NC Builder Incentive Program Gets Green Light

Big news for energy efficiency advocates! As many builders may have heard, Progress Energy’s builder incentive program based on a combination of the HERO Code and the HERS Index was approved last week by the NC Utility Commission. This is a great opportunity for our builder clients as they will be getting paid for building energy efficient homes. Dollar figures are easy to understand, but what may be more difficult to wrap your head around is what exactly the HERO Code and/or the HERS Index are — so let’s start with some brief descriptions.


Every house getting a HERO Code requires a blower door test.

To keep things simple, we will describe the HERO Code as it was originally proposed by the North Carolina Department of Insurance. Just like the regular NC Energy Efficiency Code, the HERO Code has two paths to compliance, with one being the Prescriptive Path and the other being the Performance Path.

  • The Prescriptive Path is straightforward but inflexible: it involves complying fully with a list of specific requirements for things like insulation, high-efficiency lighting, window U-factors, whole house tightness and duct leakage testing, among other things.
  • The Performance Path, on the other hand, is more flexible. It requires an energy cost analysis (provided to you by your HERS Rater and signed-off by a Design Professional) as proof that the home you are building will have energy costs that are less than or equal to that same home built to the HERO Code’s prescriptive requirements. The Performance Path does NOT allow for HVAC or water heating tradeoffs to be HERO Code compliant. In other words, higher efficiency equipment will not help you, because the HERO Code is focused almost solely on improvements in the thermal enclosure.

HERS Index

The HERS Index is the same scale many of us have been using for years to meet ENERGY STAR compliance, with the old standard being an 85 or less and the new ENERGY STAR standard typically falling somewhere in the mid 70s. Solar hot water and geothermal systems, while they cannot be used to make a home HERO Code compliant, can both be used to decrease the HERS Index to reach a higher incentive level. Solar PV, however, cannot be used to decrease the HERS Index to reach a higher incentive level.

HERO Code/HERS Index Progress Energy Incentive

Now that we know what both the HERO Code and HERS Index are, we can talk about the new incentive package. The incentives rise as HERS scores fall. The baseline incentive is $1,000 for each home built to the HERO Code. That jumps to a rebate of $1,750 for HERO plus a HERS score of 70, increases to $2,500 for HERO plus HERS 65 and caps off with $4,000 for homes built to HERO Code with a HERS of 55!

An additional option for builders will give homeowners a three-year guarantee on the heating and cooling bills of homes registered with the program.

Please keep in mind that the program is still in its implementation stages and there are required trainings for participants of the program still to come. While technically any home that has received a Certificate of Occupancy after October 1, 2012 is eligible for the rebates, applications to the program will not be accepted until January 1, 2013. That being said, we have some time to get all of our builders up to speed and we will be working closely with Progress Energy on all of the details involved with the program.

Because Southern Energy Management’s ecoHOME Certification already includes a HERS Index score as its base, we anticipate that a lot of builders will see ecoHOME as a great way to begin meeting the requirements of this builder incentive program. Please contact us at or at (919) 836-0330 to schedule your HERO Code evaluation appointment!

Michael Peaden is the Building Performance Operations Director at Southern Energy Management. Read more about him here.

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7 Responses to “NC Builder Incentive Program Gets Green Light”

  1. Lyman lafreniereNo Gravatar says:

    Building a 4700 sq ft sips home on farmer lake in caswell county ,about to make a decision on hvac and would like some input ,the structure is of course very tight ,but any help with other decisions would be helpful .
    Thanks lyman

  2. Lyman lafreniereNo Gravatar says:

    See above comment,but I am building a sips house and would like some info on the best hvac for this home
    Thanks lyman

  3. adminNo Gravatar says:


    Thanks for touching base! We’ll be happy to see what we can do to help. Please send an email to, and we can take it from there.

  4. DavidNo Gravatar says:

    Any word on if this program will be available for Duke Energy customers now that they’ve merged? I know some builders in Durham that would love to take part in this!

  5. Laura LaufferNo Gravatar says:

    This is a great incentive. As I understand it the PE incentive for Energy Star homes (5% off of your electric bill for life) was going away. This is a fantastic way to promote efficiency outside of Energy Star.

    I hope Duke Energy follows Progress Energy’s lead on this.

  6. Michael PeadenNo Gravatar says:

    David, we don’t have any information about Duke Energy’s plans yet, but since this program has passed the Utility Commission, it makes it easier for other utilities to pick it up.

    Laura, I believe that Progress Energy is still issuing the 5% discount to ENERGY STAR Homes only, and I agree with you that this is a fantastic way to promote efficiency outside of ENERGY STAR!

  7. Jonathan KelmanNo Gravatar says:

    It’s likely that the new program will eventually be available to Duke customers, but probably not immediately. Progress has repeatedly stressed that it will take some time to integrate the companies fully (on the order of a decade), so many aspects of the two companies will continue to be run separately in the meantime.

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