Using the carrot: encouraging the construction market to do façades better

9 Dec 2025

A blog on usglass.com by Helen Sanders

The commonly held view of market transformation is that the first step is to pull the market to higher performance using incentive programs encouraging the use of above-code, voluntary, performance standards. What dynamics are at play? And what are the key drivers of transformation when applied to façades?

The idea is that once the market becomes used to implementing higher performance, the cost of implementing this performance is reduced because:

The added cost due to newness risk is eliminated, as a critical mass of participants in the design and construction process becomes familiar with the new solutions and installation processes.
More high-performance solutions become available, and more practitioners are used to implementing them, so competition increases.
Manufacturers can achieve greater economies of scale as adoption grows at the top end of the market.

Once achieving above-code performance is determined to be cost-effective based on energy savings alone, typically these performance requirements are implemented into the U.S. model energy codes. The once above-code performance then becomes the minimum legally allowed performance.

This market dynamic is illustrated in the residential provisions of the International Energy Conservation Code (IECC-R), where legacy Energy Star^® performance requirements for fenestration were implemented once sufficient market penetration was established, and after a new, more stringent version of Energy Star was launched.

Barriers that Incentives Must Address

The 2024 study by the Façade Tectonics Institute (FTI), which researched the barriers to adoption of high-performance façades in nonresidential and multifamily buildings, benchmarked and identified concepts for façade-focused incentive programs. To be effective, it identified that incentives must address barriers impacting all participant groups in the design-construction-fabrication-material supplier value chain. Specifically, they must:

Reduce upfront costs of constructing high-performance façades.
Increase return on investment to meet developer/owner targets.
Reduce perceived/actual risk for participants across the entire value chain, including general contractors, subcontractors and architects, not just owners.
Encourage more effective project delivery methods that reduce the focus on the lowest bid and encourage upfront cross-discipline collaboration in design and construction.
Bring façade experts to the design table early to ensure creative, holistic, cost-effective integrated building system solutions are identified.
Provide sufficient time and resources to focus on façade design.

Incentive Concepts

FTI’s research identified nine different categories of incentive options (see figure three). If used together, these could drive façade market transformation. Many of the concepts are already in use in jurisdictions such as British Columbia, New York State and Massachusetts, where installed façade performance change is happening fastest. New York’s Buildings of Excellence competition and New Construction and Renovation Program and Incentives plus Massachusetts MASS SAVE program are examples of integrated incentive programs. These coordinate multiple incentives that serve to address challenges across the entire value chain. While focused on whole building performance, they could be modified for a façade-focused program.

Subsidized training

Making training free or low cost for glazing subcontractors, facade commissioning and façade assembly design increases market capacity and reduces the risk of doing something new or different across the value chain. The New York State Energy Research and Development Agency (NYSERDA), MASS SAVE in Massachusetts, and Pacific Gas & Electric and Tri-county renewable energy network in California offer free or subsidized training for a variety of professionals and tradespeople.

Targeted, low-cost insurance to manage risk

I have written previously about how insurance products could be developed to reduce the risk of implementing new or different façades or reduce the cost of ownership of the resulting buildings. Concepts include:

Reduced building insurance premiums for owners of buildings with high-performance and long-service life (low-maintenance, upgradable) façades.
Insurance for glazing subcontractors or general contractors for their project scope.
Insurance connected to the newest products to protect manufacturers and the downstream purchasers by providing more extensive product warranties based on robust product testing and evaluation. France’s “Avis Technique” offers a model for technology assessment, as did GSA’s recently halted Green Proving Ground
Coverage for potential project schedule interruptions when adopting new technology.
Financial incentives to manage risk

Incentives need to be focused on de-risking. Examples include funding full envelope commissioning, façade design charettes and technical support, and for qualified consultants to offer design services to owners who commit to implementing high-performance façades.

Incentives to improve owner return on investment

There are several concepts already being implemented in North America to incentivize owners to build better. These include transferable tax credits, such as the 179D federal tax deduction (now expiring mid-2026), property tax reductions, zoning incentives, utility rate reductions, low-interest loans and Property Assess Clean Energy (PACE) financing.

Creative funding mechanism: Carbon credits

The University of Washington’s Foster School of Business reportedly invested in a low-carbon mass timber building, selling $125,000 of carbon credits to fund it. A similar carbon credit concept could be used to fund low-carbon façade implementation.

Incentives for long-term ownership and tenant model

Eliminating capital gains for buildings held for more than 10 years incentivizes owners to hold their buildings. Utility rate reductions and other benefits accruing to tenants encourage long-term lease commitments. According to PAE Engineers, when combined with tenants willing to pay a 10% premium for a lower cost, higher-performing building, the required return on investment can be achieved.

Incentives for early involvement of glazing sub-contractor and façade engineers

Financial incentives for using collaborative delivery methods, such as integrated product delivery (IPD) or Public Private Partnerships (P3), rather than conventional design-bid-build, may support having façade experts at the table early. This indirectly supports better façade performance outcomes. My previous blog provides a deeper dive into this topic.

Reward manufacturers for being first to market

This could be through financial incentives for product development, R&D tax credits or insurance for first-mover products.

Encourage long-service life specifications

Above-Code Façade Program

To encourage façade performance improvement over HVAC improvement, it is critical to develop façade-specific incentive programs rather than relying on whole building performance programs. When the entire building performance is the focus, a target energy use intensity (EUI) can be achieved by degrading envelope performance in return for higher efficiency mechanical systems. To connect incentives specifically to façade performance, characteristics of high-performance facades or façade assemblies must be identified.

While building-level above-code programs do not provide a sufficient façade focus, they may have a subset of requirements or program structure that can be referenced or leveraged. Benchmark programs include Energy Star for commercial buildings, the U.S. Green Building Council’s (USGBC) LEED^® rating system or the International Well Building Institute’s WELL^™ Certification.

Concept development for such a program is the focus of a new U.S. Department of Energy-funded project being managed by FTI. Stakeholder meetings have begun, including in-person focus groups with façade design experts in New York in September and in conjunction with the National Fenestration Rating Council (NFRC) in October.

The Path Forward

A blueprint for incentives has been implemented for enhancing whole building performance that can be targeted to improve façade performance. To transform the market, an integrated incentive structure must be implemented. This will reduce risk and cost across the entire value chain from owners and developers to architects, contractors and material suppliers.

The basis of any incentive must be a clear understanding of how a good façade performs: What does good look like? An above-code façade program is therefore essential. It must set measurable performance targets across a range of diverse – and sometimes conflicting – performance outcomes, such as energy efficiency, thermal resilience, occupant comfort, access to daylight and views, service life and life-cycle carbon. In doing so, it will drive balanced, long-term and holistic design approaches which optimize the outcomes and guard against unintended consequences of a single-metric (e.g., energy only) focus.

If you are interested in contributing to the concept development of the above-code façade program, please reach out to me or my FTI collaborators, Stephen Selkowitz (LBNL affiliate) or Sophie Pennetier (Digne).