Affordable Housing Efficiency Grant Program.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 1020

Short Title: Affordable Housing Efficiency Grant Program. (Public)
Sponsors: Senators Salvador and Theodros (Primary Sponsors).
Referred to: Rules and Operations of the Senate
May 4, 2026
*S1020-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO ESTABLISH THE AFFORDABLE HOUSI NG EFFICIENCY GRANT 2
PROGRAM TO PROVIDE F LEXIBLE INCENTIVE FU NDING FOR ENERGY 3
EFFICIENCY AND ELECT RIC BUILDING UPGRADE S IN AFFORDABLE 4
MULTIFAMILY HOUSING. 5
The General Assembly of North Carolina enacts: 6
SECTION 1. Article 7 of Chapter 143B of the General Statutes is amended by adding 7
a new Part to read: 8
"Part 37. Affordable Housing Efficiency Grant Program. 9
"§ 143B-344.65. Definitions. 10
The following definitions apply to this Part: 11
(1) Affordable multifamily housing. – Multifamily residential buildings of five or 12
more dwelling units where at least fifty percent (50%) of the units are reserved 13
for or occupied by households with incomes at or below eighty percent (80%) 14
of the area median income, adj usted for househo ld size, or as otherwise 15
defined by the Department. 16
(2) Area median income. – The annual median household income of an area as 17
determined by the U.S. Department of Housing and Urban Development. 18
(3) Department. – The Department of Environmental Quality. 19
(4) Electric building upgrades. – Improvements that replace fossil fuel systems 20
with high-efficiency electric alternati ves, including, but not limited to, heat 21
pumps, electric water heaters, induction stoves, and electric vehicle cha rging 22
infrastructure. 23
(5) Energy efficiency upgrades. – Measures that reduce energy consumption, 24
including, insulation, efficient windows, lighting, appliances, and heating, 25
ventilation, or air conditioning systems. 26
(6) Office. – The State Energy Office. 27
"§ 143B-344.66. Establishment of program. 28
(a) The Affordable Housing Efficiency Grant Program is established within the Office of 29
the Department to provide flexible incentive grants to affordable multifamily housing for energy 30
efficiency upgrades and electric building upgrades. The program shall prioritize projects that 31
reduce energy costs for low -income residents, improve building performance, enhance indoor 32
environmental quality, and support clean energy goals. The Department shall adopt rules to 33
implement this Part, including criteria for grant applications, eligibility, prioritization, allowable 34
uses of funds, incentive structures, and reporting requirements. 35
(b) Grants may be used for any of the following: 36
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 1020-First Edition
(1) Energy efficiency upgrades. 1
(2) Electric building upgrades. 2
(3) Related health and safety improvements necessary to facilitate the upgrades, 3
including ventilation enhancements or structural repairs. 4
(4) Project planning, design, and implementation costs, including energy audits 5
and technical assistance. 6
(c) The Office shall perform all duties required to facilitate the program , including 7
developing application processes, awarding grants, and monitoring compliance and outcomes. 8
The Office may partner with local government units, uti lities, or nonprofits to accomplish the 9
objectives of the program. 10
(d) Eligibility. – Grants shall only be awarded to affordable multifa mily housing 11
buildings that meet all of the following requirements: 12
(1) Have been in service for at least 15 years as affordable multifamily housing 13
buildings. 14
(2) Are located in potentially underserved communities, as identified by criteria 15
to be established by the Department. 16
(e) Incentive Amounts. – Grants shall provide incentives for early adoption that shall not 17
exceed seventy-five cents ($0.75) per square foot of eligible space . Incentive amounts will be 18
based on project scope, demonstrated energy savings, and compliance with program tiers or 19
performance standards established by the Department. 20
(f) Compliance. – Grant recipients must ensure upgrades comply with applicable 21
building codes and energy standards. Applicants must also comply with federal requirements if 22
they are using federal funds in addition to State funds. Recipients shall maintain affo rdability 23
commitments for a period specified by the Department. 24
"§ 143B-344.67. Reporting and evaluation. 25
(a) Grant recipients shall report annually to the Office on project outcomes, including 26
energy savings, cost reductions for residents, greenhouse gas emissions reductions, and health or 27
environmental benefits. 28
(b) The Office shall submit an annual report to the Joint Legislative Commission on 29
Energy Policy on program performance , funds allocated, projects completed, and 30
recommendations for improvements." 31
SECTION 2. There is appropriated from the General Fund to the Department of 32
Environmental Quality the sum of five million dollars ($5,000,000) in recurring funds beginning 33
in the 2026 -2027 fiscal year to be used for staffing and operating funds for the Affordable 34
Housing Efficiency Grant Program, as enacted by this act. Up to six percent (6%) of the funds 35
may be used by the Department for administrative costs. 36
SECTION 3. This act becomes effective on July 1, 2026. 37