Benefits of Working with ENERGY STAR: A Self-guided Tour for Residential Professionals

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Benefits of Working with ENERGY STARA
Self-guided Tour for Residential Professionals
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OUTLINE

• What is ENERGY STAR?
• The Science Behind the Value
• Signs of a Changing Environment
• Benefits to Consumers
• How ENERGY STAR Affects the Real Estate Industry
• How You Can Get Involved

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WHAT IS ENERGY STAR?
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WHAT IS ENERGY STAR?

• ENERGY STAR is a joint program of the EPA, the
  DOE and private business partners, helping us all
  save money and protect the environment through
  energy efficient products and practices which
  deliver same or better performance.

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BRAND ADVANTAGE

• Brand Shorthand
• Truly Energy Efficient
• Credible
• Environmental Leadership

Recognized by gt70 of households by end of 2007
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BRAND ADVANTAGE
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WHAT IS THE ENERGY STARNEW HOMES PROGRAM?

• Government-backed label
• At least 15-20 more efficient than local code
• Third-party verified
• Whole-home performance
• New way to sell homes
• Voluntary proof of your leadership

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How You Know its ENERGY STAR

• Look for the label located on the circuit
  breaker box

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REVIEW

• ENERGY STAR is a public/private partnership which
  strives for and achieves
• Truly efficient products and services
• Credible and authoritative results
• Environmental leadership
• Customer satisfaction

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THE SCIENCE BEHIND THE VALUE
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WHATS AN EFFICIENT HOME?
Affordability
Comfort
Sustainability
Durability
Healthy conditions
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WHATS AN EFFICIENT HOME?
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KEY COMPONENTS TARGETED BY ENERGY STAR
Control Air Flow
Control Moisture Flow(Vapor, Bulk)
Control Thermal Flow
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WHATS AN EFFICIENT HOME?
Control Air Flow
Control Thermal Flow
Control Moisture Flow(Vapor, Bulk)

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ENERGY STAR Qualified Homes Features
Effective Insulation
Tight Construction and Ducts
High Performance Windows
Efficient equipment
Third-party verification
Lighting and Appliances
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EFFECTIVE INSULATION

• This means properly installed and high-quality
  insulation which
• Reduces heat transfer to improve comfort and
• Protects homes from moisture damage which
  improves durability
• A Home energy rater will visit the home at
  pre-drywall stage and inspect it using the
  thermal bypass checklist to ensure the insulation
  is installed with no gaps, voids or compressions.

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HIGH PERFORMANCE WINDOWS
Improved technology reduces heat transfer
Low-E glass reflects light UV rays
Non-toxic gas fills insulate better
Multiple panes insulate better
Warm edge spacers reduce heat flow condensation
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TIGHT CONSTRUCTION AND DUCTS
In an average home, ducts can leak 20-30, which
compromises comfort and distribution of
air. Properly sealed ducts will minimize leaks,
humidity, dust, pollen, and pests in the home.

• Expanding foam is used to seal holes and cracks
  in the homes envelope.
• Reduces the amount of humidity, dust, pollen,
  pests, and noise that can come inside
• Helps maintain even temperatures and
• Can save up to 20 on heating and cooling costs.

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EFFICIENT EQUIPMENT

• As much as half of the energy used in homes goes
  to heating and cooling. Therefore, equipment
  plays a critical role in the efficiency of a
  home.
• Efficient, properly sized HVAC systems
• Use less energy
• Reduce indoor humidity
• Are quieter than other systems
• If a system is installed that is too large for
  the home, it not only costs more, but also
  operates less efficiently, and can cause comfort
  and humidity problems.

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LIGHTING AND APPLIANCES
ENERGY STAR qualified homes include ENERGY STAR
qualified products from at least one of these
categories HVAC or Windows or 5
lights/appliances
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THIRD PARTY VERIFICATION

• Home energy raters inspect the homes twice
• during the construction
• To inspect air sealing and insulation details at
  pre-drywall stage using the
• Thermal Bypass Checklist shown here

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THIRD PARTY VERIFICATION
and 2) To measure the leakiness of the building
envelope and ducts.
Here, a home energy rater is employing the blower
door test to measure air leakage in the building
envelope.
And here, a home energy rater is using the duct
blaster test to measure the leakiness of ducts.
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REVIEW

• ENERGY STAR qualified homes address air, thermal,
  and moisture flow through six major performance
  features
• Effective insulation
• High performance windows
• Tight construction and ducts
• Efficient equipment
• Lighting and appliances
• Third party verification

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SIGNS OF A CHANGING ENVIRONMENT
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YOUR CUSTOMERS MAY NOT REALIZE
US Energy Consumption by Sector
Source US Energy Information Administration
statistics
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INCREASING INTEREST

• Its estimated that more than half of builders
  nationwide are involved in green building in some
  way.
• The National Association of Home Builders
  estimates that by 2010, 5 -10 of homes will be
  completely green, in addition to others which
  will have some eco-friendly features.

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GOING GREEN BEGINS WITH ENERGY STAR BLUE
Step 3
Up to 30-50 of green building point systems are
related to energy efficiency
Step 2
Step 1
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GOING GREEN BEGINS WITH ENERGY STAR BLUE

• Green building means improving the way that homes
  and homebuilding sites use energy, water, and
  materials to reduce impacts on human health and
  the environment.
• Building a green home means making
  environmentally-preferable and sustainable
  decisions throughout the building process to
  minimize the environmental impact of the home,
  while it is being built, and over the years it
  will be lived in.

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Indoor airPLUS Program
EPA has also created the Indoor airPLUS program
to address indoor air quality in new homes. This
label requires that the home first qualifies as
ENERGY STAR, and then addresses issues such as

• Moisture Control
• Pest Control
• Radon Control

• HVAC Systems
• Combustion Safety
• Building Materials

Look to the wide variety of available green home
programs to complete the picture with
water-efficient products, renewable energy
technologies, waste reduction, recycling, and
sustainable land development practices.
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REVIEW

• Consumers are increasingly interested in going
  green
• 21 of U.S. energy consumption is used by homes.
• 17 of greenhouse gas emissions are produced by
  homes.
• Energy efficiency is a critical component of
  green building.
• In addition to ENERGY STAR, EPA has also created
  the Indoor airPLUS Program.

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BENEFITS TO CONSUMERS
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BENEFITS TO CONSUMERS

• Typical
• Price
• Location
• Facade
• Floor Plan
• Amenities

Features Effective Insulation Adv.
Windows Tight Construction Ducts Efficient
Equipment Lighting and Appliances Third-party
Verified
Additional Benefits Quieter More Comfortable No
Drafts Fewer Bugs/Pests Better Indoor Air
Quality Higher Quality Less Maintenance
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BENEFITS TO CONSUMERS

• The financial benefits
• you cant see
• Lower ownership costs
• a better investment
• Lets take a look at an example

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VALUE BASED ON PRICE

• Compact
• Fluorescent
• Light Bulb (CFL)
• 3.50

Comparing initial prices makes the incandescent
bulb seem like the obvious choice. BUT
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CONSIDERING TIME EFFORT
The CFLs in an ENERGY STAR qualified light
fixture only need to be changed once every 8
years on average, compared with an annual
ladder-climb for incandescent light bulbs. 
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CONSIDERING PERFORMANCE
CFLs also have these performance benefits
100 Watts
25 Watts
100 Electricity
100 Electricity
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CONSIDERING TOTAL COST
CFL Lighting (8 years)
Incandescent Lighting (8 years)

• Initial Investment .50 Initial
  Investment 3.50
• Energy (lifetime) 40.00 Energy
  (lifetime)10.00
• Bulb Replacement 3.50 Bulb Replacement
  .00
• Total Cost 44.00 Total Cost13.50

Assuming 1,000 hours/yr. operation and .097
cents/kWh. All costs, except initial cost, are
discounted over the products' lifetime using a
real discount rate of 4.
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THIS COMPARISON WORKS WITH NEW HOMES TOO
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COSTS FOR ENERGY STAR

• Based on 2,000 additional financing, additional
  mortgage payment is 15 per month
• Use substantially less energy for heating,
  cooling, and water heating-delivering 35/mo
  savings
• Potential for positive cash flow starting on
  move-in day
• Plus more comfortable, quieter, and third-party
  tested
• If energy prices rise, savings will only increase

Figures are for illustrative purposes only.
Assuming 30 years and 6.5 interest.
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MORE VALUE

• Investment ReturnExample A 2,000 cash purchase
  for additional energy features yields 35
  investment return rate (after taxes) over an
  average 7-8 years of ownership

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MORE VALUE

• Lower Maintenance Cost- Avoided moisture
  damage- Low-E windows reduces sunlight damage to
  furnishings wood floors- Longer-lasting
  equipment

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MORE VALUE

• Potential Higher Resale Value- Track record of
  low bills- Reduced obsolescence compared to
  other homes
• - Government-backed label for high-performance

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REVIEW

• By adding ENERGY STAR features to a home,
  homeowners will receive added benefits that make
  the home
• High-performing
• Affordable
• Environmentally friendly and
• Easier to maintain.

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HOW ENERGY STAR AFFECTS THE REAL ESTATE
APPRAISAL INDUSTRIES
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KEEPING YOUR BUSINESS ON TOP

• How do you maintain your status in a crowded and
  increasingly competitive market?
• Supporting ENERGY STAR qualified homes can help
• With growing concerns about rising energy costs,
  new homes that earn the ENERGY STAR offer
  homebuyers lower utility and reduced maintenance
  costs, while providing improved comfort and
  greater durability.

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CONDITIONS AFFECTING VALUE

• High Utility Bills
• Comfort Problems
• Cold/Warm Drafts
• Unevenly Conditioned Rooms
• Musty Smell
• Durability Problems
• Peeling Exterior Paint
• Presence of Mold
• Wet Basements
• Wet Stains on Walls/Ceilings
• Ice Dams in Winter

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VALUE PROPOSITION
Savings Comfort Durability Health
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VALUE IN THE WHOLE

• A traditional appraisal process of incandescent
  vs. CFL would have missed more than
• 30 of value for a single light fixture.
• This exact same value proposition is becoming
  increasingly important for whole-house
  performance...

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NEW VALUE INDICATORS FOR HOMES

• Property damage cases in courtsMoisture mold
  claims have surged, with more than 10,000
  mold-related lawsuits happening at one time.
• Insurance Information Institute, 2006
• Consumer willingness to pay
• In 2007, consumers said that the first thing
  they would do if they had an extra 10,000 to put
  into their homes would be to replace flooring and
  countertops in 2008, it was replace windows and
  upgrade their heating and cooling systems to save
  energy.
• Shelton Group, 2008

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Energy efficient features and cosmetic upgrades
top the list of best remodels for the buck.
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NEW VALUE INDICATORS FOR HOMES

• Asthma
• Recent studies have shown that moisture damage
  and mold growth in the main living quarters of a
  home are associated with the development of
  asthma in early childhood.
• Moisture damage and childhood asthma a
  population-based incident case-control study

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OPTIONS FOR CONSIDERING VALUE

• Determine the following for consumer reference
• The value of an ENERGY STAR qualified home based
  on sales comparison
• Calculated or actual utility bill savings(HERS
  Score or ENERGY STAR BOP)
• Monthly energy savings
• Present value of energy savings
• Cost of energy efficiency improvements added
  based on table of values by measure

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REVIEW

• Based on 2,000 additional financing and an
  additional mortgage payment of 15 per month,
  consumers will
• Use substantially less energy for heating,
  cooling, and water heating, delivering 35/mo
  savings
• Have potential for positive cash flow the day
  they move in
• Have a more comfortable, quieter, and third-party
  tested home
• Save more if energy prices rise

Figures are for illustrative purposes only.
Assuming 30 years and 6.5 interest.
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HOW YOU CAN GET INVOLVED
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FOR REAL ESTATE PROFESSIONALS
You can increase customer satisfaction by selling
ENERGY STAR qualified homes that are more
comfortable, require less maintenance, have
improved indoor air quality, and cost less to
own.
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FOR APPRAISAL PROFESSIONALS

• The best way to gain more
• referrals is to provide
• expert guidance to your clients
• Determine the value of an ENERGY STAR qualified
  home based on a sales comparison.

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RESOURCES TO HELP YOU SELL
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BEHIND THE WALLS
This is a great link to send relocation buyers.
Consider displaying the tour in your office.
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ORDER OR DOWNLOAD ENERGY STAR MATERIALS

• Help your clients understand the features and
  benefits of ENERGY STAR.

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WORK WITH ENERGY STAR PARTNERS IN YOUR AREA

• You can find them by visiting the Partner
  Locator. Also, encourage builders you work with
  who are not currently constructing ENERGY STAR
  qualified homes to join the program. Be sure to
  mention the benefits to participation, such as
  increased profits and market differentiation.

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BE A LOCAL ENERGY STAR EXPERT

• Download presentations and other marketing
  resources from the ENERGY STAR Web site to
  educate customers.
• Speak to groups such as the local Chamber of
  Commerce, Association of Realtors, Home Builders
  Associations, inspectors, and appraisers.
• Prepare a press release or advertorial about your
  support of ENERGY STAR for local newspapers,
  magazines, and home-related Web sites.

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HIGHLIGHT ENERGY STAR

• on your website, newsletters, and business cards
  by displaying the Ask About ENERGY STAR logo.
• Be sure to follow the ENERGY STAR Identity
  Guidelines when using the logo.

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Brand Identity Guidelines
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Talking/writing about ENERGY STAR

• Always write ENERGY STAR in all caps
• Always add in superscript the first time ENERGY
  STAR is mentioned on a document
• Homes are qualified not certified
• Program specifications are guidelines not
  standards
• XYZ Builder is a partner not endorsed by EPA
  or the government

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PROMOTE ENERGY STAR AS A MUST HAVE FEATURE

• Support the addition of ENERGY STAR into your
  local MLS searchable listings database.

• To start the process, contact your local Realtor
  Association and encourage the addition.

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INCORPORATE ENERGY STAR INTO YOUR BUSINESS

• Consider giving your clients an ENERGY STAR
  homebuyer gift upon the sale or purchase of a
  home.
• Include items such as ENERGY STAR qualified
  compact florescent lights (CFLs).

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EXISTING HOMES

• Support energy efficiency improvements
• in existing homes.
• Encourage homeowners who are planning to sell
  their home to have an energy audit completed and
  make ENERGY STAR-recommended home improvements to
  increase their homes efficiency.

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REVIEW

• You can incorporate ENERGY STAR into your
  business by
• Using the online resources
• Create financial analyses for your clients to
  show the benefits of owning an ENERGY STAR
  qualified home.
• Work with local ENERGY STAR partners
• Support the addition of ENERGY STAR into your MLS
  searchable listings database
• Encourage sellers to have an energy audit on
  their home and make improvements to increase
  their profits.

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ENERGY STAR AND YOUR BUSINESS

• The building industry is adapting to a changing
  environment and there are many ways for real
  estate agents and appraisers to incorporate this
  program into their business models to offer
  clients high performance features and increase
  customer satisfaction.

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FOR MORE INFORMATION

• Visit us on the Web
• http//www.energystar.gov/homes
• Or call the ENERGY STAR hotline
• 1-888-STAR-YES