Why get a professional energy audit on your home? Here are four good reasons:
- An energy audit on an existing older building is the first step toward understanding a structure’s unique needs and capacities.
- By assessing the building’s current state, the owner can address the most important problems first. This will increase savings over the long run in the most efficient way possible.
- It is equally important to provide a clear path for contractors to create measurable results.
- Most municipalities now require an inspection or energy audit in order to refund tax and rebate incentives. (They can also recommend energy auditing companies in a region, and frequently offer reduced or no-cost inspections.)
A professional energy auditor will use past utility bills, building design, construction and location, as well as occupancy behavior to determine the best approach to the upgrade. The auditor will then examine various aspects of the building, such as the age and condition of the HVAC system, the age and number of appliances, current insulation levels, and building air barrier quality, and the condition and placement of windows and doors to determine overall energy loss. Infrared or thermo graphic analyses can also be conducted to visually assess the weakest points in a building’s insulation envelope.
If a homeowner wants to make energy upgrades, he/she needs to get an accurate prediction of the energy reduction; energy audits are necessary to determine the baseline energy reduction before upgrades are incorporated. These audits and the expertise of the auditor will also help in establishing the best practices or measures needed for any building rehabilitation project.
So, what type of energy audit should you get?
In a nutshell it depends on how much a homeowner is planning to spend to improve their home’s energy efficiency. In order to present the most compelling plan to appraisers, lenders, and others, a professional audit should be conducted on non-efficient older properties, or where the owner is spending a considerable amount of capital (more than $25K is a good baseline).
When it comes to energy audits, it’s understandable if consumers become confused by the plethora of companies who offer audits; the topic is more confusing because there are different types of audits. Unfortunately it has become even more confusing because the US Federal government Office of Energy Efficiency and Renewable Energy recently began promoting a new type of home energy audit called the Home Energy Score (HES). (To see a watered-down, consumer-friendly website from the Department of Energy, click here. But consumers may be further confused if they stumble across this company that seems to be associated with the DOE but probably is not: click here.)
Instead of the HES system, it would be better for all stakeholders—lenders, appraisers, government agencies, consumers, contractors and builders—if the US government would abide by and stick with the HERS Index rating system, which is the current industry standard for rating a home’s energy performance. The HERS Index was created as a performance-based measurement of home’s energy efficiency and has proven to be an excellent tool for appraisals. The HERS Index is critical in achieving a quantified, 3rd party analysis, green appraisal evaluation and is fast becoming the most widely accepted rating tool in the country.
The HES system rates homes on a scale of 1 to 10, with 10 representing the most efficient. In contrast, the HERS Index rates homes on a scale of 0 to 100, with 100 being the least efficient. (And there are Zero Net Energy homes in the market rated below zero on the HERS scale. This means that they are generating more energy than they are using. These owners are either receiving net-energy payments from their utility company for selling their excess power back to the grid or they may be, in small cases, owners that are powering their electric vehicles with the excess power.)
The trouble with the HES system is that it is a prescriptive method, (much like a doctor giving a patient a prescription without running detailed diagnostic tests) and follows minimum building requirements basics, i.e., insulation, sealing ducts, and possibly HVAC equipment upgrades. HES prescriptive methods are not as in-depth or comprehensive as a performance-based HERS Audit. It’s a good cost effective way to go, if a homeowner wants to make minor improvements to a home’s energy efficiency, which cost under $10-15,000. But a HES audit is not diagnostically driven and can’t provide quantified 3rd party data for a green appraiser needs to justify a higher value. If you can’t justify the value for the extra costs to support the value on a green appraisal you may not be able to obtain capital outlay (loan) to pay for the upgrade.
It makes sense for the government to want to save homeowners money, as HES inspection costs range between $25-$100. If an owner is engaged in minimal weatherization measures, they would not want to incur the costs of a green appraisal or an energy audit. It really depends on the cash outlay and level of energy improvements. As an example if a homeowner is spending $50k for an upgrade and a conventional appraisal will add $5-$10k in additional value; but a green appraisal will add $38-$45k to value, it makes financial sense to pay the $400-$700 HERS Audit fee.
GEM has developed a patented method that has been tested and proven through the Green Appraisal Beta Program conducted and funded over $20M in green loan volume. The Betaprogram showed that the GEM method is a viable and accepted way to monetize, analyze, and quantify green appraisals. The Appraisal Energy Rating is now applied and noted on the energy efficiency line item on the appraisal and tied to RESNET’s Home Energy Rating System (HERS) Index score.
GEM’s Green Appraisal methods have been accepted by national and local lenders. The Green Appraisal methods include a Green Energy Addendum, developed by the Appraisal Institute which can be downloaded here.
Underwriters and appraisers now have a way to analyze risk by receiving quantified, third-party certifications (HERS Audits); the Appraisal Institute’s Green Energy Addendum and GEMs quantified analysis in appraisals. This information can justify value increases due to the low operating expenses. Today, there is no index for monetizing home performance labeling other than the HERS Index.
The following organizations are good starting points to finding trained, certified local energy auditors:
- Residential Energy Services Network, (RESNET), www.natresnet.org
- Building Performance Institute, (BPI), www.bpi, org
- Energy Star Program, (Label for new construction homes), Home Performance Program, www.energystar.gov
- Local municipalities and utility companies may offer their own version in certain regions; check with local city or your utility company websites
For further information about home energy audits, read Chapter 4 of Green Energy Money, the book I recently published.