Promoting Higher Energy Efficiency Standards in New Homes

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Promoting Higher Energy Efficiency Standards in
New Homes
Kim Calomino, Home Builders Association of Metro
Denver Built Green Colorado kcalomino_at_hbadenver.
com, builtgreen.org, hbadenver.com
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Overview

• The connection between green building and energy
  efficient building
• Impact of changing energy codes
• Impact of and the growing number of voluntary
  programs
• The Colorado Example The role of a voluntary
  program in a Home Rule state
• What are the existing Drivers?
• What are possible policy Drivers that could
  further boost green energy efficient building?

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The ConnectionGreen Energy Efficient plus

• The cornerstone of green building is energy
  efficiency
• Energy use is the largest environmental footprint
  of a building over its useful life
• Cost-effective energy efficient construction is
  best accomplished in a systems approach, another
  cornerstone of green building
• The systems approach also addresses durability,
  resource conservation, waste reduction and
  healthy human environments

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What difference have codes made?

• The International Codes vs. the old way
• Increased uniformity
• Greater industry input
• Advances in building science increasingly
  embraced
• Legitimatized energy efficiency as a worthy
  topic of codes
• While codes have pulled some along, they are only
  as good as those that write, interpret and
  enforce them
• Not where the real action is

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The Impact of Voluntary ProgramsTrend or
Watershed?

• Remember, green energy efficient plus
• No longer identified as a trend, voluntary
  green building shows signs of permanency
• 70 local/regional green building programs
• 11 national programs or initiatives
• Numerous utility-based programs
• Green community design guidelines growing in
  number
• Nearly all major trade publications cover green
  topics
• Green building magazines, products product
  directories, conferences, 3rd party standard
  verification entities, websites, consultants
  books, abound no longer just a cottage industry

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The Impact of Voluntary ProgramsTrend or
Watershed?

• EPA starts thinking greener
• Energy Star program expands to include indoor air
  quality, durability, lighting efficiency
• Rolls out its new WaterSense program
• NAHB published green building guidelines,
  partnered with ICC on green ANSI standards, is
  developing national program
• Masco grows its Environments for Living program,
  partners with GE to develop their own green
  building program
• DOEs Building America program feeds building
  science into green building
• RESNET improves tools (with some missteps), ups
  the ante

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Voluntary ProgramsSome interesting outcroppings

• US Green Building Council takes aim on
  residential construction with LEED for Homes
• Green Globes enters the U.S. market to offer
  affordable alternative to LEED commercial
• ICC adopts policy on green building, expands
  boundaries of public safety plans greening of
  the codes
• Local state elected officials decide to show
  leadership (create green mandates) in the wake of
  the massive voluntary movement
• Colorado legislature passes record number of
  energy conservation and renewable energy bills
• Federal government extends energy tax credits for
  highly energy efficient homes

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So Many Working to Define Green Energy
Efficient What is IT?

• Green ( energy efficient) is a continuum
• Voluntary programs have moved market demand and
  allowed for the continuum
• Every builder starts somewhere, moves to
  somewhere and continues to move accessible
  entry points are critical
• Costs are a continuum whats the additional
  cost to build green/energy efficient? It depends
  on the starting point and the choices made
• The continuum allows for both market demand and
  affordability

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Builder case studyMcStain Neighborhoods

• Energy Efficiency Features Savings and Cost
  Premiums
• Row Home 1733 sq. ft.
• Features Annual Savings Cost
  premium
• Advanced framing 2x6 36 545
• Windows w/ low emissivity argon-fill 55 210
• 92.1 direct vent furnace 88 900
• Water heater sealed combustion 22 400
• Advanced insulation system 89 975
• Infiltration/advanced air sealing 81 410
• Sealed conditioned Crawl space 19 110
• Engineered duct distribution system 60 920
• All ducted system, inside conditioned space
• Set back digital thermostat
• Fireplace w/ Electronic ignition 72 0
• Downsize furnace/AC 43 -750
• Mechanical ventilation -10 300
• 3rd Party verification and energy commissioning
  0 580
• Total 555 4600

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Builder case studyMcStain Neighborhoods

• Indoor Air Quality, Resource Conservation,
  Durability Cost Premium
• Row Homes 1733 sq. ft.
• Features Cost Premium
• Exterior drainage plane 166
• Finger joint studs 0
• Engineered lumber products 136
• Cementitious siding material 0
• Recycled content decking 10
• Low VOC paint and finishes 332
• Recycled PET carpet
  175
• Ductwork cleaning 300
• Sealed combustion appliances incl.
  fireplace 200
• Blown cellulose insulation 0
• High performance bath fans 225
• Sealed sump pit cover 60
• Total Cost Premium 1604

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Builder case studyMcStain Neighborhoods
Higher first cost, lower net cost.
230,000 home built to code Length of Loan in
Years 30 Interest Rate 6 Loan Amount
230,000 Annual Property Tax 1200 Annual Insurance
400 Monthly Principal Interest 1378.96 Monthly
Tax 100 Monthly Insurance 33.33 Total Payment
1,512.29 Monthly utility costs 125.00 Monthly
total with utilities 1637.29
236,204 Energy Efficient Home  Length of Loan in
Years 30  Interest Rate 6  Loan Amount
236,204  Annual Property Tax 1200  Annual
Insurance 400  Monthly Principal Interest
1416.16  Monthly Tax 100  Monthly Insurance
33.33 Total Payment 1,549.49 Monthly Utility
Costs 78.00 Monthly total with utilities
1,627.49
Total increase in monthly PITI 37.20 Total
decrease in monthly utilities 47 Net Monthly
Savings 9.80
IECC 2003
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The Colorado Example Built Green in a Home Rule
State

• No state building code
• No meaningful state energy code checkerboard
• Historically energy efficiency not a high
  priority for code enforcement
• Built Green introduced a level playing field
  well in advance of the International Energy
  Conservation Code
• Set the stage for broad improvements and
  innovations driven by competition, education,
  consumer awareness
• Paved the way for the IECC and ultimately for
  recent legislation regarding county-adopted
  energy codes

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Built Green ColoradoA Brief History

• Non-profit and self-funded, Built Green was
  formed by the HBA in 1995 in cooperation with the
  Governors Energy Office, Xcel Energy and E-Star
  Colorado
• The first industry-led program of its kind and
  widely recognized as a leader, Built Green
  remains the nations largest green building
  initiative
• Has influenced both the National Association of
  Home Builders and its local affiliates as well as
  its Canadian counterparts
• Nearly 200 builder and 50 sponsor members
  statewide
• Increasingly penetrating the market, Built Green
  homes currently represent approximately 25 of
  residential permits in the 8-county Denver metro
  area, and 12 statewide
• Embraced by, and seen as bringing value to, both
  the industry and the consumer

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Why Built Green Colorado?

• Why does the Colorado home building industry
  support a voluntary, industry-led green building
  program?
• Opportunity
• Choice in the marketplace for the buyer
• Builder/Brand distinction in a competitive market
• White Hat for the industry
• Responsibility
• Builders can have lasting and meaningful impact
  through their home building practices can
  influence the direction of developing
  technologies and materials
• Provide homes that are less costly to operate,
  healthier, more durable
• All major industries are called upon to address
  their share of environmental responsibility
• Necessity Either lead or be regulated

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Built Green Mission

• Built Green Colorado will encourage, through a
  combination of marketing, education and
  technology transfer, the voluntary integration of
  building products and practices that demonstrate
  energy, water and natural resource efficiency
  sound economics and healthy human environments.

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Built Green Program Structure

• Built Green is an above-code program with
  requirements that increase over time
• Energy efficiency is central require 15 above
  IECC 2006 based on performance
• Also addresses indoor air quality, durability,
  resource conservation, health and safety, water
  conservation
• Flexibility in routes to compliance and
  incremental change in requirements have been key
  to builder acceptance

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Built Green Builder Benefits

• Market distinction in a highly competitive market
• Increasingly educated, fiscally conservative
  environmentally concerned consumers are drawn to
  the benefits
• Allows proactive demonstration of commitment to
  community, future generations, environment
• Alignment with the Built Green halo helps both
  in the market place and in the approval process

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Built Green Builder Requirements

• Submittal of documentation for 3rd party review
• From-plans energy analysis on all housing types
• Random third-party inspection testing of at
  least 5 of registered homes at builders expense
• Meet builder education requirement
• Participate in promoting Built Green

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Built Green Responsibilities

• Aid builder in obtaining technical assistance
• Provide training opportunities
• Conduct general advertising, promotional and
  public relations campaigns
• Engage in regulatory dialog
• Monitor compliance
• Ensure program integrity, value and benefit
• Protect the brand
• Be a leader

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Built Green is an example of a Driver.Its
Working. Why?

• Industry ownership, trust, knowledge, motivation
  and pride
• Flexibility in routes to compliance and steady,
  incremental change in requirements have been key
  to builder acceptance
• Accessible, not unduly burdened with bureaucracy,
  layers, costs
• Fosters innovation, creativity, competition
• Program provides marketing support to build
  consumer awareness and demand
• Grows support industries, subcontractor
  knowledge, manufacturer response

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The Market is a Driver

• Why? What U.S. consumers say
• 78 say they would buy one home over another
  based on energy efficiency
• 55 say they would spend more (avg. 9600) for a
  home that would reduce utility bills and
  potentially increase resale value
• Most say theyd be willing to wait 3 years to
  recoup additional upfront investment
• 9 said they had recently purchased an energy
  efficient home
• 48 dont know if builders/architects in their
  area are knowledgeable about or include home
  energy efficiency features (disconnect)
• Source Energy Pulse 2005 What America Thinks
  about Energy Efficient Homes and Conservation,
  The Shelton Group

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The Market is a Driver

• Why? What the builders say
• 92 of builders say its the right thing to do
• 87 identify lowering life-cycle costs
• 82 seek competitive advantage
• 82 say they are expanding business with
  interested customers
• 78 say it helps limit liability exposure
• 78 say they reap publicity benefits
• Life-cycle costs edge out other business
  motivations, suggesting builders are mindful of
  buyers needs to mitigate rising energy costs and
  other on-going expenses that can be reduced in
  green homes
• Source McGraw Hill Construction 2006

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What are the possible policy drivers to add to
the mix?

• Continued federal tax credits for energy
  efficiency beyond code, but more attainable
• Add State tax incentives
• Assist with the introduction of renewable energy
  technologies
• Support whats working (voluntary programs) to
  achieve even greater success
• Support both consumer and industry education
  help create demand
• Partner, dont compete with the private market
• Dont single out the new housing industry there
  are far more old homes than new

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Why not reinvent the wheel?

• Green building grew from the bottom-up industry
  initiative, local programs have been primary
  drivers
• The home building industry is clearly on the
  verge of a significant shift
• The remodeling industry is behind but working to
  catch up Needs greater, if not the greatest,
  focus
• The growing number of labeling programs will
  cause some confusion, but will drive competition,
  improvement
• Consumer awareness and demand will continue to
  grow
• National codes will green up but industry
  innovation will continue to lead

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A few closing thoughts

• Innovation will always be ahead of regulation,
  but multiple motivators and entry points are key
• Awareness of and demand for green energy
  efficient homes will in turn drive demand for
  recognition in appraisals and mortgage products
  are they ready?
• Policy makers need to support the market at work
  using incentives, education
• Re-inventing the wheel (creating mandates) will
  slow progress, reduce innovation and competition,
  and ultimately redirect efforts

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And one more

• An interesting and provocative idea from Alex
  Wilson, editor of BuildingGreen
• Create an Environmental Service Corps something
  akin to a cross between the Civilian Conservation
  Corps of the 1930s and the Peace Corps launched
  by President Kennedy in 19961.
• Among the roles this Corps could serve would be
  to dramatically upgrade the energy performance of
  our 120 million existing housing units.

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Contact information

• Kim Calomino, Built Green Colorado
• Home Builders Association of Metro Denver
• kcalomino_at_hbadenver.com
• www.hbadenver.com
• www.builtgreen.org