Time to support Energy Performance Score
Every car has one. Every appliance has one. Why don’t houses have one? I’m talking about an energy rating. For decades, the biggest energy consuming products have been required to meet energy standards and to display some form of energy use in plain sight.
Consumers need the skinny to make informed choices. Ignorance is the enemy of a free market.
I wrote about one such rating system several weeks ago, called Energy Performance Score (EPS). Energy nerds across the nation are buzzing with the possibilities. Professional conferences, such as RESNET, have dedicated a large portion of their agendas to the topic. The State of Oregon recently passed legislation (SB 79) that established a working group to figure out how to implement the idea. The City of Seattle is running a pilot program that will assign EPSs to about 5,000 homes. Cities and states across the nation are jumping on the bandwagon.
The idea recently made it through the first round of a competition on Change.org and has now moved to the final phase. The winning idea gets an audience with the White House. This kind of exposure is just what the concept needs to make a real difference. If you would like to see energy ratings for houses, please vote for We Must Change Energy Behavior – An MPG Rating for Your Home.
Building hypocrisy in the Malibu hills
Less is more for green building. It must be defined only in terms of using less energy, less water, less material and causing less harm to the ecological processes that support life. I’m appalled that yet another mega-rich celebrity is using “green” to wash away the grime of over consumption.
David Evans, also called The Edge and guitarist for U2 hopes to develop 156 acres overlooking the Pacific coast near Malibu, California. I respect the work that celebrities do for good causes, and I suppose that Mr. Evans has done his share of good deeds. Let’s take nothing away from other accomplishments. Instead, let’s focus on how this particular project reeks of excess.
Mr. Evans’ plans to build five homes on a bluff overlooking the ocean using “every imaginable green building technique”, according a New York Times story. The homes would range in size from 7,000 to 12,000 square feet. Whoa!
I can’t disparage his motives. Let’s assume that Mr Evans’ simply needs some help understanding that “green” isn’t about shiny stuff. Mr. Evans can demonstrate his sincerity by focusing his attention on the outcome not the technology. All five of his houses should meet a few simple goals: net zero energy, net zero water, completely healthy, beneficial to local habitat and certified by an independent third party. I could add more requirements, but I think those five elements should keep him busy enough.
Let’s assume that Mr. Evans is able to meet all four goals and get the house certified. That leaves only a fundamental hypocrisy. He claims he wants to “inspire” others to create a “benchmark of sustainability.” I get it. A world of eager green acolytes will gaze on this accomplishment and dedicate themselves to building their own multi-million dollar monuments to conspicuous consumption. Let’s see, the land alone cost $9 million, which is more than I would make in… 12 LIFETIMES. And they haven’t even started pushing dirt.
To assert that anyone, but rock stars, investment bankers and mega-millionaires will be able to follow this example is absurd and insulting. It’s bad enough to salve one’s own conscience with green consumption, but it’s contemptuous to say it somehow serves society. I’m sick of rich people claiming that the only reason they build monstrous green houses is to show the rest of us how to do it. If these folks really want to be examples for the huddled masses (who made them rich to begin with), then they should use their money and all their talent to create a truly sustainable home with no more than 500 square feet for each permanent resident. If they need help, I’m happy to offer my thoughts on how to accomplish green development with true elegance.
No matter how many shiny gadgets Mr Evans puts in these small houses, there will be lots of money left over. With that, they could build thousands of truly green houses in Haiti or Africa or New Orleans. David Evans is only the current poster child for this behavior. It happens in every town and to varying degrees. Generally speaking, this kind of greenwashing is unintentional. These folks just don’t get it. Even if Marie Antoinette didn’t really say it, the sentiment applies: “If they don’t have bread, let them eat cake!”
Energy Performance Score: The time has come.
Buying homes is a very emotional process. It’s no wonder that so many people buy energy pigs with lipstick. They look nice, but swill energy. Few people think about how much electricity or natural gas they will have to buy to stay comfortable after purchasing the pig.
Most folks shopping for homes labor under the misconception that new homes use less energy than old homes. There is a certain logic here. New homes tend to have more insulation, better windows and more efficient heating systems. Why, then, do older homes often use less? Take the state of Oregon, for example. I recently learned that the average home in our state uses about 78 million Btus (mmBtu). Based on energy models, we expect a “typical” new home to use about 98 mmBtu. I’m talking about total energy consumption for space heating, water heating, lights, appliances, everything.
After the shock wore off, I started to think of reasons. First, existing homes tend to be much smaller. In Oregon, the housing stock includes homes that are up to 100 years old and most of them are small – between 1,400 and 2,000 square feet. By contrast, the average size of new homes is 2,400 square feet and some are much larger. Size matters.
This brings up and interesting distinction between “efficiency” and “consumption.” Large houses might be called efficient, if they use a less energy per square foot of conditioned floor area than a smaller house. However, the smaller house would consume less energy. Which is more important? Consumption is more important – without a doubt.
Here’s another example. When we built our current house in 2004, we bought a new refrigerator. Comparing the actual energy consumption of several models, I noticed that a 22 cubic foot ENERGY STAR model was expected to use more electricity than an 18 cubic foot refrigerator without the ENERGY STAR label. The larger, more efficient, model would use more energy than the smaller, less efficient, one
There’s been some debate among energy nerds about a term known as Energy Utilization Index (EUI). This term expresses building efficiency as energy per square foot of conditioned space. Some nerds also argue that climate must be factored in, so that those unfortunate enough to live in cold areas are not burdened with guilt for using more energy. Climate matters, too.
As we move into the age of carbon footprints, we need to focus on consumption. It’s the bottom line. Consumption is what you pay for. Consumption generates greenhouse gases and toxic pollution. Consumption must be the yardstick that we use to set energy targets and measure our progress toward those targets.
Which brings us back to helping homebuyers choose houses. Technically speaking, it’s not high efficiency we want to sell, it’s low energy consumption. There are a number of proposals floating around for labeling systems that rate a home’s energy performance and then slap that rating on a label in order to communicate the information to home shoppers.
The system I prefer is called Energy Performance Score, because it shows consumption directly. Using the example of Oregon homes, the average home that consumed 78 mmbtu would have an EPS of 78, while the new home that consumed 98 mmbtu would have an EPS of 98. Simple, huh? The EPS value is the building’s total energy consumption in Btus without all those pesky zeros. Like a golf score, lower is better. When you get to zero, you have a zero energy building.
The EPS score sheet shows the energy consumption, greenhouse gas impact and estimates energy costs.
EPS wasn’t the first energy rating for homes. The Home Energy Rating System (HERS) created and administered by RESNET goes back to the late 1970s. The HERS rating is the standard energy rating approach for residential buildings. It is recognized by government agencies and lenders as the basis for energy efficient mortgages.
While HERS has been available for decades, it has two flaws. It ignores both climate and building size. A 4000 square foot house in Maine could have the same rating as a 2000 square foot house in Arkansas even though the actual energy consumption was starkly different.
In addition to the energy consumption score, the EPS process generates a carbon score based on the amount of electricity and natural gas used and the carbon released in order to bring that energy to the home.
I should emphasize that EPS and HERS are projections using computer models, not measurements of actual consumption. The number of people in a house and their behavior will have a big impact on the monthly consumption. This is impossible to model accurately with a computer. What they do model is the structure and equipment of the building that enable occupants to achieve low energy use. Without good energy bones, occupants are unlikely to achieve the desired results.
So, my preference is the EPS system. (And, it has nothing to do with my day job at Earth Advantage.) A metric based on consumption is simple and direct. It gives builders, real estate brokers, lenders a clear way to communicate the actual energy consumption of homes. It gives homeowners an idea of where they stand and motivates them to improve. It allows society to set measurable goals for performance. It drives the housing market to build better houses.
If you agree that we need a clear metric to express the energy consumption of homes, you can give the idea a big boost by voting on Change.org. Ideas with the most votes may get the ear of the White House. The page titled We Must Change Energy Behavior – An MPG Rating for Your Home explains the EPS procedure and gives more great reasons why we should move forward with this idea – whether or not it gets an audience with the Obama Administration.
The EPS value should be published in real estate advertisements, included in multiple listing services and printed on standard appraisal forms. Every home placed on the market should have an EPS number just as every car on the lot carries an EPA mileage sticker.
Lenders block housing recovery
There is plenty of blame to go around for the housing bubble and its collapse. Few of us complained as we watched skyrocketing values, even as we acknowledged that it couldn’t last. Certain lenders deserve special attention for lax standards that poured gasoline on the fires of speculation. Sure, they were just playing the same game as thousands of others who packaged mortgages and sold them off to secondary markets. By reducing their own risk to near zero and raking in big fees for these loans, certain originators earned a special place in hell. Unfortunately, they have pulled the entire housing industry into the fire with them.
Lenders who keep mortgages, mostly community banks and credit unions, should be applauded for resisting the siren song of short-term gain. There are many stories of these smaller, local lenders that need to be told.
The big question now is: what’s next? The same short-sighted, profit-hungry companies that pulled the industry down seem content to hold it down. Builders I know tell a similar tale. Lenders consistently decline mortgages even for homebuyers with good credit, stable jobs and cash for down payments. This behavior strangles the emerging economic recovery. It may protect lenders’ balance sheets, but it’s no path to profits.
My inner pessimist explains this 180-degree change in lending behavior as callous self preservation. One builder pointed out that many lenders have now become owners of distressed property. Self-interest prevents them from funding competition that may slow down sale of their own inventory. While listings of bank-owned property may be slowly dropping, there is clearly much more where that came from. Lenders appear to be slipping their own properties into the market slowly. In some places, it may take another year or more for banks to unload. In the meantime, they can choke off competition by refusing even high-quality loans.
My inner optimist sees hope. To the extent that the housing bubble was built on speculative greed and, in some cases, outright fraud, we can now regain stability by rewarding strong loans. Strong fundamentals don’t seem to be good enough. We need a new factor that is quantifiable, stable and new. I’ll call it the Green Factor.
Certified green construction increases property value at the same time it strengthens and stabilizes home buyers’ fundamentals. The Green Building Value Initiative used data from multiple listings services in Seattle, Wash. and Portland, Ore. to show that certified green homes sold for three to eight percent more than the typical home. That same study calculated the time-on-market at 18 days less. More value and faster sales would be a good prescription for a housing recovery.
Energy efficiency is built into third party certification programs, such as ENERGY STAR, Earth Advantage and LEED for Homes. To the extent that home buyers invest more in the homes, they pay higher mortgages. Higher monthly payments are more than offset by monthly energy savings. Buyers make money the old fashioned way. The cost of their investment is lower than the return. The benefits begin the moment buyers walk in the door and get better every year as energy prices inevitably rise. Instead of finding themselves underwater with more house that they can afford, green buyers make a sensible investment that gets more sensible over time. You would think that this winning combination would be just what the doctor ordered for the lending hangover.
The main obstacle on this path is stingy lenders who now compound their earlier sins of excess with the new sin of self-interested frugality. Lenders rode the housing bubble to great riches. They should do the right thing and help the housing industry climb out of this hole.
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