Does the Commercial Energy Code Save Money in Minnesota?

The True Cost of Commercial Energy Code in Minnesota

When building owners hear “energy code,” a common question is: will this make my project more expensive? Construction budgets matter, but upfront cost tells only part of the story. Minnesota-specific research shows that commercial energy code requirements can deliver value both during construction and throughout a building's operating life.  

Two studies help illustrate that value: a Minnesota cost-effectiveness analysis by Pacific Northwest National Laboratory (PNNL) and the 2020 Minnesota Commercial Energy Baseline and Market Characterization Study. 

What PNNL’s Analysis Found for Minnesota’s 2024 Commercial Energy Code

Pacific Northwest National Laboratory (PNNL), a U.S. Department of Energy national laboratory, analyzes new model energy codes to understand their energy and cost impacts, including how those impacts vary by state. For Minnesota, PNNL evaluated the change from the model standard behind the 2020 Minnesota Commercial Energy Code to the standard behind the 2024 code. The analysis used energy modeling for several common commercial building types and construction cost data to compare both upfront costs and energy savings. PNNL found that the newer standard was cost-effective for Minnesota. On a statewide, building-weighted basis, modeled construction costs decreased, while more efficient buildings also produced additional energy cost savings over their operating life¹. 

How can a more efficient building cost less to construct? Efficiency improvements can sometimes reduce costs elsewhere in the project. For example, a better-performing envelope can reduce heating and cooling loads and allow for smaller HVAC equipment, while a lower lighting power density can reduce the number of fixtures needed. Looking at the building as an integrated system provides a more complete picture than evaluating each code requirement as a stand-alone cost. 

2020 Minnesota Commercial Energy Baseline and Market Characterization Study

Minnesota can also realize significant savings by improving compliance with the energy code already in place. A recent field study examined 78 new and majorly renovated commercial building projects.² 

The study estimated that full compliance with code requirements that were not being met could provide approximately $9.7 million in annual energy cost savings.³  

The study also found that capturing these savings does not always mean purchasing more expensive equipment. Many of the biggest opportunities were around controls and commissioning requirements, reinforcing the importance of making sure building systems are designed, installed, documented, and operated as intended.⁴ Minnesota's research suggests that commercial energy codes are more than a regulatory requirement. 

When code requirements are fully implemented, they can reduce energy costs, improve building performance, and help owners capture value long after construction is complete.