How do we measure the impacts of buildings decarbonization policies?

According to the Energy Information Administration’s 2020 Residential Energy Consumption Survey, Midwestern households are less electrified than those in other regions. 12 percent of homes in the Midwest are all-electric, compared to 25 percent nationwide. Three percent of Midwestern homes primarily rely on heat pumps for space heating, compared to 14 percent nationwide. There are many drivers of this trend, including both economics and public attitudes about technologies. But one piece of this puzzle is of particular importance, especially as greater attention from the building decarbonization community turns toward states in 2025: policy.

Democrats and Republicans often differ on whether policy intervention, regulation, or deregulation and the removal of barriers is the best course of action to promote their goals. Two states, Michigan and Minnesota, seem ripe to provide a useful test case of the Democrats’ vision.

Michigan and Minnesota both gained Democratic trifectas in 2022 — that is to say, control of the Governor’s office, State Senate, and State House. Both were lost following the election of 2024, with a six-seat majority for Republicans in the Michigan State House and a likely tie in the Minnesota State House (Table 1). Those Democratic majorities leaned heavily on new legislation to advance building electrification and decarbonization, and they can serve as a test of Democrats’ vision for how building decarbonization should be carried out. Now that those trifectas are no longer in place, this data story will explore how to measure the legacy of these legislative efforts. How successful were they at advancing their intended goals? Which metrics should we use to evaluate them? It is too early to judge the impact of these sessions, so this data story aims to establish a foundation for understanding their successes or failures over time.

Red cells represent state offices controlled by the Republican party, while blue cells represent control by the Democratic party. Data retrieved on 2/18/2024, before one State House seat in Minnesota’s election results were finalized.

Source: Ballotpedia, CBS News.

Over the past two years, the Michigan State Legislature has been busy. Overall, eight state policies encouraging or supporting building decarbonization and electrification were enacted (Table 2). Moving forward this year, Democrats will control the governorship and a narrow majority in the State Senate (20 D – 18 R), while Republicans will command a majority in the State House (58 R – 52 D).

Source: Atlas Buildings Hub — Spotlight States Dashboard.

Seven buildings policies were enacted between 2022 and 2024, four of which were not appropriations or budget bills. Two measures were enacted to reduce energy waste: one mandated utilities to develop energy waste reduction plans, and the other provided incentives to adopt renewable and resilient energy supplies. The other two centered on workforce development and benefits, including the creation of the Community and Work Economic Transition Office to support job growth as Michigan’s economy shifts amid the clean transition.

The most notable piece of buildings legislation in this period was the fiscal year 2024 budget. Otherwise known as the Make it in Michigan budget, the budget had clearly stated goals, including rebuilding infrastructure. This included $212 million for residential energy efficiency improvements, funded by the Inflation Reduction Act’s federal Home Energy Rebate program. $500 million was dedicated to a Make it in Michigan Fund, alongside $350 million for the Make it in Michigan Competitiveness Fund, both to boost Michigander efforts to obtain federal funding, including for building electrification projects. Another $50 million was appropriated to meet low-income affordable housing needs; these funds may also be used to grant and loan dollars for weatherization, pre-weatherization, and developer assistance.

Finally, Michigan’s fiscal year 2025 budget (Michigan Omnibus Appropriations for FY2024-2025) consists of continuing funding for programs established in previous fiscal years, in addition to ongoing federal funding. Another $5 million was dedicated to pre-weatherization for low-income families, and another $5 million is meant to be disseminated by the Michigan Public Service Commission to a nonprofit green bank, who will subgrant the funding for energy efficiency and renewable energy projects.

In 2025, Minnesota Democrats will control the governorship and a narrow majority of one seat in the State Senate (34 D – 33 R). Thanks to an invalidated election in House District 40B bringing the balance of the chamber to 67 R – 66 D, the parties currently have a power-sharing agreement in the state House and are awaiting the results of a special election on March 11.

Between 2022 and 2024, the Minnesota legislature enacted six buildings-related laws (Table 3). Four of these were budgetary while the other two were a new tax credit and the creation of a finance authority alongside an update to statewide building codes.

Source: Atlas Buildings Hub — Spotlight States Dashboard.

In the 2023-2024 legislative session, the Energy and Natural Resources Budget Appropriation created several new programs: a $13 million heat pump rebate program, a $6.5 million electric panel upgrade rebate program, $39 million for pre-weatherization and weatherization in households not qualifying for the federal Weatherization Assistance Program; $30 million for solar on schools and public buildings; and over $100 million for the first two years of the Minnesota Climate Innovation Finance Authority, 40 percent of which should flow toward projects in areas meeting “environmental justice criteria.” The Department of Commerce’s budget includes $16 million a year for the Strengthen Minnesota Schools Program, $61 million in year one for the Solar for Schools program, and $2.6 million for a pre-weatherization and weatherization training program.

Minnesota also boasts an array of residential and commercial incentives for building electrification, including residential renewable energy generation rebates and tax credits for energy efficiency measures. The Minnesota Climate Action Tax Credit provides up to $2,000 for energy efficiency and climate upgrades, applicable to appliances, weatherization, and larger retrofits; the credit is live through 2027. The legislature took steps this past session to further the state’s capacity for financing by creating the Minnesota Climate Innovation Finance Authority Account. The account leverages public-private financing mechanisms to ease the financing of decarbonization and clean energy projects. The account will be funded at $25 million in June 2025.

Michigan and Minnesota Democrats gained full control of their state governments from 2022 to 2024 and enacted their vision for building decarbonization and electrification. Now that they no longer have full control, it remains to be seen if those laws will spin up and begin functioning. If that happens, it is important to track their progress. This will rely on good data from the states tracking not only GHG emissions, but also the number of homes with efficiency upgrades or weatherization interventions, green spending by financial institutions, and contractors trained by state programs. Table 4 summarizes the metrics that can help track progress towards these laws’ goals.

Source: Atlas Buildings Hub — Spotlight States Dashboard.

Evaluating the success of both states’ efforts will rely on good data on GHG emissions, homes receiving upgrades, contractor training efforts, and financing for building decarbonization projects. As this data becomes available across states, Atlas will work to integrate it on to our platform and continue to showcase important buildings sector statistics tracking building electrification progress through a variety of metrics nationwide.