New Homes Account for 3.7% of the US Energy Consumption

The residential sector, including single-family, multifamily, and manufactured housing, accounts for about 21.2% of the US energy consumption, according to the 2020 Energy Information Administration’s (EIA) Annual Energy Review. New homes built since 2000 account for just 3.7% of the total energy consumed in the U.S., according to NAHB’s analysis of the 2015 Residential Energy Consumption Survey (RECS) data from the EIA.

According to EIA’s 2020 Annual Energy Review (covering data through 2019), residential sector’s energy use share has been relatively stable, fluctuating around 21%, since 2000. It was 20.7% in 2000 before the housing boom years when millions of new homes were added to the housing stock.

The housing sector share includes “lost” energy, i.e. energy used by the electrical power sector to generate and transmit energy to homes. This approach is not unique to the housing sector. The EIA consistently allocates electrical power sector’s energy use to the four end-use sectors – industrial, commercial, transportation, residential – based on electricity sales.

Most recently, in 2019, the electric power sector accounted for about 37% of the total US energy consumption that was ultimately allocated across the four end-use sectors. Most of the energy that the power sector consumes is lost before it reaches end users (mostly, when heat energy is converted into mechanical energy to turn electrical generators). Additional losses occur when the electricity is used to operate power plants and during the transmission and distribution of electricity to end users.

In the residential sector, EIA’s current estimate is that 1.9 British Thermal Units (BTUs) are lost in generation and transmission for every 1 BTU of electricity actually used in the home. As a result, two thirds of all electrical energy consumption attributed to the residential sector are energy losses by the electrical power sector allocated to housing.

A different survey by the EIA, the Residential Energy Consumption Survey (RECS), allows analyzing residential end-use energy consumption by type of structure and when housing units were built. The most recent 2015 RECS shows that new housing units are more efficient and use less energy per square foot compared to older units.

Even though newer homes are larger, their average site energy consumption per household is often lower as a result of higher energy efficiency. While a typical US household consumes 77.1 million BTU per year, households occupying units built since 2010 use 67 million BTU per year. This explains why new homes built since 2010, account for 3.2% of the US housing stock but only use 2.8% of the residential site energy. Adding homes built in 2000-2009, increases the share of site energy consumed by newer homes by additional 14.6%. As a result, homes built between 2000 and 2015 account for 17.4% of residential sector’s end-use energy.

Assuming that energy losses related to electric power generation and transmission are proportional to energy used on site by households, new homes built since 2000 account for 3.7% of the total US energy consumption (or 17.4% of the residential share). Homes built prior to 2000 account for 17.6% of the US energy consumption (or the remaining 82.6% of the residential share).

Residential sector’s energy consumption is what drives greenhouse gas emissions attributed to housing. The EIA and Environmental Protection Agency (EPA) usually report total greenhouse gas emissions in million metric tons of CO2 equivalent (MMT CO2Eq), inflating metric tons of non-CO2 gases (methane, nitrous oxide, various hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride) to account for their greater global warming potentials per ton.

According to the latest EPA report “US Greenhouse Gas Emissions and Sinks: 1990-2018”, 90% of residential greenhouse emissions are CO2. While the residential sector accounts for 21% of energy consumption, its share of CO2 emissions is 20%. Furthermore, the residential sector generates very little greenhouse gases other than CO2, and so accounts for less than 16% of total greenhouse gas emissions measured in MMT CO2 equivalents. Excluding greenhouse gases related to electric power generation and distribution reduces the share of residential sector’s emissions to 5.7%.

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