Ann Arbor Energy Commission weighs incentives, codes and outreach to speed building electrification

The Ann Arbor Energy Commission held a working session to review incentives and next steps for building electrification, including how city plan-review processes, rebates and state code changes affect developers and small businesses. Chair Paul Harp opened the discussion by framing the meeting as a stock-taking exercise on “electrification incentives and new and existing construction.”

Why it matters: Buildings are a major source of local emissions and the commission and city staff are considering how codes, incentives and outreach together could accelerate conversions away from fossil gas while limiting unintended burdens on developers or small-business tenants.

Commissioners, city sustainability staff, community advocates and residents discussed a mix of supply-side and demand-side levers: optional sustainability reviews during plan review, the timing of state code adoption, the reach of the city’s home energy rebate program, technical support for heat-pump selection and developer-facing education and case studies.

City staff member Joe Lang said the planning review process now includes an optional sustainability review that can flag items such as whether a project includes solar or is fully electrified, but he emphasized it is not mandatory. “Unlike everything else that’s in the plan review, this is not mandatory,” Lang said, adding that the voluntary review has sometimes led developers to add solar or insulation measures on later plan resubmissions.

Lang told the commission the city’s home energy rebate program currently targets existing houses and smaller multifamily units and is under review for how it should or could apply to larger or commercial projects. He reported that roughly $1.9 million in rebates were disbursed in the past year but said that amount could be consumed quickly on a single large commercial project: “You could very much spend that $1.9 million on one project, and then no one else in the entire community gets access to those rebates.”

State code timing was a recurring issue. Commissioners and staff said the commercial codes (which include a solar-readiness element) recently went into effect, while adoption of the 2021 residential code remains pending before the Joint Committee on Administrative Rules (JCAR). One commissioner described three remaining JCAR session days as the critical window for residential-code action. Commissioners stressed the city’s limited ability to require elements that the state code does not mandate.

Community groups pressed for clearer, measurable objectives. Larry Schmidt, chair of the Wolfpack Climate Action Team, urged shifting from the fuzzy term “all-electric” to clear targets: “The objective is zero emissions,” Schmidt said, adding that the group is promoting passive-house efficiency standards as a measurable envelope objective.

Schmidt and other participants described a Wolfpack workshop last year that gathered developers to rank 32 possible incentives; the group plans another, larger workshop in November to convene developers, architects and builders and to develop practical incentives or support mechanisms. Commission members and staff said a developer-facing casebook or short set of local case studies — ideally from the Midwest — would help overcome reluctance to adopt new technologies.

Technical and market questions came up repeatedly. Commissioners and speakers discussed cold-climate heat pumps, dual-fuel strategies (where gas provides backup during extreme cold), and the role of tight building envelopes and ventilation in successful electrification. One developer and several commissioners cautioned that poor early equipment choices or poor envelope design can produce high utility bills that damage a building’s reputation, even if the building was intended to be low‑emission.

On electrical capacity, a Wolfpack representative said the group obtained a letter from DTE stating that, in Ann Arbor, the utility expects to have sufficient distribution capacity to serve all‑electric buildings. Staff noted they have contacts at DTE and can help developers with predevelopment coordination.

Staff described several ongoing city efforts that feed into electrification goals: sustainability review in plan review, outreach to developers, and an online “heat pump concierge” that connects homeowners and small‑multifamily owners to vetted installers and ties into rebates. Staff also reported the city has begun a short-term renewable‑energy procurement with Constellation Energy that will provide a higher share of renewable electricity for roughly 70 municipal sites for the next two years; staff said that purchase will supply about half of municipal electricity use from renewable sources.

Commissioners and community advocates identified gaps and next steps: clearer, auditable definitions for incentives (for example, whether a height bonus requires full electrification or a measurable zero‑emissions standard), targeted technical assistance for HVAC contractors and builders, and a repository of local or regional case studies demonstrating commercially successful electrified projects. Several speakers proposed that the commission, city staff and community groups co‑sponsor the November developers’ workshop and produce a short handbook or “how‑to” casebook for local developers.

The working session did not include votes on policy. Commissioners asked staff to synthesize the discussion into a prioritized list of options the commission could present to the city or use to draft a future resolution.

Commissioner John Mirsky asked for a future item documenting the city’s own building electrification plans and capital‑planning timeline so the commission could track municipal progress toward electrification and zero‑emission goals.

Ending: Commissioners agreed to keep developing the options list, pursue collaborative workshops and return with more concrete recommendations and materials for possible council consideration.