How to Build a Connected Community: Policies to Promote Grid-interactive Efficient Buildings and Demand Flexibility

Efficient, connected, grid-interactive, smart, and flexible buildings are key to decarbonizing the U.S. energy economy, optimizing energy use, reducing electric consumers’ bills, integrating variable renewable energy resources, and improving the reliability and performance of the nation’s electricity grids. Such grid-interactive efficient buildings have high levels of energy efficiency layered with other distributed energy resources (DERs) and intelligent controls to provide demand flexibility.  

Policy support is unfolding at the federal, state, and local levels to transform homes and workplaces into state-of-the-art energy-efficient buildings and community-level grid services. This paper starts by describing the potential benefits. Next, it highlights existing policies — with a focus on state-level actions — that support grid-interactive efficient building deployment and demand flexibility. Finally, it identifies current trends and gaps, policies and programs that promote grid-interactive efficient buildings, and aggregations of grid-interactive efficient buildings referred to as Virtual Power Plants.