US loses opportunity with home energy efficiency
The Pearson Park Subdivision just outside of Springfield, Mo. will be the first subdivision composed entirely of Energy Star homes in the state. New homes will be 20 percent to more than 40 percent more energy efficient than standard, code-compliant homes, according to the developer. Photo by Meek's Design Center.
25 January 2010
EPA makes gains with Energy Star program, but US housing stock remains woefully 'sick.'
By Andrew McGlashen
for the Daily Climate
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.
Building Codes Assistance Project
"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.
While energy-efficient mortgages are a good idea, there's a more obvious solution, according to Cliff Majersik, executive director of the Institute for Market Transformation, which advocates for energy efficiency:
Make all mortgages – not just specialized ones – account for energy use.
"The fact is that energy-efficient homes have much lower foreclosure and delinquency rates. So that's a market failure, that we're not giving homeowners credit for buying good, efficient homes," Majersik said. "The challenge is that there are processes that have been in place for a long time, and there's pretty clear evidence that they've let us down."
The House climate bill includes a handful of provisions that would reward buyers of efficient homes. For example, the Federal Housing Administration would be required to insure at least 50,000 energy-efficient mortgages over three years, and Fannie Mae and Freddie Mac would make the kind of wholesale changes to underwriting guidelines sought by Rashkin, Majersik and others.
Advocates also say national efficiency efforts have been let down by the codes that set minimum requirements for efficiency.
"Energy codes have existed for a long time, but they haven't really done anything," said Aleisha Khan, executive director of the Building Codes Assistance Project, a coalition that helps state and local governments implement efficiency requirements.
Certification programs like Energy Star "pull the market" by spearheading efficiency efforts, "and then you've got codes, dragging up the bottom," she said. "Code is not Energy Star. Code is common sense."
Yet there is no nationwide building code. Instead, states base their own requirements on the International Energy Conservation Code, which is usually updated every three years.
Some states consistently follow the latest iteration of the IECC, but others adhere to years-old versions, and a few "have done virtually nothing at all," said Jean Boulin, program manager in the U.S. Energy Department's building energy codes program.
States are legally bound to review and consider adopting the IECC, but can opt out if they deem the standards inappropriate – in fact, several have no mandatory code. Officials in Alabama, for instance, have declined to follow the code, citing their status as a home rule state.
"There is no ability for any agency to penalize states if they don't follow the law," Khan said. And with so many homes being built to such various requirements, enforcement is tricky. "It's a mess," she said.
A measure in the climate bill would change that by establishing a nationwide code. The bill calls for a 30 percent increase in efficiency over the 2006 IECC upon enactment, a 50 percent jump by 2014 and a 75 percent increase by 2029.
Khan and Boulin said there are other signs that more effective codes and more efficient homes are on the way. For example, Khan said the 2009 IECC is 15 to 20 percent stricter than the previous version – the biggest change so far.
"I'm confident that we're moving forward quite well," Boulin said. "We're finding these are terribly cost-effective things to do, and people shouldn't avoid them."
But further progress depends on knowledgeable consumers, Boulin and a number of other experts said.
Homebuilders say they'll build more efficient homes when buyers ask for them, but demand won't grow until more people understand the benefits of efficiency.
"Consumers really, really need more information about efficient homes," Khan said. "They just aren't getting it."
Edward Vine, an energy efficiency expert at the Lawrence Berkeley Laboratory and the California Institute for Energy and the Environment, agrees.
"That's where I'd focus most of my energy," he said. "We have to change the mentality of some people who say, 'We have energy-efficient homes, so why aren't people knocking down the doors?' "
The Fuersts may not have given efficiency much thought before they bought their house, but the couple – along with their friends and family – has a newfound interest, and say they'll try to find another Energy Star home if they ever move.
"The house is heated very evenly," Krista Fuerst explained. "There are no cold spots and no drafts." They set the thermostat at 67 degrees – much lower than would have been comfortable in their rental – and turn it down to 57 when they leave in the morning, but the temperature never drops that low, even after 12-hour days. So far their heating bills have been just over half what they paid last winter.
"Now that we have lived in an energy-efficient house," she said, "it would be very difficult to go back."
Andrew McGlashen is a freelance journalist living in Michigan.
Photo credits: Matt Rosendaul of Great Lakes Home Performance conducts an energy audit in two homes in Michigan. Photos courtesy Great Lakes Home Performance.
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