Slipstream’s analysis of Minnesota’s proposed residential energy code update finds that energy codes are not a primary driver of housing affordability challenges. The report estimates a modest construction cost increase paired with significant long-term energy savings for homeowners.

Key Findings

  • Meeting the updated Minnesota Residential Energy Code via the most cost-effective compliance pathway increases construction costs by about $7,720 for the modeled home.
  • Homes built to the updated Minnesota Residential Energy Code are projected to use about 20–21% less energy than homes built to Minnesota’s current Residential Energy Code.
  • Most of the overall cost increase comes from just one building component: exterior wall insulation improvements.
  • Other code changes represent relatively small costs:
    • Window performance improvement: about $432
    • Energy recovery ventilator (ERV): about $1,158
  • Foundation and slab insulation changes are cost-neutral between the current energy code and future projected energy code.
  • All builders interviewed reported they are already installing ERVs, meaning many homes may not see additional costs for this requirement.
  • Builders identified tariffs, lumber prices, and general market volatility as more significant drivers of housing construction costs than energy code updates.
  • Over the life of the home, lower utility bills improve long-term housing affordability and protect homeowners from rising energy costs.
MN Residential Cost Study Analysis for 2024 IECC Adoption.pdf