Greg, a rental property owner in Austin, Texas owns a single-family house that is over 30 years old. Although he maintained the property, his new tenant complained that she was too cold and that the house was drafty and uncomfortable. Most mornings she had to turn on the oven to compensate for the leaky building‘s poor insulation.
A local weatherization contractor, Green Collar Operations, was invited to perform an energy audit pre-inspection. This free analysis revealed that the attic insulation had shifted and now barely covered the space. Leaky ducts, and large cracks in the doors and windows were allowing cold air to penetrate into the home. New insulation, duct work, caulking, and weather stripping were installed.
Immediate Results: Increased Comfort and Lower Utility Bills
The next morning, the tenant happily reported that the drafts were dramatically reduced and the house was more comfortable. She also reported an approximate $10-$25 monthly reduction in the electric and gas bill, which continued throughout the unseasonably cold winter. The tenant also confirmed after living in the property for almost two years that the summer electric bills were reduced slightly and the house tended to hold heating and cooling temperatures better.
In this case study, the energy reduction cost was not quantified, and the lowest savings amount, 10% of the $125 baseline utility bill, was used in the analysis (see Appendix F). Based on real estate industry formulas, the increase in this property‘s market value would represent $2,571. The $559 out-of-pocket expenses for upgrades paid by the owner-landlord represents approximately three times investment outlay in property value.
The rental house in Austin, TX is a little over 1,000 square feet. The windows and doors have never been replaced, but energy efficient appliances have been upgraded. There is no washer-dryer in the home. The occupant was a single woman who rarely ran the dishwasher and moderated her between 62-68 degrees in the winter and 70-72 degrees in the summer.
The tenant did not run heating and cooling systems during optimal seasonal weather, and chose to open the windows and use fans in areas of the home she was using. The HVAC system was over 10 years old, and is not very efficient. A metering device should be installed to reduce the system‘s burden of running consistently and controlling the temperatures. Weatherization upgrades were performed by Green Collar Operations in December of 2009.
Using GEMs averaged calculation models the incremental property value increase in this project is $2,660, demonstrating a value of over four times the original $559 out-of-pocket expenses.
Energy Efficiency Case Study Data
| PROPERTY CITY, STATE | Austin, TX | |
| SQUARE FOOTAGE | 1005 | |
| NEW/EXISTING | Existing | |
| COST OF CONSTRUCTION | N/A | |
| COST OF LAND | N/A | |
| EXISTING PROPERTY VALUE | $150,000 | |
| Cost of EE Upgrades | $984 | |
| COST OF RENEWABLES | N/A | |
| TAX CREDITS, REBATES | $425 | |
| Utility (Elec) kWH rate | 0.9 | Austin Energy |
| Average Utility Pmt | $135 | Electricity & Gas Pmt |
| Average Cost Reduction Elec | $13.5 | |
| Yearly Utility Reduction | $162 | |
| Energy Production | N/A | |
| Data not-quantified | ||
| Formula 1, PV | $2,019 | |
| Formula 2, SQ Ft *$10 | $1,620 | $10 Per Dollar Energy Savings for Weatherization |
| INCREMENTAL PROP VALUE | $1,819 | |
| Total Upgrade Investment | $559 | |
| NEW PROPERTY VALUE | $151,819 | |
| Traditional Payback | $559 x 3.45 years@ $162 year savings | |
| GEM Payback Method | $559 2.3yrs @ 1 Year @ 5 yr amortization $10 extra month | |
| FV @ 10 years | $2,200.12 | Future Value @ 10 yrs based on life-cycle potential EE |
| **GEM Payback Method includes extra energy savings pmt + Bi-Weekly payment | ||
Utility prices expected increases of 30% in next 5 years not used in calculation