Making Inroads: Phius 2021 Policy Wrap-up

isaac picIn this week’s blog, Phius Policy Specialist Isaac Elnecave outlines the various incentive programs, QAPs and energy codes that Phius was included in this past year.

The surge of Phius-related policies continued in 2021 with the inclusion of Phius in utility incentive programs, Qualified Allocation Plans and energy codes.

Over the last few years, it has become clear that well-designed policies can significantly spur the construction of projects meeting the Phius standard. In 2021 alone, there have been 47 projects submitted in Massachusetts, 29 projects in New York State and 27 projects in Connecticut (all states with existing Phius-related policies). 

With the calendar turning to 2022, we wanted to take this opportunity to provide a rundown of some of our policy successes from this past year. Below you will find a list of new Phius-related policies (including a number of advancements in Phius’ home state of Illinois).

Utility Incentives

Illinois

ComEd in Illinois has established a pilot incentive program providing money for both pre-construction and upon receiving final certification. ComEd will be taking applications for the program through 2022.  The applications will be reviewed on a competitive basis and will be chosen based on criteria such as size, financial status and timeline. Utilities in Massachusetts (through the MassSave program) and Connecticut (through energizeCT) offer similar programs.

Low-Income Housing Tax Credit

Illinois

The award-winning Finch Cambridge project was funded in part by a Massachusetts incentive program.

The award-winning Finch Cambridge project was funded in part by a Massachusetts incentive program.

The Illinois Housing Development Authority (IHDA) completed the 2022-2023 Qualified Allocation Plan (QAP). The QAP is the document the IHDA uses to evaluate which potential projects will receive tax credits. The evaluation process consists of using a points system (projects with higher point totals are more likely to receive funding). One of the criteria for evaluation is sustainability and/or energy efficiency. In the new QAP, projects receiving a Phius CORE certification will receive 10 points (Phius Zero projects receive an additional three points) out of a possible 100 points. 

Michigan

The Michigan State Housing Development Authority included Phius in its QAP for the first time. Projects meeting the Phius standard will receive four points; most other standards will receive three points or fewer. 

Connecticut

While Phius projects have been included in previous versions of the Connecticut QAP, the updated version gives Phius projects the largest number of points (only projects meeting the Living Futures Standard receive the same number of points). 

Energy Codes

Illinois

The Illinois legislature enacted – and the Governor signed – the Clean Energy Jobs Act (CEJA). Among the requirements included in the 800-page piece of legislation, is that the Illinois Capital Development Board (the agency in charge of developing the state energy code) must include Phius as an alternative compliance path. This means that projects certified by Phius automatically meet code in Illinois.

We at Phius are proud of the inroads we and our community made in the realm of policies, incentives and codes this past year, and we look forward to carrying that momentum into 2022.

New York City Takes Significant Step Toward Electrification

New York City is about to be one step closer to total electrification.

The New York City Council has enacted a bill, which current Mayor DeBlasio will sign, that will ban the use of natural gas hookups on a substantial number of new buildings in the coming years. The ban will apply to all new construction seven stories and shorter starting in December 2023 and for buildings taller than seven stories starting in 2027. 

New York City as seen from 425 Grand Concourse, a Phius project in the Bronx, New York

New York City as seen from 425 Grand Concourse — a Phius project in the Bronx

There are exceptions to the new law, including: multifamily buildings in which more than 50 percent of residents are low-income, some manufacturing facilities, laundromats, crematoriums, hospitals, and commercial kitchens. 

Despite the exceptions, this law will apply to a substantial number of new buildings. From a Phius perspective, this new law is in line with the new prescriptive path for the Phius CORE standard and the Phius ZERO standard which prohibits the use of fossil fuels. Even for projects that do not choose the above standards (projects pursuing the performance path under Phius CORE can use fossil fuel combustion appliances), an increasing number are opting to go all-electric. New York City joins other major cities including Seattle, Sacramento and San Jose in enacting policies restricting the use of natural gas in the built environment. 

Finally, the legislation also mandates two studies: one on the use of heat pumps and a second on the legislation’s impact on the electrical grid. The legislation, however, does not apply to existing buildings.

This new law is part of a larger electrification effort within both the City and State. Members of the New York State Assembly have introduced legislation that would prohibit towns and cities across the state from allowing new natural gas hookups. Exceptions to this requirement would require a project to show that an all-electric approach is either physically or technically infeasible (detailed rules determine infeasibility). Moreover, New York City Housing Authority (NYCHA), New York State Energy Research and Development Authority (NYSERDA) and the New York Power Authority (NYPA) are funding a challenge to space heating manufacturers ($263 million) to develop new products designed for existing multifamily buildings with the aim to spur the electrification market in this important sector. This effort moves in parallel with the heat pump study requirement in the New York City law. 

As we all work together to decarbonize the built environment, we look forward to reporting on many more similar policies in the coming months and years.

Illinois Climate and Equitable Jobs Act is a Policy Victory for High-Performance Building

In September, Illinois Governor J.B. Pritzker and the State legislature enacted the Climate and Equitable Jobs Act (CEJA). CEJA is one of the most comprehensive and ambitious energy bills to be enacted anywhere in the United States; it will have positive and far-reaching effects for years. Unsurprisingly, Phius’ mission to get more energy efficient single-family, multifamily and commercial buildings built will be positively affected. 

tierra linda new 02The 963-page bill (told you it was comprehensive) covers numerous energy-related topics including: 

  • Energy efficiency (more on that below)
  • Zero Energy: The bill sets 2045 (sooner than you think) as the year when Illinois achieves a 100% zero-emission power sector. 
  • Renewable Energy: 50% of Illinois’ energy generated by wind and solar (with intermediate steps)
  • Workforce Training: Funding to get a trained workforce to support the energy transition, particularly in low-income communities
  • Transportation: Rebates for electric vehicles and vehicle charging stations

Energy Efficiency

The legislation devotes significant attention to energy efficiency. Measures include: 

  • Requiring utilities to submit energy efficiency plans past 2030 (currently, 2030 was the last year utilities needed to do this and it’s not like the climate crisis is scheduled to end on January 1, 2031).
  • Requiring utilities to increase spending in low-income communities, with a majority of funding going to whole-house energy efficiency retrofits.
  • Allowing utilities to meet their energy efficiency goals through electrification (importantly, 25% of funding in this area is specified for low-income communities).

Building Energy Efficiency

CEJA also includes groundbreaking requirements directly relating to building energy efficiency (near and dear to the hearts of Phius people everywhere):

  • The legislation mandates a step stretch energy code. The act requires the Capital Development Board (CDB) — the state agency charged with writing the Illinois Energy Efficiency Code — to develop a new code every three years through 2031 with each version more energy efficient than the last. This is important as anyone who follows the progress of the International Energy Efficiency Code knows that the IECC can go several three-year cycles without seeing any improvement.  
  • The CDB shall allow an alternative compliance path for buildings certified as achieving passive house levels of efficiency (the act doesn’t explicitly call out any organization). 

Phius promotes energy efficiency through the expansion of incentive programs and progressively stronger energy codes. States that have incorporated these policies, such as Massachusetts and Connecticut, have seen an explosive increase in the number of high efficiency buildings (including buildings certified by Phius). With the continuing policy advancement in Illinois, we hope/expect to see similar progress here in the future.

Building a ZERO Carbon Future, Together!

Katrin HeadshotPhius Co-Founder and Executive Director Katrin Klingenberg wrote this week’s blog post in advance of her “Zero Energy and the Future of Phius” webinar on Sept. 14. It covers a variety of topics related to Phius’ work and the expanded vision of the organization.

“The west is on fire, and the east is drowning.”

Those attention-grabbing words were the first thing I heard when I turned on my TV the other day.

“The levees held, but the power grid folded”

That was a headline from the day after hurricane Ida swept across Louisiana. Most of the state was left without power; temperatures in the aftermath were predicted to rise into the 100s, all after a ton of rain and flooding. The combination of high temperatures and humidity is life-threatening — on top of all the other hardships brought on by the storm.

And then there was the Texas winter with the grid folding and people and pipes freezing in homes…

The urgency is clear. At our most recent Phius board retreat there was consensus: we are in dire straits climate-wise — it is now or never.

Since its inception, Phius’ vision has had a North Star: to create a carbon-neutral, healthy, safe, and just future for everyone by mitigating the climate crisis. And our mission is to do just that by making passive house and building standards mainstream.

The vision was extended to using passive house and building principles as the basis for all zero-energy and carbon designs. We added the Phius Source Zero certification program in 2012. Net zero is a good first step, but we need to revise the framework. In practice, net zero isn’t enough. 

The conclusion we at Phius have reached — following the thought leadership of our Senior Scientist Graham Wright — is that we need to aim to reach absolute zero in short order to avert the ultimate climate crisis. And that is absolute zero as per the original definition of zero – the absence of a measurable quantity.

A New Brand

We are upping our game on multiple levels in order to emphasize our renewed commitment to solving the ZERO-carbon puzzle for buildings. 

New Brand Same Phius GraphicWe started by reimagining the Phius brand. We are updating its look and making products and messages more relatable without sacrificing what we are known for: scientific rigor, precision, quality assurance, proven guidance, and performance. We are also unifying and expanding our suite of certifications for buildings, products and professionals. We are upping the ante on benefits to our professional members under the Phius Alliance leadership and yes, we are creating exceptionally cool swag to encourage everyone to join our tribe and make it our lifestyle together! Together, our community is creating momentum in the market — and having fun with it!

We also re-organized ourselves internally in more efficient ways over the last year, invested in a new website and a CRM, architecture. And we doubled our staff — to aim for greater, faster and increasingly exponential impact and service for our stakeholders. 

In addition, we are making dedicated efforts to reach out to communities beyond the building industry, to explain why what we do matters to everyone. Renters and owners all have a stake in what we do, and we are all one or the other. We want to give everyone an opportunity to get involved. It is up to all of us now! Join us!

Expanded Vision

Over the last decade, Phius has become the global leader in defining cost-effective and climate-optimized, passive house and building standards. Phius certified projects are now coming in at little or no cost premium compared to conventional buildings. Phius also leads in professional training, certification, and workforce development. We also provide an element critical to mainstream adoption: Quality assurance and risk management.

The building sector accounts for 40 percent of carbon emissions, and is key to achieving emissions reduction goals. Passive house and building principles have been, and will continue to be, CORE to our efforts. In that spirit, the formerly known PHIUS+ building certifications have been renamed and expanded. 

PHIUS+ will now be referred to as Phius CORE (before renewables) and PHIUS+ Source Zero will now be Phius ZERO (based on CORE), and will extend to netting out emissions on an annual basis. New passive house and building retrofit certifications are in the offing as well. Phius CORE REVIVE and Phius ZERO REVIVE, as well as a new commercial building certification called Phius CORE COMM and Phius ZERO COMM will be introduced in 2022. 

Phius certifications have grown exponentially around the continent in recent years. Policy progress nationwide has been impressive to say the least. We are in Tarrytown, New York, for PhiusCon 2021 (formerly North American Passive House Conference) to celebrate the leadership of New York State/NYSERDA in formulating an aggressive climate action plan — a process which Phius helped inform. Other states, such as Massachusetts, have modeled their plans after New York’s. Phius’ pre- and fully certified unit count in Massachusetts over the last few years alone is impressive.

Phius Housing Units (In Process or Complete)

 

The Phius Alliance has expanded nationally, and the global network continues to grow. Phius projects have now been completed or are under way in many countries with varying climate zones. The Phius professional training has been translated into Japanese and has been taught this year successfully in Japan by Phius partner PHIJP.

The last decade was focused on figuring out the building part of the decarbonization equation (mission accomplished — solving for climate, cost, comfort). Now it’s time to expand beyond the building itself. We see Phius buildings as valuable capacitors of the new, renewable grid. They are low-load buildings that have the ability to load-shift and shed, which is immensely beneficial to the optimization of the overall grid design and resilience. 

Phius has begun to assess and measure the benefits of low-load buildings for the overall grid design, including micro and nano grid models. We call this initiative Phius GEB (Phius Grid-interactive Efficient Buildings) led by our Associate Director Lisa White. A pilot for a microgrid Phius community certification is underway. Buildings plug into the grid, and new opportunities for synergies and resilience arise. Design for the best result does not stop at the building envelope or lot line. 

Our new teal-colored logo symbolizes this expanded vision. It is a closed loop symbolizing whole systems design on all levels, aiming at harvesting adjacent system synergies: “The whole is greater than the sum of its parts.” The color teal represents clarity of thought, rejuvenation, open communication and integrity. 

Same Phius

While Phius will be steadily expanding its zero-carbon framework beyond its hallmark passive house and building standards, we will maintain our core competencies of aiding in design, building, policy writing and quality assurance. We are working to solidify and upgrade our foundational programs. Certification staff has doubled and processes are being refined. We are working on getting even better at what we already do well!

The Phius focus has evolved to the broader task of decarbonization. We’ll do so with the same scientific rigor and attention to detail as before. Our goal is the next level of systems optimization so we as a society can make real-time ZERO carbon (not just net) a reality soon!

We hope you’ll join us and continue to trust us to pave the way for the future of decarbonization strategies. There is still lots to do, so let’s get to it!

What are QAPs and Why are they so Important to Phius?

isaac picIsaac Elnecave, a member of the Phius certification team, breaks down Phius’ involvement in the Qualified Action Plans of various states, specifically Illinois and Michigan.

Over the last few weeks, Illinois and Michigan have proposed (and in the case of Michigan, finalized), the latest version of their Qualified Allocation Plans (QAP).  What is a QAP?

A good working description of the QAP can be found at the Illinois Housing Development Agency website: 

The Qualified Allocation Plan (QAP) sets forth the criteria for evaluating all projects that apply for a tax credit allocation. The QAP sets forth the rules under which the IHDA offers affordable housing development funding in the form of federal Low Income Housing Tax Credits (LIHTC). The QAP describes the selection criteria and application requirements for receiving these federal tax credits and tax-exempt bonds. 

Illinois Housing Development Agency Website

The LIHTC, a federal program administered by states, incentivizes the construction of low income housing.  States determine who receives the tax credit through the evaluation of the QAP. 

7_Harry and Jeanette Weinberg CommonsThe QAP is a points-based system. A developer submits a proposed project to the housing agency. The proposed project then receives points based on whether they achieve criteria set out in the QAP. Points can be awarded under a variety of categories such as (please note that each state has its own characteristics): 

  • Building characteristics, 
  • community characteristics, 
  • development team, 
  • financing and 
  • sustainability. 

For example, under building characteristics, a project can receive points for having an increased number of accessible units and engaging in cost containment. Under community characteristics, a project can receive points for being located near public transit. Under sustainability (the category of most interest to Phius readers), a project can receive points for meeting either energy efficiency or green building standards. 

The QAP presents a great opportunity to incentivize the construction of low-income buildings to the Phius standard. In Pennsylvania, when the Pennsylvania Housing Finance Authority awarded significant points to projects built to the Phius standard, the number of projects built to the Phius standard grew substantially.

Illinois 

In the new Illinois QAP, a project that meets the basic Phius designation — Phius CORE — would receive 10 points. If the project meets the Phius ZERO certification, it would receive an additional 3 points, for a total of 13. Thirteen points represents a significant percentage of the maximum 100 points. 

Moreover, the agency structured the point values so that a developer could meet both a green designation such as Enterprise Green Communities and Phius. This provides an additional pathway as receiving a Phius certification is one way of meeting the EGC energy designation.  

The Illinois QAP can be found here.

Michigan 

In Michigan, projects need to meet a minimum threshold requirement (such as EGC), and can receive an additional four points by achieving a Phius certification. So, much like in Illinois, Phius can work in tandem with green standards such as Enterprise Green Communities.  For example, a project that incorporates a Phius certification as part of the EGC requirements would meet the threshold requirement and receive an additional four points toward the overall score — an approach that leverages the strengths of both standards.  

The Green Standard requirements of the Michigan QAP can be found here.

Ultimately, Phius hopes to get its standard as part of the QAP in every state. Currently, there are about a dozen states, primarily in the Northeast, that incorporate Phius into their QAPs. The work in Michigan and Illinois charts a path to broadening the geographic scope of this important incentive program to help promote the construction of Phius certified low-income housing across the entire country.