Energy Star: The New Home Source Interview

Energy Star, a program of the Environmental Protection Agency (EPA), has been around since 1992, but many Americans associate it with products like TVs and dishwashers.

In fact, entire new homes can be certified through the program — homes that offer significant benefits to their owners.

Jonathan Passe, director of Energy Star Residential Programs, explains what goes into an Energy Star-certified new home and why consumers should consider buying one:

New Home Source: When was the Energy Star program introduced and what did it entail?

Passe: When the Energy Star program was first introduced by the EPA in 1992, it was only available for personal computers and monitors. Other consumer products, like heating and cooling equipment and appliances, came later. It wasn’t until 1995 that we started to offer Energy Star-certified new homes. That version of the program lasted for more than 10 years.

In retrospect, it was a fairly basic package of the low-hanging fruit of energy-efficient new construction: better thermal envelopes, good levels of insulation, high-efficiency heating and cooling systems, tight ductwork and high-performance windows. But, it started an important dialog with both homebuilders and homebuyers that energy efficiency was an important factor in constructing homes right.

The hallmark of the program has always been independent third-party verification using the Home Energy Rating System (HERS). In later years, we also began to require additional Energy Star-specific, quality-assurance checklists to be completed for homes that earned the label. More independent inspections and tests are done on an Energy Star home than on a typical new home.

NHS: As EPA rolled out new versions of Energy Star, how did the program change?

Passe: As the national building code becomes more rigorous and builder practices become more efficient, we have had to raise the bar for Energy Star. When Version 2 was rolled out in 2007, it introduced the Thermal Bypass Checklist, due to concerns that certain critical details extremely important to indoor comfort and thermal performance were often overlooked during the construction process.

The current version, Version 3, expands on the Thermal Bypass Checklist with a more comprehensive Thermal Enclosure System Rater Checklist. We also added HVAC System Quality Installation checklists for contractors and raters that specify the proper design, sizing, installation and commissioning of HVAC equipment.

And we added a Water Management System Builder Checklist to address durability and indoor air quality issues. As building envelopes get tighter, it becomes more and more important to keep water out of the house. So we need to make sure that builders are doing the right kinds of details on the outside of the house — flashing, moisture barriers and site grading, for example — to prevent water intrusion. Moisture generated by cooking and bathing also has to be properly vented to the outside.

NHS: Why should consumers consider purchasing an Energy Star-certified new home?

Passe: The purpose of the program is to help homebuyers easily identify new homes in the marketplace that are truly energy efficient. Every builder says he builds an energy-efficient house, but that may or not be true. Energy Star homes are third-party verified to meet rigorous guidelines set by the EPA. This gives homebuyers peace of mind, because they can trust that they’re getting a home that’s been independently verified to be significantly more energy-efficient than the typical code-built home.

NHS: There are many green-building certification programs in the United States. How does Energy Star fit into the “green” picture?

Passe: Energy Star was never really conceived of as a green-building program. It’s specifically related to energy efficiency. But as consumers become increasingly interested in green building, it’s important for us to try to explain the relationship between Energy Star, energy efficiency and green building. We coined a phrase that we like to use a lot: “Every green home begins with Energy Star Blue,” referring to (Energy Star’s) blue label.
All green-building programs deal with the same types of things, such as site design and management; energy efficiency; water conservation and sustainable materials. By following the Energy Star program requirements, builders can get credit for the energy- efficiency component. They can also participate in other EPA programs that complement Energy Star, such as the Indoor airPLUS program, which addresses indoor air quality, and WaterSense, a whole-house water-efficiency label.

NHS: How much can owners of Energy Star-certified homes save on their utility bills?

Passe: According to our estimates, they’ll save, on average, $300 a year. When that’s invested over a 10-year period, it can grow to savings of $4,000 or more.

NHS: $300 a year doesn’t seem like a lot.

Passe: It’s not a super-significant number compared to what people pay for everyday things like cell phones and cable bills. But Energy Star is really about other quality benefits such as comfort, construction quality, durability and lower maintenance costs. Air leaks and drafts are diminished, humidity levels are controlled and outside noise is reduced. The bottom line for homeowners is that they get to live in a better home that costs less to own and operate over its lifespan.

NHS: Don’t Energy Star homes cost more to build — a cost that is passed along to the homebuyer?

Passe: We estimate that the initial cost of an Energy Star home is $2,000 to $2,500 more than a code-built home. But the value to homebuyers is much more significant. The actual monthly mortgage cost of that upcharge over a 30-year period is dwarfed by the out-of-the-gate utility-bill savings, maintenance savings and other quality and durability benefits.

NHS: How many homebuilders are currently participating in the Energy Star program?
Passe: More than 2,700 are currently building Energy Star homes in the U.S., and they’re very diverse. We have large, national production builders like KB Home, Meritage, NVR and Beazer, as well as small- and medium-size regional and local builders. Energy Star homes can be found in every market segment from affordable homes to upscale custom homes. Many people don’t know that Habitat for Humanity builds many Energy Star homes for low-income families through their various affiliates. Energy Star homes can be single-family detached, single-family attached, multifamily, manufactured and modular homes. So, no matter what type of home you’re looking for, you can purchase one that’s earned the Energy Star label.

NHS: Do most people realize that the blue Energy Star label doesn’t just apply to consumer products like appliances and TV sets?

Passe: Based on the market research we’ve done, about 85 percent of American consumers recognize the blue label. They typically come in contact with the brand when they’re at Lowe’s or Home Depot or Best Buy or Sears, looking for appliances or televisions or computers. But they don’t necessarily know they can buy an Energy Star-certified new home. We regularly need to communicate — and our builder partners need to communicate — that while an Energy Star home may contain Energy Star products, a whole lot more goes into certifying a new home than a dishwasher.

NHS: What changes are we likely to see in the Energy Star program in the near future?

Passe: Every three years, the IECC (International Energy Conservation Code) is revised. It’s a voluntary national code that some states adopt and some don’t. The majority of states have adopted the 2009 IECC, which is why the Energy Star program is pegged to that code.

There is a 2012 version of the code out there, as well as a 2015 code around the corner. A small handful of states have adopted the 2012 code. Rather than respond by changing the national Energy Star requirements, in those states that have adopted the 2012 code we’re rolling out a slightly modified and more efficient Energy Star homes program that we’re calling Version 3.1. There is no short-term plan to make V3.1 national. If, at some point, a majority of states adopt the 2012 code or even the 2015 code, we’ll consider making V3.1 the national specification.

NHS: Can buyers tell to what version a home is certified?

Passe: If you’re in the market for a new home today, you’re going to be looking at a V3 home, but there are existing homes for sale that are certified to earlier versions of the program. The blue sticker indicates which version.

NHS: What are the top Energy Star homebuilding markets right now?

Passe: Nationwide, approximately 13 percent of all single-family homes built in 2013 were Energy Star certified. But in a number of states, such as Arizona, California, North Carolina, Texas and Virginia, market share is significantly higher. In 2013, the leading market for construction of Energy Star-certified homes was Phoenix, with 9,600 homes, followed by Houston and Dallas-Fort Worth with 7,900 and 7,700, respectively. In a couple of cities, the numbers are in the 3,000s, such as Washington, D.C., Charlotte, N.C., and Las Vegas.

NHS: Can home buyers purchase an older home and retrofit it to Energy Star standards?

Passe: In the early days of the program, it was technically possible to do that, though not necessarily cost effective. But as we’ve progressed through different versions, the reality is that a lot of what goes into making these homes better are things you just can’t retrofit. For instance, you can’t do proper insulation work under a slab or in a basement, and you can’t execute the water-management details that Energy Star requires … unless you do a gut rehab, and then it’s basically a new house on the same foundation. So, there really is a powerful opportunity to build a brand-new, truly energy-efficient home.