Alignment Opportunities

Housing Tax Credit supported developments can select a green certification including Leadership in Environmental and Energy Design (LEED) for Homes and Multifamily Mid-rise, Enterprise Green Communities (EGC), and National Green Building Standard (NGBS). To enhance competitiveness in project applications, developers can pursue advanced pathways such as Zero Energy Ready Homes (ZERH) or Passive House Certification (PHI, PHIUS). To learn more about how these programs compare, please reference “A Comparison of Multifamily Green Building Certifications.”(PDF) There are a few green certification energy requirements that are important to understand in order to identify alignment opportunities:

• The current version of the NGBS (2020) Energy Chapter references the 2018 IECC as a baseline. While the certification program offers both prescriptive and performance-based pathways for energy compliance, NGBS does not mandate energy performance that exceeds the minimum requirements established by the 2018 code. The next version of the NGBS (2024) is expected to align with the 2021 IECC as a baseline.
• LEED and EGC both require ENERGY STAR building certification for new construction. The ENERGY STAR Multifamily New Construction (MFNC) certification is a rigorous energy standard that results in better energy performance. The standard imposes above code minimum system requirements and construction phase testing that often increases project cost.

Since Colorado is a home rule state, municipal and county jurisdictions have adopted different editions of IECC, many times with custom amendments. However, the majority of jurisdictions currently have the 2012, 2015, 2018, or 2021 version of the IECC in effect. State climate action goals and bills passed by the Colorado General Assembly in recent years (HB22-1362, HB23-1233), are beginning to push more jurisdictions to adopt 2021 IECC.

Alignment Opportunity 1: Projects that have tight construction budgets and are located in a jurisdiction that has adopted the 2018 IECC or older may want to consider NGBS certification.

This will allow a code-compliant design to also satisfy green certification energy requirements. Funds that would otherwise be spent on higher performance energy systems can go to other NGBS sustainability features and building investments that better align with project goals.

Alignment Opportunity 2: Projects that pursue EGC or LEED may consider pursuing the 45L Tax Credit.

Because these green certification programs require ENERGY STAR certification, they will pre-qualify projects for the 45L Tax Credit. Note that higher levels of the tax credit can be secured via Zero Energy Ready Home (ZERH) certification and meeting prevailing wage requirements.

Alignment Opportunity 3: Projects that are subject to 2021 IECC may consider pursuing either EGC or LEED along with the 45L Tax Credit. 

The 2021 IECC increased energy requirements compared to previous versions. As a result, there is less of a cost difference between systems required by the energy code and those required by ENERGY STAR MFNC. Additionally, many of ENERGY STAR’s construction phase testing requirements are also mandated by 2021 IECC - see the charts below for more detail. (Note that the applicable code section, Residential vs. Commercial, is determined by building height for multifamily buildings. Unless otherwise amended,  three stories and under fall under Residential sections while four stories or above fall under Commercial sections of the IECC.) 

Alignment Opportunity 4: Projects pursuing Zero Energy Ready or Net Zero design demonstrate high alignment with CHFA’s energy efficiency and sustainability guiding principle.

These projects might consider a comprehensive review of energy funding opportunities, as several funding programs will be available to help offset higher costs associated with above code systems.

In recent years, Colorado made significant strides toward advancing sustainable building practices through legislative measures, notably HB22-1362 and HB23-1233. These bills introduced the Colorado Model Electric Ready and Solar Ready Codes, which establish standards for new construction to facilitate the integration of electrification, electric vehicle charging infrastructure, and solar photovoltaic systems. The Colorado Energy Office (CEO) oversees development of these code requirements and monitors the jurisdictional adoption of these codes, with specific triggers that vary based on a jurisdiction's code cycle and the timing of the 2021 IECC adoption.

The table below summarizes the overlap between the state model codes, green building certification programs, and the Housing Tax Credit Qualified Allocation Plan (QAP) published by CHFA. While EV-readiness, Solar-readiness, and Electric-readiness are not required as a prerequisite in any of the green building programs, these codes align with elective options that help achieve program certification. The state Solar-Ready and Electric-Ready codes correspond with EGC program electives, while the EV-ready code corresponds with NGBS program electives. All three state model codes support either mandatory or elective options within the QAP.

Whole building energy modeling uses physics-based software to calculate energy performance based on a selected set of building characteristics. Predictive energy modeling can help teams determine if a particular new construction design or retrofit will meet Energy Use Intensity or greenhouse gas emissions targets required by Building Performance Colorado (or other jurisdiction building performance standards). Predictive modeling works by calibrating energy models to actual or expected occupancy, operating schedules, and utility consumption. This improves the model’s ability to accurately estimate energy performance post retrofit or construction.

Code energy modeling, while less useful for estimating actual energy use, can be a flexible and cost effective pathway to meet IECC requirements. The two typical methods used to establish energy code compliance are outlined below: