energy efficiency in the housing market
TRANSCRIPT
Energy Efficiency in the Housing Market
NAR ResearchArun Barman
Overview
• Putting residential energy consumption in perspective
• Review of home buyers preferences in terms of energy efficiency
• Differences in energy usage– Age and size of homes– Regional variation
• Factors affecting implementation of upgrades– Home values and expected tenure– Payback period– Government tax incentives
Residential Energy Consumption in Perspective
Residen-tial 22%
Commercial 19%
Industrial30%
Transportation29%
Source: Energy Information Administration / Annual Energy Review 2009
Home Buyer Preferences
Source: NAR 2010 Profile of Home Buyers and Sellers
Heating and cooling costs
Energy efficient appliances
Energy efficient lighting
Landscaping for energy conservation
Environmentally friendly community features
0% 20% 40% 60% 80% 100%
39
24%
24%
10%
10%
49
47%
45%
39%
41%
12
29%
31%
51%
49%
Importance of Home's Environmentally Friendly Features
Very Important Somewhat Important Not Important
Energy efficiency per square foot better for newer homes, but homes are getting bigger
Source: 2005 Residential Energy Consumption Survey
Before 1940
1940 to 1940
1950 to 1959
1960 to 1969
1970 to 1979
1980 to 1989
1990 to 1999
2000 to 2005
1,500
1,700
1,900
2,100
2,300
2,500
2,700
2,900
$0.50
$0.55
$0.60
$0.65
$0.70
$0.75
$0.80
$0.85
$0.90
$0.95
Size of Home vs. Energy Cost Per Sq. Ft
Square Feet per Home Energy Expenditures per sq ft
Av
era
ge
Siz
e o
f H
om
e in
Sq
ua
re F
ee
t
Ye
arl
y E
ne
rgy
Co
st
Pe
r S
qu
are
Fo
ot
Regional Variations in Energy Consumption
New E
ngla
nd
Mid
dle
Atlant
ic
East N
orth
Cen
tral
Wes
t Nor
th C
entra
l
South
Atla
ntic
East S
outh
Cen
tral
Wes
t Sou
th C
entra
l
Mou
ntai
n
Pacific
0
20
40
60
80
100
120
140
All End Uses
Mill
ion
s B
tu o
f c
on
su
mp
tio
n p
er
ho
us
eh
old
Source: 2005 Residential Energy Consumption Survey
Share of annual energy expenditures spent on heating and air-conditioning by region
Space Heating (Major Fuels) Air-Conditioning0
5
10
15
20
25
30
35
40
4541%
7%
37%
8%
19%23%
21%
14%
Northeast Midwest South West
Per
cen
tag
e
Source: 2005 Residential Energy Consumption Survey
Annual Energy Costs Per Year
Source: 2005 Residential Energy Consumption Survey
Annual Energy Spending: Top Four States
Source: 2005 Residential Energy Consumption Survey
All End Uses Space Heating (Major Fuels)
Air-Conditioning$0
$500
$1,000
$1,500
$2,000
$2,500 $2,409
$995
$197
$2,051
$213
$636
$1,806
$609
$216
$1,681
$87
$597
$1,396
$208 $177
Four Most Populous States
New York Texas All Other StatesFlorida California
Does it make sense to retrofit homes?
• According to the Profile of Home Buyers and Sellers (2010), the median tenure of sellers was 8 years.
• The decision to upgrade has several components– Piece of mind (satisfaction people have from being
environmentally friendly)– Savings while occupying the home (if the payback
period for the upgrade is less than the anticipated tenure in the home)
– Resale value (some upgrades may have a higher resale premium than others, though more research is needed in this area)
Payback period
Added cost of upgrade = Payback period in years
Estimated savings per year
Sample payback periods Northeast
Added Cost Savings ($/yr) Payback in yearsNortheastProgrammable Thermostat $115 $183 0.6Heating System Tune-up $96 $122 0.8Seal Duct Leaks $443 $311 1.4Windows and Skylights $744 $341 2.2Insulate Ceilings $643 $268 2.4Insulate Ducts $443 $183 2.4Insulate Walls $731 $305 2.4Seal Air Leaks $554 $213 2.6Water Heater Replacement $132 $37 3.6Furnace Replacement $1,145 $293 3.9
Source: Energy Efficient Rehab Advisor
Compare that to the West region
Added Cost Savings ($/yr) Payback in yearsWestHeating and Cooling System Tune-up $96 $125 0.8Programmable Thermostat $115 $109 1.1Electric Heat Pump $773 $152 5.1Seal Duct Leaks $443 $67 6.6Seal Air Leaks $554 $59 9.5Windows and Skylights $1,546 $126 12.3Insulate Ceilings $975 $50 19.4
Source: Energy Efficient Rehab Advisor
Sample Payback periods for retrofits
Northea
st
Centra
l
North C
entra
l
Southwes
t
Southea
st
Wes
t0
1
2
3
4
5
6
7
8
9
10
0.6 0.6 0.6 0.5 0.8 0.8
2.6
1.3
2.4 2.3
8.4
9.5
Programmable Thermostat Seal Air Leaks
Pa
yb
ac
k in
ye
ars
Source: Energy Efficient Rehab Advisor
Choice of “green” retrofits are not only made by consumers
• Geography and age of home matter• Government incentives
– Government rebates and tax credits for certain types of upgrades
• “Cash for appliances”
– Energy Star program
• Feasibility of projects– DIY Projects vs. Larger Projects (i.e. programmable
thermostat vs. window replacement)– Contractors who do green remodeling may or may
not be available at reasonable cost in your market area
Links and Contact Information
• For more information:– NAR Research (
http://www.realtor.org/research)• My email: [email protected]
– Department of Energy (http://www.eia.doe.gov/)
– American Housing Survey (http://www.census.gov/hhes/www/housing/ahs/ahs.html)
– Energy Efficient Rehab Advisor (http://www.rehabadvisor.pathnet.org/)