Everyone knows wasted energy wastes money.
That’s precisely why you wouldn’t buy a new car without knowing its “miles per gallon” rating. So why buy a home without a “home energy rating?”
The benefits of an energy efficient home start with lower energy bills and also allow you to enjoy safer, more comfortable and durable shelter, reduce your impact on the environment and increase your home’s sale appeal when the time comes.
Consider this. According to the California Energy Commission which started a statewide campaign to encourage all buyers and sellers of residential properties to get home energy ratings several years ago, a $100 per month reduction in your utility bills frees up enough cash to pay for a $17,000 increase in your mortgage (that’s assuming 6 percent interest over 30 years).
In addition, a study of energy efficient homes in The Appraisal Journal showed that a $1 reduction in annual energy bills resulted in more than a $10 increase in resale value.
Those are some compelling numbers for both buyers and sellers.
Efficiency adds value and energy ratings are a reliable way to estimate and compare energy efficiency.
Different from energy consumption, which is the history of how much energy the occupants of a home actually used over a period and can be tracked using utility bills, energy efficiency depends on the physical features of a home and all the equipment it contains. Consumption is reduced through efficiency, but also depends on the habits of the occupants. Wasteful habits, unusual weather or malfunctioning equipment can all drive up energy bills – even in the most efficient homes.
Currently, you’ll find home energy ratings are primarily being done on new construction. Over time, as more buyers become aware of the benefits of an energy-efficient home, a favorable energy rating will most definitely make these homes more attractive, giving new construction a distinct advantage over existing homes.
A comprehensive evaluation of the efficiency of the entire home – from air leaks (sealed or unsealed) to the heating and cooling system, water heating system, ducts and pipes, insulation (attic, walls and floor), windows, attached lighting fixtures and major appliances – a home energy rating is a detailed report that includes a numeric score or “rating” of the home plus recommendations for improvements that will reduce energy bills and make the home more comfortable. That’s how knowing the energy rating of a home is similar to knowing the miles per gallon rating of a car.
Developed by the Residential Energy Services Network and introduced in 2006, the Home Energy Rating System (HERS) Index is the industry standard for measuring a home's energy efficiency. U.S. agencies such as the Department of Energy (DOE), Department of Housing and Urban Development (HUD) and the Environmental Protection Agency (EPA) all recognize the HERS Index as an official verification of energy performance.
To determine a HERS Index Score, a certified RESNET home energy rater will do a home energy rating and compare the data against a reference home – a design modeled home of the same size and shape as the actual home, so the HERS Index Score is always relative to the size, shape and type of home being rated.
According to the DOE, a typical resale home scores 130 on the HERS Index while a standard new home is rated at 100. A home with a HERS Index Score of 70 is 30% more energy efficient than a standard new home. A home with a HERS Index Score of 130 is 30% less energy efficient than a standard new home.
Lower scores mean a home is more energy efficient.
For current homeowners, the value of learning your home’s energy rating is that it gives you the ability to choose smart energy upgrades and investments. You can enjoy the financial benefits of these improvements over time and also reap the rewards when it comes time to sell.