The Energy Effect

By Lewis Tagliaferre | Apr 15, 2006
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I once read that Thomas Edison tried to sell houses made from preformed concrete panels without success. He reportedly said, “Nobody had any imagination so I gave up and quit.” Except for some experimental units by custom builders for wealthy, eccentric owners, home building has not changed much since Edison’s time.

Using common materials and practices, most production builders still provide what they find sells the best among the buyers in their areas. But this doesn’t apply to everyone. Ever since fuel supplies became stressed in the 1970s and 1980s, federal and state government energy agencies have been trying to get builders to improve the energy and environmental impacts of their designs. Home buyers who have been attracted to eye candy, such as fancy bathrooms, exotic kitchens and built-in entertainment centers, are now interested in the environmental and energy factors surrounding home ownership. “Green building” practices are showing up in home plans, so don’t be outdone by the early adopters.

That said, capitalists still influence residential markets and want to maximize their revenue and profits. Lenders who sell mortgages, suppliers who sell products, developers who convert raw land, builders who construct dwellings, real estate agents who sell them, utilities that provide fuels, and government agencies that tax them all want to see increasing results year after year. Many homeowners also benefit when rising prices boost their investment portfolios. The Energy Policy Act of 2005 provides new tax incentives for upgrades.

For tax years 2006 and 2007, a home builder or manufacturer may receive a $2,000 tax credit for new homes that are 50 percent more efficient than a home built to the International Energy Conservation Code (IECC) 2003 standard and with heating and air conditioning equipment meeting the minimum federal standards. The building envelope must account for one-fifth of the 50 percent.

Until now, all government efforts have been voluntary. Unless you are attuned to the pending changes, there may be no warning until your competitors are well established. It may be time to find where your residential customers are going and run around to get in front of them.

More efficient products

One of the longest-running efforts to improve energy efficiency and environmental impacts of residential designs is the Energy Star program run by the Environmental Protection Agency (EPA). Working closely with the manufacturers of energy-consuming appliances, the EPA has been successful in upgrading the efficiency of windows, lighting products, washers, dryers, refrigerators, heating and cooling systems, and others.

Appliances meeting the stringent standards are licensed and labeled with the Energy Star logo. Builders who install them assure homebuyers they are getting the latest technology in reducing home-energy demands.

The EPA quoted Jim Pierobon of Silver Spring, Md., who said, “I chose an Energy Star qualified refrigerator, vinyl windows and dishwasher and heat pump recently because, one, I expect energy prices to go up, two, I want energy-efficient products that will more than recover the added cost within a few years, and three, I want to put my money where my mouth is about reducing electric power demand and with that fewer greenhouse gas emissions from regional coal-fired power plants.”

Recently, the EPA program was expanded to include Energy Star home labeling. According to the EPA, “Energy Star qualified homes are independently verified to be at least 30 percent more energy efficient than homes built to the 1993 national Model Energy Code (MEC) or 15 percent more efficient than state energy codes, whichever is more rigorous. These savings are based on heating, cooling and hot water energy use and are typically achieved through a combination of [the following]:

  • Building envelope upgrades
  • High-performance windows
  • Controlled air infiltration
  • Upgraded heating and air conditioning systems
  • Tight duct systems and
  • Upgraded water-heating equipment.”

In order to meet Energy Star home rating requirements, a builder must submit the plans to an independent home energy rater for review. Raters input information from the plans into specially designed computer simulation programs that estimate the annual energy use of both the house design and the Model Energy Code (MEC)-based reference house.

With this information, the home energy rating score (HERS) provider can determine a projected rating on a scale of 100. The rater can then make recommendations to the builder on construction practices to reach the Energy Star level. Once the home is built, the home energy rater performs a final inspection and tests the whole house. Results of these tests are entered into a computer simulation program to estimate the annual energy use of both the house being rated and the MEC-based reference house.

Some mortgage lenders are recognizing the benefits of Energy Star homes by offering lower interest rates and other incentives to buyers who might not otherwise qualify for such financing. Lists of Energy Star partners, including products, builders, utilities and lenders are linked at the Web site at

Government codes and standards

More than 40 states and Puerto Rico have adopted some form of energy code for residential building. Some of them are accompanied by financial incentives for compliance or penalties for avoidance. Example: Arlington County, Va., assesses builders a fee of three cents per square foot on projects that do not seek LEED certification.

The MEC, published and maintained by the International Code Council (ICC) as the IECC, contains energy-efficiency criteria for new residential and commercial buildings and additions to existing buildings. States adopt the MEC or IECC as they revise and update their codes. These codes are coordinated through the Building Energy Codes program of the U.S. Department of Energy (DOE).

DOE states on its Web site,, that “DOE’s Building Energy Codes Program is an information resource on national model energy codes. We work with other government agencies, state and local jurisdictions, national code organizations, and industry to promote stronger building energy codes and help states adopt, implement, and enforce those codes.”

Energy code implementation can take either a prescriptive or a performance approach. The former is specific and permits few variations, while the latter encourages more creative trade-offs.

For example, DOE states on the Web site: “A trade-off approach allows you to trade enhanced energy efficiency in one component against decreased energy efficiency in another component. You can, for example, trade decreased wall efficiency (lower R-value) for increased window efficiency (lower U-factor), or increase the roof insulation and reduce or eliminate slab-edge insulation. Typically, this method is less restrictive than prescriptive approaches because components that exceed the requirements can compensate for those that do not meet the code.”

Voluntary compliance

In 2003, the National Association of Home Builders (NAHB) approved a resolution supporting green home building. The NAHB Research Center worked together in an open, public process with more than 60 Stakeholder Group members to create official guidelines issued in 2005. The guidelines contain six primary sections:

  • Lot preparation and landscaping
  • Resource efficiency
  • Energy efficiency
  • Water efficiency/conservation
  • Occupancy comfort and indoor environmental quality
  • Homeowner education

Local homebuilder associations (HBAs) are given a user guide with additional information and guidance on ways to customize the guidelines to accommodate local conditions, and NAHB is conducting a national training program for designers. Each year, the NAHB issues energy value housing awards to builders honored in affordable, custom, factory-built, production, and multifamily categories for hot, moderate and cold climate regions.

Using renewable energy from the sun, energy-efficient building design and high-efficiency equipment, a demonstration “Zero Energy House” was developed by the NAHB Research Center and John Wesley Miller Companies-—resulting in a net zero energy bill over a year.

In 2005, the U.S. Green Building Council (USGBC) expanded its voluntary program of Leadership in Energy and Environmental Design with the LEED-H program for residential construction. Unlike its central administration of LEED for commercial buildings, USGBC will administer this program through regional agencies chartered for implementation and verification. (For more information on LEED-H, see “Residential-Specific LEED” on page 78.)

The USGBC has selected 12 LEED for Homes Providers to service some of the country’s leading housing markets in a pilot program. The pilot program will be completed in 2006 for roll out in 2007. USGBC said on its Web site, “These Providers are local and regional organizations that have been chosen to provide technical, marketing and verification support to builders. They have demonstrated outstanding abilities and have a proven record of supporting builders in the construction of high performance, sustainable homes. Only these select Providers will be eligible to work with the builders in the delivery of LEED for Homes during this first phase of the pilot.”

Another private compliance move is by The Residential Energy Services Networks (RESNET), which is supported by lending organizations and state energy offices. It was organized “to improve the energy efficiency of the nation’s housing stock and to qualify more families for home ownership by expanding the national availability of mortgage financing options and home energy ratings,” states the Web site,

The National Association of State Energy Officials (NASEO) and RESNET have developed a joint accreditation standard for home energy rating systems.

The rise of “home energy rating providers” and new software packages that make residential energy code compliance into a measurable science implemented by “certified home energy raters” could revolutionize homebuilding. Watch for more residential energy updates that are sure to follow in Electrical Contractor magazine.    EC

TAGLIAFERRE is proprietor of C-E-C Group. He may be reached at 703.321.9268 or [email protected].



About The Author

Lewis Tagliaferre is proprietor of C-E-C Group. He may be reached at 703.321.9268 or [email protected].





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