The Green Home Movement: Craig Foley at TEDxSomerville

Craig Foley is the Chief of Energy Solutions for RE/MAX Leading Edge, and a co-founder of inCharge Energy. Craig is also the author of the first report on hi...

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Comment by Craig Foley on June 5, 2014 at 3:44pm

Hi James, thanks for your kind words.

Before I answer the question about the market value of distributed generation and EE improvements, I think it's worth talking about some of the challenges my industry faces in addressing these issues. it is not uncommon for the average agent to answer the question with a quick roll of their eyes and a under the breath "There is no value" response. That kind of response is fairly common here in MA, but I am guessing it is true throughout the U.S. The response is understandable when you consider we are in the midst of an energy paradigm shift; assumptions about how we produce and consume energy are rapidly changing. Terms/acronyms like solar PV, ASHP, PPA, AFUE, HERS rating, energy performance scores take traditional agents/brokers out of their comfort zones. The natural reaction for many is a derogatory statement involving the word "green." That's too bad; it holds back market transformation because of short term thinking and insecurity. If a buyer or seller hears a RE agent reply like that, my advice is run in a different direction as soon as possible.

The general rule of thumb is that for each dollar saved by EE improvements it equates to roughly a $15-20 value at the time of sale. When I investigated this issue in the MA market in 2012, I found this to be in line. I work for a large RE firm in MA that had 12 offices in the Greater Boston area at that time. Hearing complaints from several of the agents in our offices that buyers didn't want to buy homes heated with oil I investigated. Given that the EIA projected that the average home heated with oil would cost the homeowner $2553, and that the average homeowner that heated there home with NG would cost $1007 for the 2012-2013 heating season, I wanted to see if there was a price premium buyers were paying for homes heated with NG. After studying all the homes that sold in 2012 in our 12 communities I found that there was an $11 per sq ft price premium for homes heated with NG. For a 2000 sq ft home this equates to a $22,000 premium. Using the $1500 delta between oil and NG, that equates to for everyone dollar saved in the NG home it equated to $14.67 of value.

Comment by James White on June 5, 2014 at 3:01pm

Very well done presentation Craig.  Definitely worth watching.  I like your statement that we each have both an opportunity and an obligation to reduce our energy consumption.  It would be interesting to hear from a realtor's perspective how much value was added by the energy efficiency improvements and distributed generation system installed at the home you mentioned.

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