GREEN HOUSING MARKET: The number of Energy Star-rated homes is on the rise, but most U.S. homes are still energy-inefficient.
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EAST LANSING, Mich. - Krista and Micah Fuerst were looking near here to buy their first place together, and had narrowed it down to two houses: One built 25 years ago of standard materials, the other brand new and built to strict energy efficiency standards.
The couple's choice was easy: They picked the Energy Star home, the U.S. Environmental Program's top energy ranking.
But they're in the minority.
About 17 percent of new homes built in 2008 earned the Energy Star label. The proportion - which is expected to reach 20 percent when 2009's figures are tallied - marks a five-point increase from 2007 and "indicates such incredible success," said Sam Rashkin, national director of the program's section for homes.
Home energy use accounts for 16 percent of the United States' greenhouse gas emissions.
Despite the EPA's gains, some 99 percent of American houses are "sick" - damp, drafty, dusty, noisy and expensive to heat and cool - and "could be made at least 30 percent more energy-efficient with highly cost-effective, tried-and-true energy-efficiency improvements," according to Rashkin.
The Energy Star program won't solve this. Energy Star is meant to reflect the cream of the housing stock, and thus, program officers say, will always represent a minority of American homes.
Experts say economics and regulations are the root of the problem: Mortgages are structured in ways that fail to recognize efficiency's benefits, while a patchwork of inconsistent and ill-enforced energy codes provides conflicting signals to industry.
Meanwhile consumers remain largely unaware of efficiency's advantages, advocates say, thereby bypassing an easy target for considerable cuts in national carbon emissions.
In this sense the Fuersts are typical of many homebuyers. Both in their late twenties, the Fuersts were aware of Energy Star-rated appliances, but didn't know the label also applied to homes, said Krista Fuerst, a childcare director. Their house's environmental bona fides were icing on the cake, she said, but they mostly just wanted a place big enough to raise the family they're planning.
"We're certainly conscious of the environment," she explained, "but we're not hyper-conscious. We're not extreme green."
Their home, which wouldn't stand out in any new subdivision, is a bit farther from conveniences and their jobs - Micah Fuerst is an insurance actuary - than some others they considered. But they decided that was a reasonable tradeoff for smaller energy bills and freedom from costly renovations.
Retrofitting older houses can drastically cut their energy use, but it's also a lost opportunity. Once a home is built, experts agree, it gets much more difficult and costly to improve energy efficiency.
That's where Energy Star comes in. Run jointly by the EPA and the U.S. Department of Energy, the program uses third-party inspectors to ensure that qualifying homes are 20 to 30 percent more efficient than typical houses. It has made considerable strides since its 1995 inception. The number of certified homes recently reached one million, which the EPA says indicates a savings of $1.2 billion in energy bills and 22 billion pounds of greenhouse gases kept out of the atmosphere.
Of course, the ultra-efficient heating and cooling systems, high-performance windows and other features that make the homes exceptionally comfortable also make them a bit pricier. The added cost for a new Energy Star home may only be about the price of a night at the movies on each month's mortgage payment, but it's enough to scare off many potential buyers.
"It's an incredibly smart choice," Rashkin said, since smaller utility bills more than offset the higher price. "But consumers are overwhelmed by first cost."
To get buyers over that hump, a handful of specialized mortgage options have for decades given buyers more cash up front, since they'll save on energy costs. But nobody's buying.
Before the mortgage crisis, when loans were easier to come by and energy was relatively cheap, energy-efficient mortgages weren't very enticing, experts say, and lenders didn't bother with them. Now the specialized options are more valuable, but lenders have grown accustomed to ignoring them.
"It's really unfortunate," said Jennifer Amann, buildings program director for the American Council for an Energy-Efficient Economy. "Energy-efficient mortgages have been available now for 20 years or so, but they're a really underutilized tool."
Sam Rashkin agrees.
"We need a massive education of how to use energy-efficient mortgages, now that they can offer a meaningful solution," he said.
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10 Comments
Add CommentSounds like more urban sprawl
Reply | Report Abuse | Link to thisIf this is implimented the actual effect will be that fewer people will be able to buy a home because the cheaper less efficient homes will cost more to mortgage. by the way the energy efficient homes already cost 10% to 30% more.
Reply | Report Abuse | Link to thisYeah but the whole point of the article is that if you pay $100 instead of of $200 p/m to heat/cool your home then you can afford to pay $50 p/m extra on your mortgage! I don't know if the numbers do actually work out that way but that was the message I got...
Reply | Report Abuse | Link to thisWe built an energy efficient house 30 years ago and spent a lot, between 5 - 10% extra, because we were experimenting with passive solar and earth sheltering. It worked and has used between 1/3rd and 1/4th the heating and cooling of a standard house the same size, also built with standard materials.
Reply | Report Abuse | Link to thisWith consistent and rational building codes there would be incentive to absorb the extra costs by better architectural integration of form and function and better building materials and practices. Imagine if the 40 million houses built since 1980 had cut 1/3 of their heating and cooling fuel use for 5% extra initial costs. Wow.
I live in a farm house in southern Manitoba, whose first part was built in 1898, it was added onto in the20's and again by me in 1985. The oldest part was gutted , insulated ans sealed in 1985 as well. We have renovated gradually over the years, to the attic, basement and walls. We had an energy evaluation done on our house and it has an energuide rating of 77 . This puts it into the same category as a new highly energy efficient house. When winter temperatures can go down to -40 degrees C, you quickly learn all you can about insulation and triple pane windows etc.
Reply | Report Abuse | Link to thisHigh efficiency homes are better for the poor because they cause less to live in. Even the middle class are being hurt by high energy costs, specifically related to heating and cooling their homes. If all homes were required to be more efficient, it would free up money for consumers and overall improve the economy. The benefits are many.
Reply | Report Abuse | Link to thisHowever, the problem is, EnergyStar is celebrating their millionth home in fifteen years. With over 100 million households in the U.S., we cannot depend upon the slow
replacement to increase our overall efficiency.
The real solution is to make it easier for owners of existing homes to make their homes much more energy efficient. I've been involved in a non-profit program promoting scale retrofits. We are creating standardized energy efficiency retrofit plans for large developments of similar homes. In pilot homes, we've seen 50% reductions in energy use in these 1950's vintage homes. This is a great way to effect large scale change.
If they are living further from work and amenities, how does this affect their overall energy consumption. A few miles a day of extra driving will balance out any energy saving on the heating.
Reply | Report Abuse | Link to thisThe total sunk costs of the new house plus commuting have to be accounted for. If it is a new subdivision the sunk energy costs of all the new infrastructure (roads/sewer/power lines) has to be compared to the amortized equivalent in an existing neighborhood.
Reply | Report Abuse | Link to thisRetrofits to an older house nearer to work may turn out to have a lower total energy costs due to reduced commuting and reduced materials consumed/discarded.
Many older houses are also smaller which reduces the cost of the retrofits and heating. Smaller houses mean less furniture etc as well.
Reply | Report Abuse | Link to thisMost people who buy homes are fools. They pay $200k for a $50k home that is a piece of junk. I know as I've built many.
If one was to study some, buy your own lot, contract your home and make it not only energy eff but make it's own power from the sun, wind by building on a good RE site, they would get a far better value for 50% of the price.
I bought my humble home for $25k and refitted it for under $2k and now costs just $45 in winter and summer to heat, cool and $25 in spring, fall. I paid it off in 5 yrs and been living almost free for 12 yrs now. Biggest problem is many buy far too much home, saddling themselves with debt. Get smart people!
What is much more important is to find great retrofitting ideas for existing homes. Affordability and quick payback are vital to motivate homeowners. Do it yourself techniques would be best.Coating dark roofs, in warm climates, with white insulative paint, window coatings, heat trapping siding, heat sinks etc. Public education campaigns would help greatly.
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