There is a great deal of confusing information about what it means to be an Energy Star Builder.  Using Energy Star appliances doesn’t make a builder an Energy Star builder.  

Energy Star is a government-sponsored (Environmental Protection Agency) program created to incentivize and educate the public, manufacturers and builders about the benefits and importance of energy conservation.  There are programs for a number of industries.  Appliance manufacturers can be part of the Energy Star program and build and test the appliances they manufacture to meet or exceed certain baseline standards set by Energy Star.  This is why you see the Energy Star logo on appliances at your local home store.  Those appliances bearing this logo exceed this baseline and a manufacturer’s participation helps to differentiate their appliances as more efficient.

Like appliance manufacturers there is a program for site built homebuilders.   There are a number of requirements to meet the standards, but in general to earn an Energy Star rating, a home must meet strict guidelines for energy efficiency set by the EPA and be verified by a qualified Energy Star Professional.  These homes are at least 15% more energy efficient than homes built to the 2004 International Residential Code (IRC), and many include additional energy-saving features that typically make them 20–30% more efficient than standard homes (ref www.energystar.gov).  If you’re spending an average of $300 per month now on energy for your residence and it is not an Energy Star home, then a comparable Energy Star home would likely save you over $1000 per year! 

This is real money not just some ploy to save on carbon emissions.  It does that as well, but the bottom line is that energy conservation saves you money.  At today’s low interest rates the extra dollars saved allow for more house.  An extra $100 per month buys about $15000 more home in total dollars.  As a home grows in size, so does it energy use and the impact that Energy Star can have on your home purchasing power.  Unfortunately, because many of the incentives offered by our state and federal governments are tailored for smaller homes, many of the larger homes do not qualify, or the incentives (since they are often capped) are not very material to the overall project cost.  Therefore, many large homebuilders have ignored Energy Star and other opportunities to improve the performance of their homes.   I’ve had several conversations with homebuilders and realtors alike who tell me that this is unimportant because homebuyers that can afford these larger homes can afford the energy bills that come with them.

In my view this is a very short-sided viewpoint.  Regardless of whether a homeowner can afford a bigger energy bill is irrelevant.  There are so many other benefits from comfort, temperature consistency, sound reduction, and even slower burn rates as the fuel a fire needs to burn (oxygen) has more difficulty channeling through a tight home.  What’s two more minutes worth to get upstairs and get your children?  The reality is that larger homes with all the complicated roof lines, vast vaults and significant second (or even third) story spaces often times use more energy per square foot of living space than a small single story home.  It’s easy to insulate a single story 1500 square foot home.  You almost have to work at messing it up.  Change to a 4000 square foot home with lots of doors and windows, vaults, sharp angles and complicated tight spots that are hard to get to and you have a recipe for multiple fractures in the insulation envelope.  Energy Star refers to this as the Thermal Envelope Break (or thermal break).  The same principle applies to the ice chest you take to the park.  If you poke even a small hole in such a cooler, how much faster will the ice melt?  It’s the same principal. 

As a result, it’s not uncommon to see brand new 4000 square foot homes with $600 monthly energy bills.  And, even though it takes allot more understanding and effort to make such a home Energy Star compliant, the benefits are far greater.  It is no uncommon to cut the energy usage by 50% or more on such a home when compared to the same size home built in the same neighborhood at the same time.  Now, you’re talking savings.  Saving $3600 in a year buys $50,000 more home at today’s low rates.  Even Warren Buffet isn’t going to waste $50,000 unnecessarily.   Why would you?

The sad thing is that to get these savings doesn’t cost $50,000.  Often times 20% efficiency can be gained with the same products already being used.  By adding an Energy Star design and inspection consultant to the building team, the builder and homebuyer get a number of benefits.   The most important of these benefits is the knowledge these experts bring regarding design of the insulation process and their inspections to ensure the installation is proper and complete.  Since many homes (especially those with two stories) have the insulation improperly installed, this inspection process can identify major areas of concern and get them rectified before the sheetrock hides the issues.   It’s just good to have another set of eyes to review the work, especially a set of expert eyes, as even the best builders can’t catch everything. 

By adding better insulation, more efficient lighting, better attic ventilation techniques and equipment, and using more efficient air conditioning equipment, the gains can be much greater than 20% and still be far less in net ownership costs to the buyer.  In the end Energy Star just makes sense.  If you are considering building or buying a new home and the home is not going to be built to these standards then you will pay for it with real money in the long run and you will lose all the other benefits that come with a better constructed home.