New era: Home buyers tune into Energy Star

Following the recent upswing in utility costs, many consumers have added energy efficiency to their list of must-haves in their new homes.

"The environment of a new home is becoming very important to new-home buyers," said Philip Mestler, an energy efficiency rater with ConSol. "It used to be that buyers were more interested in upgrading their counter tops or flooring. Now they are becoming more savvy and interested in upgrading their homes' energy efficiency, too. Some builders are recognizing this and are now offering it as a standard feature in their homes."

One way of determining a home's level of efficiency is if it carries the Energy Star label.

Sam Rashkin, the Environmental Protection Agency's National Director of Energy Star for Homes, said such homes use at least 30 percent less energy for heating, cooling and water heating than a standard home based on the Model Energy Code. The home's efficiency is verified by a third-party certified rater, such as ConSol or Builders Choice.

"What is upgraded in a home to make it Energy Star depends on the home's design and the builder," Jill Gilmore, president of Builders Choice, said. "Some builders construct rather efficient homes to start with and only need to make a few upgrades to make it Energy Star.

"The materials used in an Energy Star home are not as important as how the materials are used. It is important that the contractors and subcontractors install the materials in the proper way in order to offer energy efficiency."

Rashkin said the EPA provides guidelines, not a standard blueprint, for what constitutes an Energy Star home.

"The program offers some flexibility for builders, but basically you find that Energy Star labeled homes are tightly constructed with few drafts or air leakage, high performance windows that are more effective in blocking out the sun, efficient equipment, and air ducts that are rather tight," he said.

"The air ducts in the average home can leak about 20 to 30 percent. The ducts in Energy Star homes are ... not allowed to leak more than 6 percent, and many of our homes test below 3 percent. If air leaks from a home's ducts, that compromises not only efficiency, but also the home's comfort and air quality. If the wall systems leak, on windy days the dust and wind will blow through the home and compromise its air quality ... If the windows are not low-e (low-emissivity), the sun's rays get through and can fade carpets and upholstery.

"We're talking about comfort, indoor air quality and durability," he said. "Laws of physics tell you that you are going to get a better house from Energy Star than from a standard home."

The program was established in 1995, and home builders participate voluntarily. Nationwide, about 1,000 builders, including several in the Las Vegas area, have signed on. Local builders include Astoria Homes, Beazer Homes, Concordia Homes, Hearthstone Homebuilders, John Laing Homes, KB Home, Pardee Homes, Perma-Bilt Homes and Pulte Homes.

According to Rashkin, the program has gained steam recently, with about 13,500 of the 38,000 homes produced nationwide selling in the past year. About 3,000 have been constructed in the valley.

Pulte, one of the first builders to join, offers Energy Star homes at all of its Las Vegas Valley neighborhoods.

"When we began, we already knew that we offered energy-efficient features in our homes, but people weren't buying the individual items," Dave Beck, vice president of construction, said.

"What we did was take a systems engineering approach at home construction by taking a look at how the different components interrelate with each other. We looked at the homes' thermal envelope, which is the area where the home is insulated, and areas of heat loss and heat gain through duct work and windows.

"... All of the duct work in homes in Las Vegas is located in the attic, which is usually unconditioned space. We changed the insulation of our homes to go up the roof line so that in the attic there is not as large of a differential as there would be in the outdoor air ... As a result, you don't have to have an oversized duct system when it is located in the thermal envelope and there is not as much cooling or heating loss."

Pardee offers Energy Star homes at seven of its neighborhoods in the Las Vegas Valley, according to Joyce Mason, vice president of marketing for the builder.

"A central point in our energy-efficiency features is spectrally selective glass, which is also known as low-e glass. It keeps out 70 percent of the UV rays. It (also) keeps the higher temperatures out of the home ... We also focus on sealed duct work, which reduces air leakage from the ducts," Mason said.

"By doing these two things -- spectrally selective glass and the sealed duct system -- our homes do not require as high of a tonnage of air-conditioning and heating units. The lower the tonnage, the lower the cost for homeowners."

Beck said that an Energy Star home's initial higher cost is outweighed by the return to the owner.

"In our total construction, we maybe spend $800 to $1,000 more in a home, but we choose to look at it not as a cost factor but rather a value factor for our homeowners," he said.

"We've added probably $5,000 in value to the home because even though it adds costs upfront, it adds value in the long run because of the lower electric and gas bills. That initial investment might have a payback in as short as two or three years in utility savings."

By purchasing an Energy Star home, the buyer may also qualify for an energy-efficient mortgage, according to Rashkin.

With these loans, he said some lenders will incorporate the projected savings in utility costs into the maximum housing expense, which is used to determine how much a buyer can borrow, thus enabling the buyer to purchase a more expensive home.

"Energy-efficient mortgages increase the buying power," Rashkin said. "... Basically, the bank adds the monthly amount of what will be saved in energy bills so you can buy more house ... The bank likes that because they have a buyer with a higher disposable income, and a home with a greater selling value."

Rashkin said that other designations exist for energy-efficient homes, but typically those programs are for-profit operations, meaning that a builder uses a particular insulation or a certain energy-rating service.

"Energy Star is a government-backed label and it tells consumers that when they see this label, that the homes are truly energy efficient and they meet high standards. There are no other products or services attached," he said.

"The nice thing about Energy Star is that a lot of these products and terms are rather scientific and it can be overwhelming to a consumer trying to figure it all out. By looking for the Energy Star ... label, it makes it so much easier to buy an energy-efficient home than to learn all of those terms and concepts."

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