I want to take this occasion to wish a happy 20th anniversary to — no, not my wife (because that anniversary would be closer to 40 years) but to Energy Star!
Yes, the joint U.S. Environmental Protection Agency/U.S. Department of Energy program has been around for 20 years, although the new-home designation didn’t start until 1995. What will two decades of designation bring forth?
Well, a couple of things: a record number of new homes getting the prestigious Energy Star certification, and a host of more stringent code requirements being put into place.
The ubiquitous and useful Energy Star program helps consumers save money and protect the environment by using less energy. In the residential real estate world, that means using more energy-efficient products like refrigerators and dishwashers. Plus, for the past 17 years, homes built to energy-efficient standards guarantee fewer kilowatt-hours of electricity used to heat and cool.
For the consumer, lower utility bills; for the world, a cleaner environment. A win-win for all.
Today, some 6,500 homebuilders have signed on to the Energy Star program, which means their homes meet certain specific energy-efficiency mandates, including:
- Effective whole-house insulation systems.
- High-performance (low-e, gas-filled, double- or triple-paned) windows.
- Careful construction to insure a leak- and draft-proof home.
- Effective yet energy-efficient heating and cooling equipment.
- Lighting and appliances that meet Energy Star standards.
The candle on the anniversary cake for Energy Star is the news from its most recent survey that 25 percent of all single-family homes built in the United States in 2010 earned the Energy Star certification.
"This is an increasingly good trend line," said Jonathan Passe, director of Energy Star’s residential business. "Through the course of the program, we have seen a steady uptick annually in the percent of Energy Star-qualified homes as a function of all new homes built in the marketplace."
In 2009, the percentage of newly constructed single-family homes carrying the Energy Star certificate was 21 percent; in 2008, it was 17 percent; and in 2007, 15 percent.
"We think that is a fantastic success story, particularly in consideration to the overall slowdown in the marketplace," Passe said. "Although the total number of new homes has fallen dramatically, the percentage of those homes that are Energy Star continues to rise."
In not that easy to be Energy Star-certified.
"There’s a common misconception that a new Energy Star home means there is a lot of Energy Star-certified appliances and lights on the inside," Passe said. "It actually goes a whole lot deeper than that. It is also about effective insulation systems, air sealing of the building envelope, and high-efficient heating and cooling systems. Plus, third-party verification by a qualified professional."
A certified Energy Star home today is about 20 to 30 percent more efficient than the typical new home put on the market.
Coincidental to the 20th anniversary year of Energy Star is the implementation, which began on Jan. 1, of more rigorous requirements for homes to earn the Energy Star label.
This is being done for two reasons. First, at 25 percent penetration nationally, if Energy Star is to maintain its promise to the consumer that buying a qualified product means you are getting something significantly more efficient than the typical house, the bar needs to be raised.
Secondly, other codes, including International Energy Conservation Codes, or IECC, are becoming tougher.
"We have some codes that (are) approaching or, in some cases, exceeding current Energy Star levels, so we must raise the bar to maintain the Energy Star promise," Passe said.
Generally, here’s what to expect: more stringent equipment efficiency requirements in regard to windows, HVAC and building envelope performance, and for the first time an HVAC system quality installation inspection.
"We are requiring that homes earning an Energy Star certification have HVAC systems installed by specially trained and qualified HVAC contractors, who are installing systems in accordance with national recognized standards," Passe said.
Passe considers a 25 percent penetration as a tipping point in terms of builder recognition. However, Energy Star requirements will probably continue to become more stringent, so attaining a 50 percent penetration is probably going to be unattainable.
Although about 1.3 million homes are Energy Star-certified, the interesting detail is that Energy Star penetration on a state-by-state basis is widely divergent. The results are literally all over the map.
At the top of the list with 77 percent penetration is Hawaii, followed by Nevada at 66 percent, Iowa at 57 percent, Arizona at 52 percent, Ohio at 50 percent, Colorado at 45 percent, Texas at 44 percent, and Maryland and Oklahoma at 42 percent.
Going toward the bottom of the list with Energy Star-qualified new homes indexed with a penetration of between 3 and 11 percent are: Arkansas, Georgia, Illinois, Kansas, Mississippi, Missouri, Montana, North Dakota, Oregon, South Carolina, South Dakota and Tennessee.
Believe it or not, even today there are a handful of states where new-home Energy Star penetration is less than 3 percent: Alaska, Louisiana, Maine, West Virginia and Wyoming.
To be last on the list has to be strange because becoming an Energy Star partner means gaining a market differentiator when selling homes.
These days, a new home is not just competing with another builder on the next block — mainly because that builder is probably out of business. No, the real competition is with existing homes that are selling at bargain-basement prices because of the economy or that it’s a REO or short sale.
Why buy new? Well, one of the reasons is that a new home is much more energy efficient.