Energy Audits are the High Road

When we have a choice to make, taking the high road means choosing the honorable or ethical course over some lesser alternative. In terms of housing efficiency, Nevada has a choice to promote an ethical path toward increased home energy efficiency and savings, or to maintain the dismal and expensive status quo.

I’m referring to legislation passed in 2007 to require a professional home energy audit whenever an older home is sold in Nevada. The requirement could be waived if both seller and buyer agreed to do so. To allow time for the industry to prepare, the activation date was set for January of 2011. I won’t bore you with the torturous details, but the bottom line is that due to opposition from industry trade groups, primarily the Nevada Association of Realtors, it may not happen. This would be a tragic outcome for the citizens of Nevada.

Home energy audits provide the key to reducing energy consumption, improving the environment, increasing home comfort and establishing an honest real estate market that acknowledges the true value of home performance. Energy costs are a significant part of a home’s operating budget, yet home performance is rarely a factor in the buying decision. When looking for a home, a prospective buyer will find more information about granite countertops and fake fireplaces than energy consumption.

It’s all about education. The so-called “free market” has not led to a solution since even in the best of times the industry has not acknowledged the true value of energy efficiency. That’s why wise legislators passed the law and it’s why we need corresponding regulations that meet their intent.

For those lucky enough to find a good, high-performance home, there are additional hurdles to overcome. Typically, most realtors, appraisers and lenders are not well-versed on the unique benefits and true value of such homes. Current practices tend to focus on square footage, number of bathrooms and cosmetic amenities. This represents a gross distortion of the market since high-performance homes have significant intrinsic value representing real dollars. Why should they not be represented, appraised and funded accordingly? With a home energy audit at the time of every sale, our existing housing stock will have a mechanism to improve over time and help prospective buyers make decisions based on the real cost of home ownership.

It’s all about education. The so-called “free market” has not led to a solution since even in the best of times the industry has not acknowledged the true value of energy efficiency. That’s why wise legislators passed the law and it’s why we need corresponding regulations that meet their intent.

One early objection by the real estate industry was that there were no qualified auditors to get the job done. That is no longer the case. In response to the passing of the original bill three years ago, an entire home-performance industry continues to form. The Nevada Building Performance Professionals (NBPP) represents many of the newly-formed small businesses that will provide the services required to meet the demand for detailed, accurate audits. They are aligned with nationally-accepted organizations and testing standards like the Residential Energy Services Network (RESNET), the Building Performance Institute (BPI), the Home Energy Rating System Program (HERS) and Home Performance with Energy Star (HPwES). These local companies are poised to create new jobs, stimulate Nevada’s economy and help all residents maintain reasonable energy bills.

There is no acceptable alternative for these services. A HERS rating is a simple number that is the equivalent to the MPG rating of a car, but the accompanying detailed energy audit report provides specific information to help the homeowner select the most cost-effective improvements. Nevada now even has its own auditor training programs. Additional programs have been created to make the auditing and improvement process easy to do and more affordable. Check out the City of Las Vegas’ Energy Efficiency site or the HomeFree Nevada program for some examples.

The decision to implement a strong audit requirement or a watered-down, ineffective alternative is in the domain of the Nevada Renewable Energy and Energy Efficiency Authority. A workshop will be held November 16, 2010 at 1:30 PM. Details of the workshop and the entire process, including an excellent report on the value of home energy audits are posted below.

The auto industry once opposed requirements for seat belts but no one in their right mind now drives without them. Proper energy audits are like seat belts for homeowners. Awareness of home energy efficiency is crucial to the future of our state. We must choose the high road. The ethical choice of meaningful energy audits will lead to a stronger, greener and more independent Nevada.


Additional Resources:

  • Upcoming home energy audit hearing:
    • Notice of Regulation Hearing (November 29, 2010;1:30 pm) (PDF)
    • The purpose of the hearing is to solicit comments from interested persons on the regulations regarding establishing a program for evaluating the energy consumption of residential property in Nevada.
    • Note: The meeting is open to the public in both Carson City and Las Vegas (via teleconference).
  • Nevada Building Performance Professionals letter and attachments to the Nevada Renewable Energy and Energy Efficiency Authority. Read this to appreciate the detail and value of professional home energy audits. Note the positive cash flow from day one when energy efficiency improvement costs are rolled into a standard home mortgage. Includes:
    • Letter to the Commissioner
    • ATTACHMENT A: 2009 IECC Annual Energy Cost Compliance Report
    • ATTACHMENT B: Improvement Analysis, HERS Score, Emissions and Air Leakage Reports and a Home Performance with Energy Star (HPwES) Certificate, etc.
  • SWEEP is the SouthWest Energy Efficiency Project, strong advocates for home energy audits.
  • THE NEVADA ENERGY EFFICIENCY STORY: A Commentary by SWEEP for Legislators, January 2010 (PDF) (See page 4 for the section on Residential Energy Conservation.)
  • Point-of-Sale Efficiency Upgrades and Audit Requirements, HousingPolicy.org
  • More information on efficiency and renewables can be found on the GreenDream Resources page.

Intent of the Home Energy Efficiency Legislation

It is clear that the intent of the original legislation was to establish meaningful energy audits as tool to improve residential energy efficiency. Here are some excerpts from the minutes of the hearing on Senate Bill (S.B.) 437 on March 29, 2007 (various speakers):

“The average American spends about $1,300 a year on home energy, and the efficiencies proposed in this bill can cut around $400 of that.”

“One of the goals of this bill is to help the public, through energy audit, understand how efficient they are, and what they can do to control their own energy costs.”

“Energy audits are extremely constructive and positive.”

“…the energy office drafted these regulations so individuals will have a rating.”

“They do not have to do it [efficiency improvements], that is their business. The new person who buys does not have to do it, and the old person does not have to do it. They need to be aware of it. That is the prime goal of what we wanted to accomplish by letting them know what is out there… we are hoping to educate people to the deficiencies they can correct.”

“The Realtor told me what would positively sell the house was the school district where I was located. All the families that put in bids did not have children and the person bought the house because it was energy efficient, had a small solar system and they liked the permaculture or xeriscape landscaping which used little water. Based on my experience, you are on the right track.”

“There is such great potential. We need to seize the moment.”

Comments by Mayor Will Wynn regarding similar legislation passed in Austin, TX:

“As you know, we face a rapidly changing energy future. If you like what’s happening with gas prices right now, then you’re going to love what happens with the cost of electricity over the next few years. Make no mistake: powering our homes and buildings is going to get more expensive, perhaps dramatically. Right now, we have an opportunity to get in front of it.

“This matters to you whether you know it or not, because we all share in the cost of wasted electricity. It forces us to make expensive power purchases on the energy markets during the heat of summer, and brings us closer to the day when we would need to build expensive new power plants. This drives up electric rates for everyone, not just those who are wasting energy.”

Hard sell: From environmentalists to builders, many say statewide home energy audits could soothe our ailing housing market — so why are Nevada realtors fighting the new standards? by Jason Whited, CityLife

For the past several years, an unlikely alliance of builders, environmentalists and state lawmakers has developed what they’ve called a winning solution: required energy audits on the sale of each new home in the state. By the time new state requirements governing these inspections take effect next January, experts said, the audit requirements — initially passed by the Legislature in 2007 and updated by state lawmakers in 2009 — could help establish entirely new selling points for the tens of thousands of homes still standing empty. Yet, as these interest groups, policy experts and businessmen work feverishly with state energy officials to flesh out energy audit standards in advance of the 2011 deadline, many among this ad hoc, green consortium complain that local realtors are pushing back hard, slowing the possible transformation of Las Vegas from an anemic residential market into a robust, energy-efficient money maker.

Read the full article.

Comments

  1. Steve–many in the real estate community in Austin, TX have come around on the mandatory audits question, despite their initial opposition. You might be interested in this guest post on Energy Circle by one realtor who changed from being initially opposed: http://www.energycircle.com/blog/2009/07/23/mandatory-energy-audits-yes-and-make-them-matter-a-realtor-speaks

    It’s been big positive there, and has had the additional effect of educating people on the value of energy audits in way that’s unprecedented across the country IMO. The result is an energy efficiency contracting sector that’s the most vibrant in the country.

    Let’s hope NV can stand up for this law.

  2. Thanks for the link Peter – good article. It really is an educational issue first and foremost.

    Like most, Nevadan’s want to move forward with efficiency, renewable energy and an improving economy. They all come together in the form of meaningful energy audits.

  3. Sue Cagliano says:

    Wonderful read, and excellent points. Thanks.