In the spring of 2018, the City and County of Denver’s Department of Public Health and the Environment launched a home energy label pilot program using the U.S. Department of Energy’s Home Energy ScoreTM to generate the label. The pilot program sought to understand whether receiving an energy label during the transaction of a home could increase energy efficiency in single-family residential buildings in Denver. Denver was also interested in understanding whether an energy label would be helpful in meeting some of the residential sector goals laid out in Denver’s 80×50 Climate Action Plan.
The pilot program will continue to run through the end of 2019 and the intent of this analysis, which was conducted in late fall 2019, is to understand the impacts of the pilot and identify if and how Denver can use a home energy label to support greater residential energy efficiency. Specifically, this analysis seeks to answer the following questions:
A. Does sharing an energy label around the transaction motivate efficiency investments sooner with sellers, buyers and/or new owners?
B. Does sharing the Score with sellers, buyers, or new owners result in energy savings?
C. What are the opportunities and challenges related to using the Score as a tool to encourage energy efficiency?
D. Is the Score the right tool for Denver to encourage residential energy efficiency?
E. What are the next steps for Denver regarding energy labels?
Links to the full report and Executive Summary can also be accessed at www.Denvergov.org/HomeEnergy.
2 metrics that HES delivers (estimates) are energy use and carbon emissions associated with the house. Just raising awareness of these with homeowners, shoppers, buyers is a giant step.
The report doesn't mention that questions/comments re: carbon emissions were included in user response surveys. This would be interesting!
Here's what I know about this issue of educating and incentivizing homeowners to spend money on saving home energy.
The average home inspection report recommends about $5,000 to $12,000 of home improvement, repair and replacement recommendations. The average new homeowner spends $8,000 in the first year after moving into their home. Home inspectors sit at the kitchen table with about 5,000,000 new homeowners each year and spend several hours talking about their homes. That's $40,000,000,000 (billion with a 'b') of home improvement work being influenced by home inspectors every year.
The home inspector already has the trust of the homeowner. Contractors? Not so much. So, if you want to leverage what already exists to reach millions of homeowners who have their wallets open, ready to spend thousands of dollars on home improvements, I recommend supporting the home inspection industry. Every contractor should get to know five local certified home inspectors and develop a cooperative relationship.
Home inspectors are about 8 to 14 months upstream of any home improvement contractor. By the time the energy contractor gets to speak with the homeowner, the interest to spend any more money on home improvements is gone.
Leverage what already exists.
Ben Gromicko, InterNACHI
Hi Ben! Thanks for the input. Does InterNACHI have a position on whether or not they believe home inspections should be required at time of list or sale? Our pilot explored whether or not an energy label should be required and while we did not land on a definitive answer, participants overwhelmingly shared that they want this kind of information in the listing which says a lot. To me, there still seems to be gap in what we are trying to accomplish when it comes to consumer protection and I wonder if required inspections plays a bigger role versus separating out energy.
Oh, I would love to see home inspections required for every real estate transaction. ;) But that's not going to happen.
What does happen is about 5,000,000 existing home sales every year, and most of them are inspected during a real estate transaction by a certified home inspector. Consumers demand that type of house inspection. Consumers like house energy information. Sure. Especially if it's free information. But they're unwilling to pay for a home energy inspection or home energy audit.
What could be piloted is having a Home Energy Score Assessor accompany a Certified Home Inspector at the time of a home inspection. The trusted home inspector could introduce the local home energy advisor to the new homeowner face-to-face. That's what I recommend in connecting the dots, passing the baton, and spurring this good effort to educate homeowners on home energy upgrades.
Leverage what exists -- a house inspector who's earned the trust of a homeowner who's about to spend a lot of money on home improvements without any regard to energy upgrades. This is a great opportunity for home energy professionals.
I definitely agree with this when inspections or audits/energy scores are voluntary, though many cities are exploring disclosure policies related to some type of energy label (Home Energy Score or other) and Time of List seems to be most commonly supported primarily to inform the entire process rather than being shared after the home is under contract or purchased. I know pre-inspections happen but as I understand it, they aren't as common (correct?) and so the inspector isn't involved until the house is under contract which makes it difficult to connect the two.
Our pilot really tried to leverage the fact that Inspectors are already in the home, working with the customer and realtor, so it seemed to make sense that the score be offered at that time. However, feedback from these participants showed that many wished this type of energy info was with the listing rather than finding it out later.
Yes, most home inspections (5M/yr) take place when the buyer's offer to purchase a home is accepted by the seller. The home energy score could take place at that time.
Providing information about saving home energy to the seller (at the time near the listing of the property for sale) would be worthless. No seller would ever invest significant money in a home that they're leaving.
I've been unsuccessful at explaining this well enough to stakeholders and the Home Energy Score Team. So, we're planning on releasing in 2020 our own home energy score report. Here's what we've developed so far for home inspector to use: https://www.nachi.org/home-energy-inspection.htm
Thanks for sharing, I will check it out!
And I agree as well that in a seller's market you won't get the seller to invest, but having an energy label about the home's operating costs informs the buyer before they put in an offer. In an ideal scenario all homes listed would have this information so it can start to be factored into what buyers prioritize since operating costs aren't commonly featured with listings but certainly add up. I go back and forth on the timing (time of list or sale) because we also heard from participants in our pilot that they view energy efficiency as something they can fix, versus the school district for instance. So while we'd like to think that simply knowing leads to action, every situation is different and it doesn't necessarily mean that the new homeowner will spend thousands right away. If they only plan to be in the home a few years it would also factor into whether or not they deem energy efficiency investments a priority.
Ben, do you have any other details about when this goes live or any data to suggest what kind of adoption you're expecting in the first year? Obviously it would take a while to build up, but I'd love to hear more about where you're going with this.