written by Dr. Lee Ball
One of the barriers to the widespread adoption of high
performance building practices is the lack of quantifiable data that can be
used to demonstrate added value to residential appraisals. Our last blog
discussed numerous approaches to green home appraisal methods. This blog will
discuss how a home’s energy rating can be used to determine increased
value. The Home Energy Rating System
(HERS) Index is the industry standard by which a home’s energy efficiency is
measured (www.resnet.us).
A typical resale home has a HERS score of 130. This may vary
somewhat depending on climate zone and the type of HVAC systems in a home. The
original HERS national reference standard new home had a HERS score of 100
based on the 2006 International Energy Conservation Code (IECC), but this
changed after the 2009 IECC was passed. Today the standard reference home has a
HERS score of around 85. After the passing of the 2012 North Carolina Energy
Conservation Code, a new home’s HERS score
in the Tarheel state is around 82. A typical ENERGY STAR Version 3 home can
have a HERS score anywhere between 60 -70 depending on HVAC types and climate
zone. Finally to make things even more confusing, a home built to the North
Carolina High Efficiency Residential Option (HERO) code, which is an optional
part of the 2012 North Carolina Energy Conservation Code, will have a HERS
score somewhere around 78.
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| Figure 1: NC and Surrounding States Issued a HERS Score in 2013 |
Now with all of that said, what in the heck does it mean?
Are we comparing apples to apples or are we comparing apples to oranges?
Originally when the index first emerged, we used the 2006 IECC reference new
home with the HERS 100 score to demonstrate that it was 30% more efficient than
the standard existing home with a score of 130, and a home with an 85 HERS
score was 15% more efficient that the reference home with a score of 100. One
thing is for certain, the lower the HERS score the better. Many in the industry visualize a net zero
energy target with a HERS score of “0” to be the eventual goal. However, in
order to accomplish this one must almost certainly use some type of renewable
energy such as photovoltaics (PV). In the meantime, we are seeing builders
achieve HERS scores in the 40’s, 50’s, and even the 30’s. These low numbers can
only be achieved by thoughtful attention to detailed insulation and air
sealing, an integrated design approach, and very efficient HVAC systems.
So, how can we use this information to demonstrate added
value on an appraisal? We have seen people use a home’s score in formulas they
have derived in an attempt to quality energy savings compared to typical comps
built to code, but a more accurate method is to reference the Energy Cost and
Feature Report that the Residential Energy Analysis and Rating Software
(REM/Rate) provides. REM/Rate is what energy raters use to generate a home’s
HERS score in the first place. The Energy Cost and Feature Report summarizes the annual utility costs that take
into account heating, cooling, water heating, lights, appliance costs and the
major energy design features of the home.
The report also gives monthly savings compared to the HERS 100 2006 IECC
reference home. These numbers can be used by appraisers to quantify total
annual energy costs and/or monthly savings compared to other standard code
built homes. The Appraisal Institute’s Residential Green and Energy Efficient
Addendum (http://www.appraisalinstitute.org/assets/1/7/ai-residential-green-energy-effecient-addendum-2.pdf)
also includes line items for this information. Residential Energy Services
Network (RESNET) is currently working with the Appraisal Institute to
streamline the process of populating the data on the Residential Green and
Energy Efficient Addendum by integrating it into the REM/Rate software package.
Building professionals can help this process by getting this
information into the hands of the appraiser. This can be accomplished by
including it on the MLS, by actually giving it to the appraiser, and through
more education. Our next blog will highlight high performance building market
data in North Carolina and its surrounding states.
