’re planning to do R-60 already, so you're good there. But what you don't want to do is R-20. You really want to do R-15. So when you look at these numbers in isolation, component by component, this would not pass ENERGY STAR, right? But you are allowed to do the UA. And so the UA allows you to take the areas of those windows and the roofs and the walls, and when you compare those, this building actually could comply with that R-15 wall.
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So how do we decide what that top row, what that – the maximum U factors are for your building, right? So we were talking before about the tax credit and what state you live in. So maybe you have an idea that you'll be pursuing version 1.1 for your first multifamily building. Those backstops are the 2009 IECC. Now if you realize that, you know, my acquisition date, that could be off in 2027; I really want to target version 1.2. That's the big difference, right? So these are the 2021 IECC levels for those U factors. And if you're just doing ENERGY STAR in the next like three months, you have access to this exception, which will give you a little bit more wiggle room on those U factors. They're pretty stringent in the 2021 IECC, if you haven't taken a look. So you have a little wiggle room there. But just to note, that's only if you're doing ENERGY STAR. If you're considering doing Zero Energy Ready Homes multifamily, you will not be able to use that exception.
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All right, so moving on in comfort to the next couple bullet points, we have individually sealed dwelling units. And so we do a blower door test, and it's not a whole building blower door test like they would do in Passive House. We actually want to make sure each dwelling unit has airtightness compared to the corridors. And to your neighbors. So this is a blower test that is conducted on a dwelling unit, apartment level.
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We also have right size requirements for our HVAC to ensure comfort in the dwelling units. If you have central systems, we also want a thermostat so you can control your own temperature in your dwelling unit as well as filtration requirements. We also have a requirement for functional testing of the installed HVAC system.
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And so that HVAC system could be graded by your rater if they've gone through the HVAC grading process, or you can have someone who's a functional testing agent or a commissioning agent run through the steps.
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So in terms of air quality, right? So again, these are components of our building we don't want to sacrifice in the pursuit of energy efficiency.
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So in terms of air quality, while these fans use energy and we probably save energy by not putting these fans in, we want air quality. So we want a continuous change of air in our homes, use exhaust fan supply, fan energy recovery. We want local exhaust removed from the building and vented completely to outdoors. So from our kitchens and our bathrooms, we're just following the ASHRAE 622 requirements for these ENERGY STAR requirements.
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And not only do we want to get pollutants out, we would like to minimize how many pollutants we actually generate in the home. Again, we're still talking about an ENERGY STAR program, but we don't want to sacrifice these core benefits. And so if you haven't converted to all electric and you still have combustion appliances, they have to be outside the pressure boundary in your multifamily building.
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And last we have durability. We want these high-performance buildings to be durable. And so the builders, when you become a partner, you agree to create a complete water management system to control water flow in your buildings and keep them out of your envelope.
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All right, so that's a taste of all the ENERGY STAR requirements.
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And so what you need to understand is how to actually get certified. So if you are working on multifamily already, you're just trying to take the next step to ENERGY STAR, this is your team, right? You have a builder, a developer, your GC. You've got your architect. You've got your MEP or HVAC designer. Maybe you have a commissioning agent, right? So on the top row, these are the same players you're going to need for ENERGY STAR. If you are thinking about how are you going to get to that performance target, that above-code performance, and you want to do a whole building model, because you do that for code already, then you're looking for an ASHRAE modeler. And no matter which of the paths you chose, you are going to need a rater, and that rater is going to connect with their multifamily review organization.
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Now if you haven't been to our ENERGY STAR website, if you grab this QR code, it's excellent to bookmark this web page. Some of our documents get updated over time. So having this website as a bookmark is the best resource for you. But if you're new to the program, I want to take a few minutes to walk you through the website so you can find this information after this session. The first thing to know is at the top here. These program documents reflect revision 4. And so we've been talking about versions of the program, and the versions of the program are how we increase stringency, increase performance of our buildings. We do that through something called a version. You heard me say 1.1 or 1.2. So this is a revision. This is something ENERGY STAR does once a year. And so we usually do it in the fall. And these are revisions. This is how we clarify program requirements. So partners ask questions, seek exemptions or alternatives, and we contain those in a policy record. But once a year we repost them. And you'll know it's been reposted because they'll have a revision number in the footer. And so in between those postings we keep the questions and clarifications in a policy record.
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And so if you were to open that up, you are midstream in a project and you're wondering if there is an exemption or an alternative that's been developed for you, you'd pop open the policy record and you would see a page like that, that has the program documents. You could just do a keyword search for a specific item that you're looking for and see if a policy has been changed that you can then use. These are available to use in between revisions.
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So back on the main page, the very first place to grab a document is our national program requirements. So we've been talking a lot about 1.1 and 1.2. So if you were to open up 1.2, it would have a summary of some of the things I've talked about, the buildings that are eligible, what are the partnership requirements, what are the training requirements. And again, a summary of the certification process.
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If you scroll further down that website, these are the program documents that your team needs. So your rater needs to access this rater design review checklist, and this guides them through the design process. They're going to review your designs for compliance, and then when they're on-site doing their inspections, they're going to need this rater field checklist. So those are documents your rater is going to need. Again, if you had a commissioning agent and they want to be your functional testing agent for the purpose of ENERGY STAR, they have their own checklist. They're going to want to look at that and see how that compares to their code scope for commissioning. So we won't have time to go through every single document.
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So I'm going to have you look right here. Nope – well, down here, this download all button. So this is the best resource for you. You can just click this download button. It's a zip file. It's going to download all the program documents, some of the ones I've mentioned but also other ones. We have Excel tools. These are all PDFs that I've been showing you. But we also have them in Excel tools. And there's also examples that have been filled out. So I encourage you to just click that download all button. It's a zip file. You'll have everything, and it'll be nice and organized for you.
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All right, so now you know who your team is. You have a sense of the requirements. You understand the whole entire website. You're going to give this presentation next year at EEBA. So I don't have to use this clicker. But now you want to know how do I actually go through the whole entire process. So you had to join. You had to become an ENERGY STAR partner. So if you were a builder or a rater and you haven't done your partnership agreement, I'm going to show you how to get there. You know what the requirements are now, so you're going to design those. You're going to integrate those into your design, your rater is going to review your design, they might start doing your energy model at that point. Your MEP or your HVAC designer has a report that they have to complete. So this all happening during the design phase. And then once you get into construction, now this is where you're building those things and the rater is onsite making sure they're being built as designed, as well as once the HVAC gets installed, they're doing the tests on those systems. Everything goes as expected and you get your certification. The rater submits all the paperwork to their organization, and you get your certificates. And so now you can market your building as ENERGY STAR. And your rater will give you certificates for each dwelling unit, and you can even purchase a plaque for the building itself.
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So let's take a look at what those certificates look like. So on the left, those are certificates that demonstrate that you've been certified. You're going to want to hold on to those for the tax credit. You can also get one at the building level if you want. And then like I mentioned, you can get a plaque for your building.
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And you can also have these sticky labels to adhere to the electrical panel in each apartment dwelling unit.
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OK, so before I hand things off to Sarah, if you weren't a partner that's the very first step in the process, is to become a partner, if you want to grab this QR code. Otherwise you can join me at energystar.gov/mfnc. You could do this right now. There's no cost to becoming a partner. Everything I've just talked about is summarized in this two-page fact sheet for builders and developers. And if you couldn't get that QR code to work, much like I can't get this clicker to work, here it is on the left navigation. So if you're on our web page, you go to educational resources. There's recorded webinars there, but there's also a technical guidance page where you can get lots of resources. And one of them is this fact sheet. You can see it towards the bottom there. There's two fact sheets, one for single-family new homes and the second one on the bottom is for multifamily new construction.
OK, and so in order to become a builder partner, you actually have to connect with a rater in your area that is already an ENERGY STAR partner so they can help you analyze your plans. And so if you aren't connected with one, this is a QR code that will take you directly to our partner locator. If you can't click on that, again, on that left side of our website you just go to the bottom where it says “Partner Locator.” And then it's going to pull up a directory. Now in this directory – you can see it's very tiny on your screen now – but in the middle there it says “Partner Type.” Just type in or use a drop-down that says “Energy Rating Company.” Select your state. Once you select your state, it's going to find all the ENERGY STAR raters in your area and their contact information. And so you can contact them and start a relationship there. If you haven't done your partnership, it's at the top of the page. If you click on “New Homes” and you go down to join as a partner, then it's going to get you to this page. Again, it's a free agreement. You can get information at either of those two tiles if you're a builder or a rater. Or you can just click on the green button at the bottom to access the join now registration page, and there'll be two links there. You'll see the first link is for builders and then the second one is for raters.
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OK. That is the end of my part. And last bit of information I'll leave for you is our email address, which is [email protected]. I'm going to hand things off to Sarah and wish her the best of luck with this clicker.
Sarah Santiago-Cok:
Thanks, Gayathri, very much for that great introduction to the ENERGY STAR multifamily new construction program. As she mentioned, my name is Sarah Santiago-Cok, and I am part of the team that helps run the Department of Energy's Zero Energy Ready Home program, which we call ZERH, so you'll hear me say that many times during this presentation. And just like ENERGY STAR, ZERH is a voluntary above-code certification program that was developed by the federal government. And it was really developed for builders looking to take an extra step in efficiency and performance beyond the great base of features that an ENERGY STAR certification already guarantees. So let's jump in.
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This chart should look familiar. Gayathri showed this earlier when she was explaining how to figure out which ZERH program version you need to use to claim the 45L tax credit. And as she mentioned, this chart also identifies implementation dates just for program certification. So for ENERGY STAR it's a little more confusing, but for Zero Ready it's exactly the same between qualifying for the tax credit and qualifying for zero ready certification. and so both of these it's based on permit date as well as your building type and your building's location.
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So the program version we're here to talk about today is national multifamily. So we also have a California program version, but we're focusing on national today. And for the national program, multifamily version 2 will be required for projects with permit dates on or after January 1, 2025. So that's the beginning of next year, so just a few months away. And while this program version was released a little more than a year ago, projects with permits issued in 2024, so through the end of this year, can still use version 1 revision 9. But one key caveat is that version 1 revision 9 does not allow permit application date to serve as a permit date, while multifamily version 2 does, just like ENERGY STAR multifamily new construction 1.1 and 1.2.
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So just as a quick example we'll take an apartment building in Rochester, New York. So this falls under the national program acquirements, not California. And the project applies for a building permit in November of 2024 but does not receive it until 2025. Since it can't use permit application date to qualify for version 1 revision 9, then it gets bumped into the multifamily version 2 program version.
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So next we'll go into how ZERH's technical requirements are set up. So requirements for all ZERH program versions including single-family and multifamily fall into three categories, which are mandatory requirements, a performance threshold, and verification requirements, which are basically the same categories you'll recognize in ENERGY STAR.
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So the mandatory requirements are key features that are essential to a building's performance, and there's really a major opportunity cost to not include them in initial construction. So these are things like your building envelope, which would be really hard to retrofit, or some of our electrification readiness measures. The second key component is the performance threshold, and this sets the bar for the building's overall energy efficiency. So it's the same kind of thing we saw with ENERGY STAR. And there's no one specific way to meet this threshold, and we have three different paths, which are ERI, prescriptive and ASHRAE, just the same as Gayathri described earlier but with slightly more stringent targets. And then finally compliance with the first two items, the mandatory requirements and the performance threshold, is verified using our rater checklists. So the third-party rater will come in just like for ENERGY STAR and use these checklists to make sure that all of the critical measures are in place in the building. And that's really just adding a guarantee that the building really does offer all of the great provisions that DOE promises in a certified building.
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So this is just a quick recap of the three paths that are available to meet the efficiency threshold exactly the same as ENERGY STAR that Gayathri mentioned earlier. And you'll note that for ASHRAE 90.1, our targets are a little bit different for ENERGY STAR multifamily new construction version 1.2. The requirement is to achieve 15% energy savings above ASHRAE 90.1 2019, while for ZERH it is 20%. And we have similar graduated savings requirements if you're using the Phius alternative.
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Next we will cover the mandatory requirements for ZERH multifamily version 2 as well as the documents that go with them.
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So the first thing that any builder should recognize are these co-requisite certifications from EPA. And if you've never done ZERH, these are really critical things to be aware of. We require two separate certifications, one from ENERGY STAR and the other from Indoor AirPlus. And you have to be able to get these certifications in order to earn your ZERH certification as well. So ZERH builds on the sound building science, the better-than-code efficiency levels, and the comprehensive package of indoor air quality measures that are provided by these two certifications.
So for multifamily version 2 specifically DOE does require multifamily new construction version 1.2 as your ENERGY STAR prerequisite. So if you're going for the ZERH 45L tax credit under multifamily version 2, you don't even have to worry about any of the different dates that are associated with ENERGY STAR. It's just 1.2. And then for Indoor AirPlus, it's a little bit trickier. It's based on your permit date, since they have just come out with a new program version. So for projects permitted on or before December 31, 2025, so that's the end of next year, projects may use either revision 4 or 5 of version 1. But then starting at the beginning of 2026, we will be requiring IAP's version 2 certified tier. And builders are also welcome to use the gold tier, which is a little bit more stringent, but the certified tier is our requirement. And just a shout-out that there's a session later today right here in this room at 3 p.m. that's going to go over Indoor AirPlus version 2 and all the things that you need to be aware of and look out for that new program version. So be sure to come back at 3 o’clock.
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So as we've seen ZERH multifamily version 2 is designed to build upon the ENERGY STAR certification and provides even higher levels of energy efficiency via the performance target that we've already talked about. But in addition to our gains in the performance, we also have 10 additional mandatory items, which are shown here on the screen, and next we're going to go through each of these one by one.
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So the first specification is for thermal envelope. And DOE's requirement here is actually exactly the same as what Gayathri introduced earlier as part of ENERGY STAR version 1.2, which is the 2021 IECC envelope without the 105% exception that ENERGY STAR provides through the end of this year. And the program also allows the same area weighted average trade-off options that Gayathri eloquently explained with her diagrams earlier, in addition to a choice of using either residential or commercial values for your building. And there are very detailed instructions on how you pick out the values you want to use and how to calculate that UA in our program requirements in our end notes there. Additionally, resources like energy modeling software and the ENERGY STAR multifamily workbook, which is one of those Excel files Gayathri mentioned earlier, those can be very helpful tools in assessing your compliance with the building’s overall UA.
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ZERH also has specific high-performance window requirements for both typical residential windows and architectural or structural class AW windows. There's various names for them. But those are very common in high-rise multifamily construction. I have a few in my apartment. And the values that you see on the screen are mandatory back stop, but they can be met using an area weighted average U factor and SHGC. And we also have some exceptions and pathways for passive solar designs or if your building’s at a very high altitude. And keep in mind that the area weighted average U has to be met using the dwelling unit windows only. This requirement does not apply to common space windows. So for common spaces, you just have to meet the ENERGY STAR 1.2 requirements. The ZERH window requirements are almost the same as the ENERGY STAR reference design, but our residential windows are just a bit tougher in the cold climate zones 6 through 8.
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So moving on from envelope, ZERH also requires keeping all in-unit ducts and air handlers in conditioned space, because significant energy and performance savings can be gained. For instance, if you're in a top-floor apartment and you have your ducts above you in an unconditioned attic, this can add up to 25% to your cooling load in hot climates. So that's why this is a really essential provision. And additionally, routing ducts within your building cavities, which is one of the ways that you can keep your ducts in conditioned space, becomes much easier in high-performance construction, because your ducts are typically downsized, because your loads are lower and therefore you don't need as large of ducts.
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And moving on to water efficiency. So water heating also has a significant energy use impact, particularly in apartments. So as the graphic here shows, water heating makes up a third of the total energy consumption of U.S. buildings with five or more units. So it's a really significant energy use. And while the efficiency of the water heater itself is a big contributor to this energy use, DOE's requirement focuses more on the hot water's delivery system, which can save energy used to heat water on site as well as reducing the energy used upstream at the utility level for sanitation and collection. So we have four provisions related to this water heating distribution system. The first is for WaterSense-labeled fixtures. So this would be your shower heads and your bathroom sink faucets. We have an in-unit pipe storage limit, which is 1.8 gallons. And this is from the source to the furthest fixture. So your source could either be your in-unit water heater or your central recirculation loop if you're branching off of that. If you do have in-dwelling recirculation systems, not whole building systems, then these must have on-demand controls. And then we do allow central recirculation systems that are moving constantly, but there are some pipe insulation criteria that these systems do need to meet to reduce the energy loss. And there are specific requirements for those levels, and you can find those in the national program requirements. And it varies based on the size of your pipes.
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Our next key mandatory measure is for indoor air quality. So just like ENERGY STAR, ZERH really does view IAQ as an essential component to our program, especially since we're continuing to have a very airtight and well-insulated envelope. And we've already covered the primary measure in this category, which is the requirement for IAP certification, which provides some of the key protections that are listed here on the screen. And you'll recall that version 1 revision 4 or 5 may be used through the end of 2025, and then version 2 will be required at the beginning of 2026. And that's based on permit date. The second piece of the ZERH IAQ strategy that also provides efficiency is for a heat or energy recovery ventilator in climate zones 6 through 8, where the energy this technology can save is significant due to the colder temperatures. and these HR-ERVs can be either in-unit or they can be part of a central system.
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The next mandatory provision requires energy-efficient lighting and appliances, which is pretty straightforward but still can be a significant impact. Looking at the charts on the screen, we can see that the biggest energy use, like heating and cooling, have gone down over the past decades, but this increases the relative importance of lighting and appliances, which is why we have a requirement focused on that. So to address this issue, we require ENERGY STAR refrigerators, dishwashers, cloth washers, cloth dryers, and bathroom ventilation fans. And a key thing to note here is that this is required if the builder or developer is installing these items. If they're not installing a fridge or a cloth washer or dryer, then they do not need to be ENERGY STAR certified. And this also does not apply to common spaces. Additionally, we require 100% of in-dwelling fixtures and lamps to be LEDs. So that also does not apply to common spaces. You'd look to the ENERGY STAR requirements to tell you what to do there.
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OK, so our last four ZERH mandatory requirements are readiness requirements, which don't require the installation of an electric technology but ensure an easy retrofit in the future as we move towards electrification. So first, apartments where gas is the primary heating source must be ready for the installation of a future heat pump. And for us, this means that a branch circuit or conduit is installed that terminates within 3 feet of the existing gas furnace, and that's labeled “for future heat pump.” And there's a couple exceptions to that. One obvious one is if you already have an electric system, whether it's a heat pump or electric resistance, you already have that infrastructure in place, so you don't need to worry about it. And then the other is that this only applies if your heating system is in-unit. If you have a central system, you also don't need to worry about this. We don't have any electric ready requirements for central heating systems at this time.
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Our second readiness requirement is for a heat pump water heater. And this has three separate measures. One is that you have a space large enough to accommodate a heat pump water heater, which for us is 3 feet by 3 feet by 7 feet high. And that can contain your existing water heater. So you could already have that space in your design. Second, there has to be an energized branch circuit within 3 feet of your gas water heater, and it has to be at least 240 volts 30 amps, or 120 volts 20 amps. And then third, there needs to be a condensate drain installed within 3 feet of your existing water heater. Just like with heat pump readiness, there's a couple exceptions. One, of course, is if you already have an electric water heater, either a full size or low-boy, or if you have a gas tankless water heater. And there's details on the ins and outs of those exceptions in our program requirements. And then also just like with heat pump readiness, this is not required if your hot water is provided by a central control system.
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The third readiness requirement is for solar readiness. And this has four pieces. So first you have to designate and reserve a solar ready zone, which covers at least 40% of the available roof area, and it has to be free from obstructions. And there's a few other requirements that go with that, which can be found in our PV-ready checklist. And this space can be split into a few areas, or it can be a single area, depending on your roof’s layout. You also need to document the possible pathway for conduit to run from that area to the building’s central electric panel. So you don't have to install conduit, but there needs to be clear documentation showing where the conduit would go when a future system was installed. There also needs to be a certificate posted near the panel that gives all this information to the building's future owner or manager, so that they have it at hand when they want to install PV in the future, hopefully. And the panel also needs to have some space reserved for this PV system. And again, the details are in the PV-ready checklist.
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And our final readiness requirement, and last mandatory requirement, is for electric vehicle readiness. So for multifamily version 2, 20% of the spaces provided for residents, which this could be a shared parking lot, it could be a parking garage, it could even be street parking if it's under the purview of the developer or property manager – 20% of these spaces must be EVSE, EV ready, or EV capable, and half of that has to be EVSE. For this example parking lot, where we have 50 total spaces, 20% of that would be 10 spaces. So we would have five EVSE and five EV ready or capable exceptions – EV ready or capable spaces, excuse me. And there are, of course, some exceptions to this requirement. The main one is that if there is no parking provided by the builder or developer, or the energy use of the parking area is not their responsibility, then you are exempt from all these EV-ready provisions, because you don't have a space to use. There are also some situations where the builder can reduce the number of spaces required if there isn't enough capacity available from the local utility.
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So here are the three types of spaces we're talking about. Starting on the left, EV-capable spaces must have a raceway or cable assembly from the electrical distribution equipment, which would be the panel board, to 3 feet from the space. And this must be sized for a 50 amp circuit, but it does not need to be energized. And then moving over to the right, EV ready is very similar, but it does need to be energized. So that's a step above EV capable. And then EVSE is kind of what you would expect – is a general – a charger is available for use, essentially. So that EVSE stands for “electric vehicle service equipment,” and these must have EV chargers available that can provide 6.2 Kw per space. If an energy management system is used, there are reduced capacity requirements for all of these spaces, but the system needs to be set up so that none of the spaces get cut off during a high-demand event. We are also working on an alternative pathway that reduces this required 6.2 Kw of charging if you have an increased number of spaces provided, and that was in response to some partner requests for options for lower power level 2 chargers, which can work well in residential situations. So be sure to check our program documents. We're coming out very soon with a revision for multifamily, and that option for lower power level charging will be included in those documents.
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And so just quickly, these are our three checklists that I mentioned earlier. The National Rater Checklists covers everything except for PV and EV ready. And then we, of course, have our separate PV- and EV-ready checklists. Those are on their own, because they have a few more complicated requirements that all work together. And there's a QR code on the screen there to find all of those documents.
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These documents can also be completed using the ENERGY STAR multifamily workbook, which now has ZERH addenda tabs. So you can use this one tool to complete all the documentation for your project, so it's a nice way to streamline through the two programs.
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And then just a few final notes on getting started with the program before we open up for questions.
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The process is parallel to what Gayathri described before. So the three programs line up at every step. You do need to sign separate partner agreements for each of the programs, but as you're designing your building, you take all the requirements into account at once. You can often have the same modeler and consultant team working with you to integrate those elements into your building. Of course, they're all constructed at the same time, and as the rater comes to do their ENERGY STAR verifications, they check on IAP and Zero Ready as well. And as Gayathri mentioned, there are oversight organizations we have, which can line up between the two programs. And at the end, you get three federally recognized certifications as well as eligibility for the 45L tax credit.
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So if you're not a partner yet, here's a QR code. And you can head to Partner Central on the Zero Energy Ready Homes program web page. And it's the same thing as with ENERGY STAR. You just sign a partnership agreement. It's free to join. And then you'll be listed on our list of partners on the website.
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So for more information on the program, feel free to visit our web page at buildings.energy.gov/zero. That could be a commercial there. And on that website you can find our DOE Tour of Zero, which is a really great resource and has lots of award-winning home homes, some of which are going to be featured at tonight's Housing Innovation Awards. Additionally, we have an education hub that's got all sorts of training videos for the programs, as well as some written resources. And then we also have a page that's dedicated to 45L and ZERH.
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So just to recap, ENERGY STAR has a great efficiency baseline and ZERH adds efficiency, indoor air quality, and future readiness measures. The programs have the same building types, the same compliance pathways, and the same process.
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So here is our contact information and I will open it up for questions.