Home Energy Ratings for Real Estate Agents in North Carolina

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1 ENERGY STAR For Real Estate Agents and Appraisers North Carolina ENERGY STAR Conference December 8, 2005 Steve Baden Executive Director

2 Home Energy Ratings Are Voluntary Accredited Rating Programs in all 50 States Over 2,000 Raters Certified Across U.S.

3 National Home Energy Rating Standards Rating Program Administration Technical Guidelines Rater Training and Certification

4 What Are Ratings Used For? Energy Efficient Mortgages ENERGY STAR Home labeling Performance option for energy code compliance in 16 states Federal tax credits

5 ENERGY STAR Homes Voluntary Program of Environmental Protection Agency to Reduce Carbon Emissions Considers all energy uses of home (heating, cooling, water heating, lighting, appliances, on-site energy production Requires ratings following RESNET s standards

6 RESNET Standards Quality Assurance Mandatory rater financial disclosure Rating Code of Ethics Rating Standards of Practice 10% review of electronic data files 1% field quality assurance review

7 RESNET Standards Rater Certification Accreditation of rater training institutions Energy rater knowledge base and skills set Definition of minimum rater competencies National on-line rater test

8 RESNET Standards Technical Standard Establishes technical procedures and methods Creates minimum reporting requirements Specifies Reference Home characteristics Sets minimum software tool requirements

9 Need to Shift Thinking to Optimized Systems Engineering Most Builders Rely on Compliance With Minimum Prescriptive Codes This results in: - Missing Integrated Solutions That Address System Interactions Optimized System Strategies Will Result in: Higher Levels of Energy Efficiency Efficient Use of Resources Greater Durability Improved Comfort Greater Long Term Value to Consumer

10 Emerging Trend Building Performance Shift From Minimum Compliance to Optimal Performance Move to Consideration of Whole House Energy Use

11 Building Performance Advantages + Recognizes and Rewards Innovation + Gives Builder Greatest Flexibility to Incorporate Most Cost Effective Features That Makes Most Sense in the Local Housing Market + Construction Savings More Than Makes Up for Cost of Verification

12 Performance Method Where Viable Option Builders Will Choose Performance 2004 ENERGY STAR Homes Verification (131,763 Homes) 93% Performance Based (HERS) 7% Prescriptive Based Source: Environmental Protection Agency

13 Building Performance Will Now Become More Attractive To Builders Alignment Between (HERS) and Chapter 4 of the IEEC 2004 Supplement Dynamic Growth in ENERGY STAR Homes and Home Energy Ratings Ratings Most Practical Tool for Performance Compliance Documentation (Accredited Rating Programs in 50 States) Potential Federal Tax Credit for Energy Efficient Homes That is Performance Base and Based Upon the IECC

14 Energy Efficiency and the Appraisal Traditionally Appraised Value Has Not Reflected Economic Benefit of Energy Efficient Home

15 Appraisals Have Not Valued Energy Efficiency Why? + Most Efficient Features of Home Not Visible + No Third Party Technically Credible Method of Verifying a Home s Energy Performance + Hard to Locate Comparables

16 New Trend + Market Penetration of ENERGY STAR Homes + National Third Party Technically Credible Method of Verifying a Home s Energy Performance Home Energy Rating + Easier to Locate Comparables

17 Example of New Trend Melrose, Florida Darty Appraisal Service reports added net value of $4,000 for ENERGY STAR rated homes The value was added because the energy rating determined that the ENERGY STAR upgrade would save approximately $40 per month in utility costs while adding only $20 per month in added mortgage costs.

18 Still Nationally Appraisals Are Not Recognizing Economic Vale of Efficient Homes Reason Why Mortgage Industry Created Energy Efficient Mortgages

19 Energy Mortgages Increases the Home Buying Power of Consumers and Their Home s Equity Energy Improvement Mortgage Finances the Energy Upgrade of an Existing Home in the Mortgage Loan Using the Monthly Energy Savings Energy Efficient Mortgage Uses Energy Savings of Efficient Home to Increase the Consumer s Buying Power Capitalizes Energy Savings in the Appraisal

20 Benefits of ENERGY STAR & Ratings to Real Estate Agents Increases the Home Buying Power of Consumers and Their Home s Equity Energy Improvement Mortgage Finances the Energy Upgrade of an Existing Home in the Mortgage Loan Using the Monthly Energy Savings Energy Efficient Mortgage Uses Energy Savings of Efficient Home to Increase the Consumer s Buying Power Capitalizes Energy Savings in the Appraisal

21 Benefits of ENERGY STAR/Home Energy Ratings to Real Estate Agents Larger Pool of Potential Buyers Who Can Afford More of a Home Present Information on Energy Performance of Home in Easily Understandable Terms Easy to Market the High Performance of Home through EPA Label (Third party verified) Take Advantage of Emerging Green Market and Concerns over High Heating Costs

22 Tools for Marketing ENERGY STAR Homes ENERGY STAR Resources Sales Tool Kit Marketing and Sales Promotion Sample Ads Point of Purchase Marketing Materials Builder Publicity Kits

23 Comprehensive Review of Enhancements to ENERGY STAR & Rating Standards Federal Tax Credits

24 Thank You

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