Electrification Requirements

The Energize Denver ordinance(PDF, 985KB) establishes electrification requirements of space and water heating equipment upon system replacement, when cost effective.

Click here for a 10-minute presentation on the electrification portion of the Energize Denver Ordinance. Here is the presentation(PDF, 1MB) used in the video.

Please view the FAQs below to learn more.

FAQs

What are the electrification requirements for buildings in Denver? 

All buildings (regardless of size) are required to partially electrify space and water heating systems upon system replacement when an electric heat pump is a near cost parity with a like-for-like gas system replacement. Requirements phase in over the next five years with the permitting process becoming equal for a heat pump or gas system in 2023, easy-to-electrify system requirements starting in 2025, and hard-to-electrify systems requirements starting in 2027. 

 

What are the renewable heating and cooling (or electrification) requirements? 

Starting in 2023, the Denver Building and Fire Code shall be amended with a phased-in approach to require various electrification upgrades. All buildings will be required to partially electrify space and water heating systems upon system replacement when an electric heat pump is a near cost parity with a like-for-like gas system replacement. The electrification requirements are only triggered when natural gas-fired space and water heating equipment need to be replaced, usually at the end of system life.  

  • On January 1, 2023, the building code will be updated so that permitting is equal for a heat pump and a gas system. Today, permitting a heat pump is harder than a gas system. The City will begin offering incentives to all buildings to prepare the market for requirements to install heat pumps for easy to electrify system types, with a goal that half those incentives go to under-resourced buildings 
  • On January 1, 2025, the building code will be updated so that heat pumps are required upon system replacement for easy-to-electrify space and water heating systems such as furnaces, roof top units, and individual water heaters. Requirements only apply when it is cost-effective for a building to move from gas to a heat pump. The City will shift incentive dollars to help under-resourced buildings comply and will begin to offer incentives to all buildings for the hard-to-electrify system types. 
  • On January 1, 2027, the building code will be updated so that heat pumps are required upon system replacement for hard-to-electrify space and water heating systems such as boilers. By 2027, the City will shift all incentive dollars to help under-resourced buildings comply. 

Shifting to renewable heating and cooling is not only important for the climate, but also to improve equity and safety. We know that gas equipment fails carbon monoxide tests in 40% of low-income apartments and condos in Denver today. And, 95% of these do not have carbon monoxide detectors.

 

Who determines what is “cost effective” for renewable heating and cooling (or electrification)?

Cost-effectiveness is defined in the municipal code in terms of which buildings will qualify for an economic hardship exemption. “An economic hardship exemption will not be available for a system that can be replaced with an electric heat pump at near cost parity, which will be defined as the cost of a replacement of a natural gas space or water heating system to a partially electric heat pump system, including all incentives, that is within five (5) to fifteen (15) percent of a like-for-like natural gas space or water heating system replacement, including the social cost of carbon dioxide of the like-for-like gas system replacement over its lifetime.” Denver’s Offices of Climate Action, Sustainability, and Resiliency (CASR) and Community Planning and Development (CPD) are working together to develop the details regarding how these economic hardship exemptions will work. CASR will develop incentives to assist with electrification feasibility reports.

 

Are there any incentives or rebates available for energy efficiency upgrades?

Please see Xcel Energy’s website for current incentives and rebates that they offer. CASR is currently developing additional incentives and rebates for electrification.

 

How can heat pumps lower my building’s EUI? 

Heat pumps move heat instead of creating it, achieving 200-300% better efficiency. Depending on the type of existing heating in your building (rooftop unit, furnace, boiler, PTAC, etc.) and on the type of heat pump installed, the EUI of the building will be reduced 5-30%. Replacing rooftop units and furnaces with heat pumps will result in the greatest EUI reduction (24-30%). Heat pumps can also replace water heaters. For example, replacing a gas water heater with a heat pump water heater can reduce EUI by up to 15%. Heat pumps are often similar in cost to comparable gas systems, with the added benefits of reduced EUI, lower gas bills, and improved indoor air quality. 

 

How does CASR plan to update the policy to account for changes in technology over time?

CASR is committed to performing a review of the technology landscape every four years. This will allow us to determine whether any adjustments are required to account for changes in technology within this ordinance. CASR may also make adjustments to the policy based on implementation and stakeholder feedback.

 

How can building owners get started?  

  • Go to the Energize Denver Hub  
  • Check available rebates from Xcel Energy

 

Incentives and Financing

The City is creating incentives for multifamily and commercial buildings for furnaces, roof top units, and individual water heaters starting in 2023. More to come soon.

The City is working on pilot projects. To inform incentive design, the City is searching for multifamily and commercial buildings needing to replace hot water and space heating equipment in the next few years. If you know your system is nearing its end of useful life, please fill out this form

Background Information

The Energize Denver Ordinance was passed by the Denver City Council on November 22nd, 2021 and is based on recommendations from the Energize Denver Task Force.

Energize Denver Task Force Recommendations

Energize Denver Ordinance(PDF, 985KB)

The Energize Denver Ordinance began with the formation of the Energize Denver Task Force. The City charged this diverse group with designing building policies for Denver that improves health and equity, creates jobs, and brings existing buildings to net zero energy by 2040. The group reached full consensus on their recommendations to the City. The task force included representatives of offices, apartments, condos, warehouses, hotels, Xcel Energy, energy producers, affordable housing, tenant and non-profit experts, labor unions, and environment and clean energy experts. They started their process by setting guiding principles for the outcomes of their work including that it be equitable, implementable, effective, flexible, and achieve eager compliance. They met 8 times over 8 months. They built on best practices and lessons learned from other cities. They engaged with their own communities to get input on their work, and collected broader input from the community. 

Using the recommendations given by the task force, the Energize Denver Ordinance was created as a bold yet practical way to move Denver and its built environment forward in its climate goals.