This page is an introduction to green real estate and how you can make an older home in the Phoenix-Scottsdale area more energy efficient.
Matthew Hoedt has been NAR Green and EcoBroker certified since 2011, and is a member of the Green REsource Council. Drawing on his knowledge and network of service providers, he can guide you to solutions that save you money, improve your home’s environment, and make good economic sense, regardless of a home’s age.
Why Does Energy Efficiency Matter?
When buyers consider cost of ownership, it’s usually about the mortgage, HOA fees, and perhaps the updates they’d like to do. Rarely does the cost of utilities enter the equation.
This can be a big surprise to buyers in Arizona, where the AC may be running five months of the year and their electric bills are 2-3 times what they were paying in cooler climates.
A typical older home will take a lot of energy to cool, and may never be truly comfortable in our summer heat. They usually have minimal insulation, leaky windows and doors, and inefficient air conditioning (HVAC). Add in the cost to run older appliances, pool pumps, and traditional lights, and the bills can really add up.
Homes built in the last decade tend to be more energy efficient. They offer better insulation, more efficient HVAC, energy star appliances, and windows that minimize solar & heat gain. However, you may not be able to find newer homes in the area you’d like to live, or their cost might be outside of your budget.
Home Energy Use
One of the questions we’re often asked is “how much will my utility bills be?”
There is no quick answer to this. Home energy use will depend on many factors such as:
- age of the home
- construction materials
- amount of insulation
- type of windows
- how well-sealed the home is
- age and efficiency of HVAC and appliances
- even which direction the home faces, to name just a few.
Metro Phoenix is located in the Sonoran Desert, so our winters are generally mild while our summers are hot with an average high of 105°. This means the bulk of our energy usage will be to cool rather than heat our homes. We want to keep heat from entering our homes in the first place.
Measuring Energy Efficiency
Since every home is different, one of the best tools to determine your actual energy usage and potential savings is a Home Energy Assessment. These fall into two categories:
- An Energy Star Home Performance Rating, performed by contractors certified by the Building Performance Institute. The contractors typically are able to complete some or all of the recommendations in their assessment.
- A HERS Rating (home energy rating system) performed by RESNET-accredited specialists. These are independent analysts and do not make any of the recommended improvements themselves. HERS ratings are typically required for Energy Efficient Mortgages.
HERS ratings are like miles per gallon for your house. A home built to 2006 standards gets a rating of 100, and the lower the number, the less energy a home uses. Typical older homes in the Phoenix area score 130, meaning they use 30% MORE energy than the current standard. Many homes built since 2012 already have a HERS rating that can be found at HERSIndex.com.
Both assessments examine how efficient the HVAC and appliances are, and what type of lighting is in use. Blower door tests measure how well-sealed the home is. Infrared scans map how much heat is entering through windows, doors, walls, and the ceiling. Water usage will be checked. Then you’ll received a list of recommended improvements.
If it’s an Energy Star Rating, the price and expected payback period of those improvements is included. You decide which – if any – make the most sense to you, and have the contractor compete them. Low-cost financing and rebates may be available, and we can help you find them. There is no obligation to complete any upgrades.
Both of Maricopa County’s utility companies (APS and SRP) currently sponsor the Energy Star Home Energy Checkup program. The cost of these tests is around $500, but with their sponsorship tests start at just $99 through their network of trained contractors.
To find out more or schedule an assessment, click on one of the links below, based on which utility company serves your home.
We are definitely fans of renewable, non-polluting energy sources like solar, wind and geothermal. If there’s one thing Arizona has an abundance of, it’s sunshine.
However, people are sometimes surprised when we tell them rooftop solar should be one of their last steps in going green, not the first.
Think of it this way. Let’s say your pool has a big leak, and water is pouring out faster than you can fill it. Do you call the city and have them install a bigger water main so you can fill the pool faster? Or do you fix the leak?
By implementing the home energy assessment items with the greatest impact on energy usage, you’re “fixing the leak.” If you add solar before reducing your usage, you’ll probably be paying for a much larger solar installation than you’d otherwise need. Plus, your energy dollars will still be flying out the window (literally).
Once you’ve made your house as energy efficient as is practical, that’s the time see if the cost and payback of rooftop solar makes sense.
One final note. Owned solar panels add value to a home, but leased solar panels actually REDUCE value. This is because a new buyer will have to qualify for the cost of the solar lease on top of their home loan, which isn’t always possible. And buyers may not be willing to take on the 15 to 20 year commitment that probably remains on the lease.
Offsetting the Cost of Upgrades
A great way to decrease the cost of green real estate solutions is through rebates and tax incentives. Some programs are available through the utility companies, and you’ll find them via the APS & SRP Energy Star Rating links above. The contractors who complete the work for these ratings may offer additional rebates and discounts of their own.
There may also be rebates and tax incentives available at the federal, state, and local level. These can be found in the Database of State Incentives for Renewables and Efficiency (DSIRE), and you can access the DSIRE website here.
Another way to offset the cost is by building it into your mortgage. Energy efficient mortgages are one of the most beneficial and under-utilized programs available. They are a cost-effective way to implement the recommendations outlined in an energy assessment.
An EEM can add energy-efficient upgrades costing 5-15% of a home’s appraised value to the principal of a new loan or a refinance, without affecting the loan-to-value ratio for the buyer.
You pay a bit more in principal and interest per month, but you may realize far more per month in energy savings. The costs and potential savings will be clearly documented. Most EEMs require a HERS energy rating on the home, as described above.
Want to find out more? Call or click here today to set up a free, no-obligation consultation, and let us go to work for you!
Matthew Hoedt holds the NAR Green designation and EcoBroker certification, and is a member of the Green REsource Council.