Vermont’s 2020 energy standards focused on basic quality and efficiency. In contrast, the 2024 standards are designed to support the state’s Global Warming Solutions Act.

by Compass Vermont

Vermont is currently navigating a complex policy debate that pits aggressive climate goals against the immediate need for affordable housing. At the center of this discussion are the 2024 Residential Building Energy Standards (RBES), which represent the most significant update to building regulations in the state’s history.

Originally intended to be mandatory by mid-2024, these standards faced significant pushback regarding their cost and technical complexity. In response, Governor Phil Scott signed Executive Order 06-25, creating a “dual-track” system. This allows builders and homeowners to choose between the older 2020 standards and the stricter 2024 rules, effectively pausing the full mandate while the state grapples with a historic housing shortage.

Two Paths for Vermont Builders

The 2020 energy standards focused on basic quality and efficiency. In contrast, the 2024 standards are designed to support the state’s Global Warming Solutions Act, moving Vermont toward “electrification” by requiring homes to be ready for electric vehicle chargers and advanced heat pump technology.

To comply with the 2024 code, builders must use a new “Package Plus Points” system. Under this model, a home must meet a strict baseline for insulation and then “earn” additional points by including features like solar panels, triple-pane windows, or high-efficiency water heaters.

The Financial Debate: $1,000 vs. $30,000

A primary source of controversy is the actual cost of building a home to the 2024 standards. There is a significant gap between the estimates provided by state regulators and those provided by the people actually doing the work.

The Department of Public Service (PSD) suggests that the 2024 standards add approximately $1,018 to the cost of a new home. They argue that the monthly energy savings—estimated at roughly $83 per year—will eventually cover the initial investment.

However, the Vermont Builders and Remodelers Association (VBRA) contends the true cost is between $12,000 and $31,000. Industry experts point out that the state’s estimate fails to account for the increased labor costs of complex insulation techniques, the mandatory Heat Recovery Ventilators (HRVs) that can cost up to $6,000, and the higher price of high-performance windows.

Assessing the Benefit: Payback and Diminishing Returns

For many Vermont residents, the debate centers on “diminishing returns.” While the 2020 standards already ensured a relatively efficient home, the 2024 standards pursue much smaller energy gains at a significantly higher upfront cost.

• Projected Savings: The state argues the upgrades pay for themselves in about 12 years through lower utility bills.
• Industry Concerns: Builders argue that if a home costs $20,000 more to build, the payback period could extend to 90 years.

This financial gap creates a challenge for “starter homes.” When regulatory costs increase, it becomes harder for middle-income buyers to qualify for a mortgage, even if the home will eventually be cheaper to heat.

The Enforcement Challenge

A unique aspect of Vermont’s building landscape is that the state lacks a statewide residential building inspectorate. Instead, builders “self-certify” by signing a document stating they met the energy codes.

Critics of the 2024 code argue this creates an “honesty tax.” Builders who follow the new, expensive rules must charge higher prices, while those who ignore them may face little to no oversight. This lack of a “cop on the beat” was a major factor in the decision to delay making the 2024 code mandatory. Furthermore, the official 2024 RBES Handbook was not finalized until September 2025, leaving many professionals without clear instructions for over a year.

What Happens Next?

With the Governor’s Executive Order in place, the choice of which standard to follow currently rests with the builder and the property owner. This dual-track system is intended to stay in place while the state evaluates the impact on housing affordability.

Moving forward, the Building Energy Code Working Group is continuing to investigate how to better enforce energy rules and whether the 2024 standards should be adjusted to be more economically feasible for the average Vermont family.