Title: ENERGY-EFFICIENT HOMES
1ENERGY-EFFICIENT HOMES
2POLICY
- This presentation will analyze the potential
effectiveness and benefits of Energy-Efficient
Homes.
3ISSUES
- A 25 reduction of foreign oil imports would
cause the price of oil to increase. - This in turn would cause the cost of heating a
home (that uses oil for its heat) to increase. - Also, the price of gas at the pumps would
increase, creating greater monthly expenses for
all who drive. - Energy efficient homes create other benefits not
related to oil.
4CONCLUSIONS
- Energy efficient homes can dramatically decrease
the cost of maintaining the average home. - Energy efficient homes also have the benefit of
using renewable energy sources, which conserves
existing energy resources.
5BACKGROUND
- Industries aside, our homes are the chief
consumers of many energy sources. - The amount of energy wasted just through poorly
insulated windows and doors is about as much
energy as we get from the Alaskan Pipeline each
year. - The amount of electricity generated by fossil
fuels for a single home puts more carbon dioxide
into the air than two average cars.
6- Almost every home in the United States could be
powered by renewable energy of some kind to a
greater or lesser extent. - Converting existing homes to energy-efficient
homes, and building only new homes which are
energy-efficient, would result in a myriad of
benefits, both long term and short.
7EXISTING HOMES
- Improvements to an existing home, to make it an
energy efficient home, focuses chiefly on
ensuring that every aspect is properly installed,
insulated, and all equipment is energy efficient.
The major areas of concern are - Building Envelope
- Space Heating and Cooling
- Water heating and supply
- Waste water
- Appliances
- Garbage
- Lighting
8NEW HOMES
- Construction of a new home can take advantage of
a concept known as Whole Building Design. - Whole Building Design takes an integrative
approach to building design so that all elements
of the building help achieve an optimal energy
performance. The building has to interact
effectively with the outdoor environment a
concept known as climate-responsive architecture. - Whole Building Design combines
Energy-Efficiency with Solar Technologies to
boost energy savings, and it reduces the amount
of energy required to operate a home compared to
conventional houses.
9NEW HOMES (CONT.)
- The Energy Efficiency aspect of Whole Building
Design is concerned with the same areas as
mentioned with Existing Homes. - The Solar Technologies incorporated into the
Whole Building Design involves the use of
Passive Solar Design and Solar Thermal Technology.
10NEW HOMES (cont.)
- Passive Solar Design
- Is the technology of heating, cooling, and
lighting a building naturally with sunlight
rather than with mechanical systems. - Some design features include large south-facing
windows and building materials that absorb and
slowly release the sun's heat. - It can also involve the use of Photovoltaic (PV)
technology. PV is basically "solar electricity"
that results from converting sunlight into
energy. - PV systems help preserve the Earth's finite
fossil-fuel resources such as coal, oil, and
natural gas. It also helps reduce air and water
pollution associated with these energy sources. - Incorporating passive solar designs can reduce
heating bills as much as 50.
11NEW HOMES (cont.)
- Solar Thermal Technology
- Is the use of solar water-heating systems.
- Solar water-heating systems use collectors
generally mounted on a south facing roof. - These collectors heat water either Passively or
Actively (Active being the most energy efficient).
12NEW HOMES (cont.)
External Whole Building Design Features
13NEW HOMES (cont.)
Internal Whole Building Design Features
14THE BIG QUESTION
- Relatively few homes (existing new
construction) across the U.S. are
energy-efficient homes. - Considering the environmental benefits that an
energy-efficient home creates, why havent more
people chosen to make their homes an
energy-efficient home?
15The Human Barrier
- Reluctance on the part of consumers to undertake
the conversion of their homes to energy-efficient
homes can be summed up in one word - MONEY
- The upfront costs that are required to make the
conversion are often too great a barrier for the
average consumer to overcome.
16- Some energy efficiency improvements involve
little or no implementation cost. - However, there are also improvements that can
cost a great deal of money. - Replacing a heating system can cost up to 5,000
in a large house or even more if you are
converting from electricity to another energy
source. - Installing new windows, while very beneficial to
your home and the environment, can be a financial
strain to implement.
17Overcoming Human Barriers I
- Knowledge of the long-term benefits and monthly
utility savings that an Energy-Efficient Home can
provide. - Knowledge about Energy-Efficient Home financing
programs (government backed conventional loan
programs).
18THE BOTTOM-LINE
- The average homeowner spends close to 1,300 a
year on utility bills.
19- But an energy-efficient homewith such features
as proper insulation, high efficiency heating and
cooling systems, and energy-efficient windowscan
lower utility bills by 10 to 50 percent. - This would all be reflected in a myriad of
benefits, both long term and short.
20Where the Money Goes
21FINANCING AN ENERGY EFFICIENT HOME
- Because an energy-efficient home is
cost-effective, there are financing programs
available from mortgages to home improvement
loans, which allow more people the opportunity to
live in such a home. - Consumers can benefit from energy-efficient
financing whether buying, selling, refinancing,
or remodeling a home.
22- People looking to buy an energy-efficient home,
can qualify for a better, more comfortable home
because with lower utility costs, they can afford
a larger mortgage payment. - Most Energy-Efficient financing programs will
encourage you to have an ENERGY RATING for your
new or existing home, which will tell you and the
lender how energy efficient it is. - A rating typically involves an inspection by a
professional energy rater who is certified under
a nationally or state accredited Home Energy
Rating System (HERS).
23- An energy rater will inspect the energy-related
features of a home, such as - insulation levels
- window efficiency
- heating and cooling systems
- air leakage
- After inspection, the inspector will generate a
report that includes the home's energy rating
along with an estimation of annual energy use and
costs.
24- To help qualify for most energy-efficient
financing, the report usually must show that the
home is energy-efficient or that any recommended
improvements are cost-effective and will save
more money than would be needed to be borrowed to
install them. - While calculating whether a borrower qualifies
for a mortgage, a lender can recognize these
savings and add the cost of the improvements into
the mortgage.
25- Or, if the home is already energy-efficient, the
lender can stretch the debt-to-income qualifying
ratio (a borrower's monthly payment obligation on
long-term debts divided by the borrower's net
effective income or gross monthly income). - An energy rater will inspect the energy-related
features of a home, such as insulation levels,
window efficiency, heating and cooling systems,
and air leakage.
26- Energy-Efficient financing is offered through
either government-insured or conventional loan
programs. - There are 2 types of Energy-Efficient Mortgages
- For a New Home
- For an Existing Home
- You can purchase or refinance a home that is
already energy-efficient, or you can purchase or
refinance a home that will become
energy-efficient after energy saving improvements
are made.
27ENERGY EFFICIENT FINANCING PROGRAMS
- Government Insured
- U.S. Department of Housing and Urban Development
- FHA Energy-Efficient Mortgage
- FHA Section 203(k) Rehabilitation Mortgage
Insurance - FHA Energy-Efficient Home Mortgage
- FHA Mortgage Increase for Solar Thermal Systems
- FHA Title I Property Improvement Loan Insurance
28- Government Insured (cont.)
- U.S. Department of Veterans Affairs
- The U.S. Department of Veterans Affairs (VA)
guarantees mortgage loans for veterans. - It can be used to purchase or refinance a home
along with the cost of making energy-efficient
improvements.
29- Conventional Programs
- Most of the national lenders who offer
energy-efficient financing operate through one of
the following programs. - ENERGY STAR Mortgage
- Fannie Mae
- Freddie Mac
- E Seal
- DETAILS
30HOW AN EEM SAVES MONEY
Standard Mortgage New EEM
Energy Improvement Costs 3,000
Appraisal Value 100,000 (add cost of improvement) 103,000
Down Payment 10,000 10,000
Mortgage Amount 90,000 93,000
P I 614 634
Energy Savings (Monthly) 0 (50)
Total Monthly Payments 614 584
31HOW AN EEM INCREASES BUYING POWER
For a standard home without energy improvements For a standard home without energy improvements For a standard home without energy improvements
Buyer's total monthly income 3,000 5,000
Maximum allowable monthlypayment 28 debt-to-income ratio 840 1,400
Maximum mortgage at 90 of appraised home value 132,900 221,500
For an energy-efficient home For an energy-efficient home For an energy-efficient home
Buyer's total monthly income 3,000 5,000
Maximum allowable monthly payment 30 debt-to-income ratio 900 1,500
Maximum mortgage at 90 of appraised home value 142,400 237,300
Added Borrowing Power Due to the Energy Efficient Mortgage 9,500 15,800
32(No Transcript)
33THE ENERGY EFFICIENT MORTGAGE PROCESS SIMPLIFIED
34Overcoming Human Barriers II
- It has been suggested that the only way to
encourage widespread use of Energy-Efficient
Homes is through Governmental Legislation
requiring energy-efficiency.
35Existing Legislation
- Most existing legislation is done at the state
level. - The Model Energy Code (MEC), published and
maintained by the International Code Council
(ICC), has influenced most legislation. - While not all states have a requirement regarding
the energy efficiency of homes, most states have,
in some form, adopted provisions of the Model
Energy Code (MEC). - Other states have adopted the MEC as recommended
practice but have no statewide-requirement that
all new construction use it.
36- The MEC contains energy efficiency criteria for
new residential and commercial buildings and
additions to existing buildings. - The MEC covers the buildings ceilings, walls,
and floors/foundations and the mechanical,
lighting, and power systems. - While some states have adopted the MEC without
modification, some states have adopted one of the
MEC editions with state-developed amendments.
37- In an effort to harmonize building codes across
America, the MEC was revised to become the
International Energy Conservation Code (IECC),
first printed in 2000.
38(No Transcript)
39FEDERAL INVOLVEMENT
- Federal involvement in the effort to encourage
energy efficient homes has chiefly come in the
form of tax incentives. - Example The Omnibus Federal Energy Bill
- Passed by the House on August 2nd
- Awaiting approval by the Senate
40The Omnibus Federal Energy Bill
- This Bill contains several tax credit provisions
aimed squarely at residential real estate. - It provides federal tax credits for homeowners
who install energy conservation items such as - New insulation
- Energy-efficient windows
- Doors
- Solar hot water
- Photovoltaic equipment
41- For owners of existing homes the credit will be
20 of the amounts spent on Qualified Energy
Efficiency Improvements", up to a maximum credit
of 2,000. - Tax credits are more valuable to taxpayers than
deductions because they are subtracted
dollar-for-dollar off the bottom line of a
taxpayers federal tax bill.
42- There is a separate credit available for the
installation of solar and photovoltaic
energy-production equipment. - These tax credits are similar to the credits for
conservation, with a maximum allowable credit of
2,000 during a tax year.
43- Under this Bill, home builders and contractors
also get a shot at tax relief. - When they install energy-efficient heating and
cooling systems in a new home they are
constructing, they may be able to qualify for up
to a 2,000 credit per home.
44- These new federal tax credits are expected to be
extremely popular. - The congressional Joint Committee on Taxation
estimates that the home improvement incentives
alone will lead to 1.6 billion worth of tax
credits to homeowners in the coming decade. - The solar and photovoltaic credits are estimated
to put 125 million back into home owners'
pockets during the same period.