Making Green: Getting the Most from Your Energy Upgrades 

This is a guest blog by home energy consultant Erin Vaughan

If you ask most homeowners if they want a green home, chances are, they’ll say yes. We start with notions of protecting the environment, of using fewer resources and reducing our carbon footprint. Dig a little deeper though, and most consumers admit they have a fairly vague understanding of what home greening entails.

Indeed, 84 percent of surveyed homeowners couldn’t explain the concept of “high-performance” to a friend. But when the time comes to invest in a specific project, homeowners seek financially efficient upgrades, projects that increase both immediate savings and long term property value. And while there are no universally optimal solutions, industry experts have distilled a couple reliable bets in the race for home improvements.

Add Solar, Add Value (Even in the Short Term)

Many homeowners see the price estimates for a new solar system and stop short, but the long term energy savings—and the boost to home values—make solar one of the most profitable improvements on the market. The federal residential renewable energy tax credit, for instance, returns homeowners an instant 30 percent of their cost to install. In addition to that, many areas offer credits through statewide net energy metering programs, where utilities essentially pay residents for the energy they generate—or reduce their bills by the net amount. One analysis of California NEM credits show that state tariffs stand to save homeowners around $1,000 annually. Furthermore, several studies indicate that installing solar panels on a home adds a premium to the price when homeowners resell, compared to similar nonrenewable properties. For instance, a 2013 report by the Lawrence Berkeley National Laboratory found a $5,911 increase for every kilowatt panels went up in size. So a six-kilowatt unit—a common size for a residential single-family home—would add about $35,000 to $36,000 to the sale price. Another study conducted by the National Bureau of Economic Research estimated that increase to be around 3.5 percent, on average.

Of course, those studies were both performed on homes in California, which maintains the highest saturation of residential solar of any state in the country. The authors of the NBER study admit that location plays a huge part in the formula—their samples indicate that even in the Golden State, energy prices—as well as political persuasion—influence just how profitable a solar energy system is. That is, solar adds the most value in areas where electricity prices are high, in homes situated in neighborhoods with a large number of liberal voters. However, although location impacts the overall value, the massive increase in national residential solar panel sales shows that the public interest for renewable energy is there, which will only add to the value of solar homes in the upcoming years.

Insulate Your Investment

When it comes to lowering your energy bill, experts also found that insulation projects, particularly attic insulation, tend to be the most profitable. Attic insulation costs an average $1,343, with a reported value of $1,446, which is a return of around 107 percent. Meanwhile, the Department of Energy’s findings show a 5 to 16 percent estimated savings on energy bills from air sealing and insulating a home, depending on the location.

For instance, plugging up leaks around windows and doors, on attic floors and in the foundation may result in a net energy reduction of around 25 percent, if it’s done correctly. Meanwhile, insulating the attic floor to the proper R-value for the home’s region results in a 15 percent decrease in heating and cooling. That can be achieved using blown fiberglass or batt insulation, the most popular insulation materials. Or you can apply spray foam insulation (SPF)—although according to some experts, open-cell applications require additional rigid foam underneath the roof decking in order to be considered up-to-code. Insulation continues to be a controversial subject among residential contractors—you’ll hear varying opinions on which type is actually worth it’s cost. Neither high-density fiberglass or SPF insulation is cheap, exactly, but the closed-cell variety costs around $1.00 to $1.50 per square foot, while batt and roll fiberglass is more like $0.27 to $0.28. Opting for SPF may have an effect on your energy-efficiency—although there’s no clear consensus on that yet—but fiberglass rarely ever needs any maintenance, which keeps the payback high.

Get Third Party Certified

If you are looking to market your sustainability, try getting your home independently certified. According to realtors, a third-party certification instantly communicates the authenticity of energy-efficiency claims and their overall savings. One of the most recognized energy brands is the ENERGY STAR rating system, developed by the Environmental Protection Agency in 1995. There are few statistics available to support the actual increase in home prices with ENERGY STAR products; however studies performed in several metropolitan areas showed a 2 to 6 percent increase in price for homes where the owners invested in a range of energy efficient upgrades.

And what does the future hold? The price of solar has been consistently falling—the installed cost dropped nearly five percent in 2015, continuing a trend that’s been ongoing since the late 2000s. Last year, experts predicted that installed prices will fall to less than $1.00 per watt by 2020, making solar energy cost-competitive with conventional electricity sources, which will only improve its cost-to-value ratio. And there are other improvements on the horizon, as well. Tesla teamed up with PV-provider SolarCity and announced the release of a completely new product: the solar roof. Composed of molded glass, colored louvers, and solar cells, these PV-enabled products have an uncanny resemblance to today’s roofing materials. And Tesla has indicated that the price will stay competitive with a normal roof. In general, we should see solar getting a slicker and “cooler” branding update, which will make it all that much more appealing. And don’t underestimate the value of being an early adopter. In an industry that constantly innovates, it never hurts to be on the creative edge.


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