Massachusetts Climate Report Card - Buildings Decarbonization

The Buildings sector is currently on track for progress to date. Interventions are needed – including scalable solutions to weatherize and electrify homes – to drive the rapid decarbonization required between 2025 and 2030.

Assessment

The Buildings sector is the second largest source of greenhouse gas emissions in Massachusetts, at 35 percent. The Commonwealth's building decarbonization strategies are to maximize energy efficiency, thereby significantly reducing space heating demands, and electrify heating, hot water, and other appliances. The sector is currently on track or leading in all categories as compared to expectations and modeled analytics, but significant, new interventions are needed to meet upcoming 2025 and 2030 targets. Massachusetts uses building codes to drive energy efficiency in new construction and major renovations. Building heat is the largest source of building emissions, necessitating replacement of fossil fuel heat sources with electric heat pumps. The CECP anticipated heat pump installation would be gradual at first and ramp up significantly closer to 2025. National trends indicate this shift is occurring; nationwide, heat pump sales exceeded gas-powered furnace sales by over 10% for the first time in 2022, even before federal incentives under the Inflation Reduction Act became available.¹ Residential heat pump installations through Mass Save rebate offerings in 2022 and in the first half of 2023 have been above expectations, particularly for former natural gas customers, and we are now at about 30% of our 2025 target even before accounting for installations outside of Mass Save such as those done within municipal light plant territories. Heat pump installations through Mass Save have also been accelerating, nearly tripling from 2021 to 2022 and on track to be over 3.5 times greater in 2023. In addition, compared to 2021, 2022 saw a nearly 18-fold increase in full conversions and 2023 is on pace to see over a 30-fold increase. The heat pump adoption rate for new commercial construction is approximately 50 – 90% depending on building type, according to MEPA data. Despite these early successes, sharp increases are needed to meet the state’s building sector targets. Programs are being developed to help increase efficiency and electrification of all building types in the coming years.

Metric	Value	Target
Number of residential heat pump installations	29,721 households had installations from 2020 through the first half of 2023 through Mass Save.	The 2025/2030 CECP estimates heat pumps will be installed in at least 100,000 homes between 2020 and 2025 and at least 500,000 homes between 2020 and 2030.
Number of communities that have adopted the base, stretch, and specialized building energy codes.	Base energy code: 8.5% of the population live in these municipalities (50 cities/towns)   Stretch energy code: 66.6% of the population live in these municipalities (272 cities/towns)   Specialized energy code: 24.8% of the population live in these municipalities (29 cities/towns)	There is no current target for this metric, but increased numbers indicate progress toward highly efficient building envelopes which reduces impacts to our electric system.
Number of residential energy audits and weatherization projects	There were 89,970 residential energy audits and 40,446 weatherization projects in 2022. 9,179 weatherization projects were for low-income participants.	There is no current target for this metric, but increased numbers indicate reduced total energy use in buildings and may allow for smaller and less expensive heating electrification measures.

Challenges

• Massachusetts’ housing stock is old and roughly 80% of the buildings that will exist in 2050 have already been built, making retrofits essential. While decarbonization strategies are feasible and cost effective for new construction,² decarbonizing existing buildings can be more complicated and costly.  

• Residences, which account for more than half of the state’s building emissions, have different energy needs, making one-size-fits-all solutions unlikely.   

• Mass Save operates under statutory cost-effectiveness standards that favor reductions in energy use but may limit opportunities to electrify homes and businesses, which reduces greenhouse gas emissions but does not always result in savings particularly for customers transitioning from natural gas.  

• Incentive-based programs are often designed for homeowners and building owners, limiting access to decarbonization solutions for those who rent.  

• Incentive programs and decarbonization options can be complex and difficult to navigate, particularly if customers need to replace equipment urgently.  

• Massachusetts needs significantly more clean energy workers specializing in HVAC and weatherization.³  

• Electrification without energy efficiency and demand control measures significantly increases energy load, straining the electric grid. 

How we are meeting this moment

• Governor Healey unveiled the Affordable Homes Act in October 2023, which includes $275 million for Sustainable and Green Housing Initiatives to support the creation and preservation of transit-oriented housing and sustainable and climate-resilient affordable housing; $150 million for decarbonization projects at public housing; and prioritizing investments in housing to meet the state’s resilience and decarbonization goals, including compliance with the specialized energy code, Enterprise Green Communities standards, energy efficiency, and electrification. 

• The new specialized energy code requires meeting performance-based Passive House standards to dramatically reduce energy use in new multifamily construction and either full electrification of all space heating, water heating, cooking, and drying, or electrification-readiness wherever gas is used, plus addition of rooftop solar.  It has already been adopted by four major cities (Boston, Cambridge, Somerville, and Worcester) and 25 other communities to date. 

• DOER substantially revised the stretch energy code to include electrification requirements and efficiency standards. As a result, decarbonization in new construction does not significantly increase peak electric loads and also greatly improves resilience during power outages.  

• DOER has secured federal funding to assist communities with implementing the new stretch and specialized codes. 

• The Department of Environmental Protection is developing a Clean Heat Standard to drive heating suppliers to replace fossil heating fuels with clean heat.  

• DOER recently awarded the first $27 million of a $50 million fund to retrofit low- and moderate- income housing across the state. The grants will support the electrification of buildings and prioritize the people most deeply impacted by fossil fuels. 

• DOER is administering a 10-community fossil fuel free demonstration program.  

• DOER is working with the Energy Efficiency Advisory Committee and Mass Save program administrators on the 2025-2027 Three Year Plans. Priorities are centered around advancing the equitable delivery of Mass Save programs, simplifying the customer journey, and furthering building decarbonization beyond just energy efficiency, as well as providing additional support for community partners in their clean energy efforts.   

• Mass Save Program administrators are working towards an all-electric new construction program beginning no later than 2025 so that the majority of new buildings no longer use natural gas. 

• Mass Save program administrators and MassCEC have agreed to increase incentives, education and support initiatives for moderate-income customers located in priority communities.   

• The Community Climate Bank is pairing public and private dollars to decarbonize affordable housing.  

• EEA is analyzing model programs and beginning to stand up a building decarbonization clearinghouse that will serve as a one-stop shop for owners and residents to navigate building energy solutions. The clearinghouse will focus on underserved market-segments to ensure an equitable transformation of the building sector. 

• EEA is launching a climate campaign to increase public awareness, understanding, and interest in the energy transition, including whole-home solutions. It will build off MassCEC’s Clean Energy Lives Here campaign.