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1 De Home Energy Score for Local Governments Click To Edit Master Title Style February 2017

2 DOE s Home Energy Score: What Is It? A miles-per-gallon rating for single family homes Standardized US DOE rating Provides estimated energy use for the home, given standard conditions. Reliable and easy to understand Tells consumer how much energy the home is expected to use Gives visibility to home s hidden value Provides an actionable list of cost-effective recommendations to improve a home s energy performance and comfort Generated using a DOE energy modeling tool with input provided through an in-home assessment Must be done by a qualified Assessor Free online training and test 2

3 What Data and Information Comprise a Home Energy Score? Home Energy Score is based on a home s assets that affect energy use Assets reflect those parts of the property that typically convey at time of sale The Scoring Tool applies standard assumptions about occupant behavior and local weather to allow apples to apples comparison between homes 3

4 Part 1: The Score Takes an hour or less to complete Can be generated by utilities, contractors, home inspectors, others Free, on-line tool can be used directly or linked to other software tools via API No reporting requirements, all automated 4

5 Semi-Customizable Score Page Allows Partners to show additional metrics such as Energy costs as is and with improvements Breakdown of energy use by fuel type Cost savings from improvements CO2 reduction from improvements Energy savings potential Energy use or cost per square foot 5

6 Part 2: Home Facts This section of the Report provides all of the data inputs collected by the Assessor as well as the estimates generated by the Home Energy Scoring Tool. 6

7 Part 3: Recommendations Recommendations categorized as Repair now and Replace later ; based on cost-effectiveness using state average utility rates Some Partners and Assessors provide their own custom recommendations Tool can generate Upgrade Score based on custom recommendations 7

8 Success to Date 55,000+ homes scored; 450+ Assessors 50+ home inspectors attended boot camps in MD and FL to expedite training/testing/mentoring Making it Easy 8 software tools now using our API; others underway Home Inspector Pro; Inspection Depot No need to enter data in two places New semi-customizable label Making it Matter Linking realtors & home inspectors & efficiency programs; outreach; automating data flow to multiple listing services Financing opportunities, incentives 8

9 Implementation Highlights 58,000+ homes scored since Assessors State and local adoption AL, AR, CO, CT, MO, NH, OR, others considering (e.g. MA, NY, RI) Some cities require Score at time of sale/listing to help homebuyers understand how much utility bills are likely to be Home inspectors, energy professionals, contractors can all deliver the Score Making it Easy 8 software platforms link to the DOE Tool via an application programming interface which avoids need for double entry of information Free streamlined 3D simulation training and testing for Assessors now available Making it Matter Free 3D Training & Test Linking realtors, home inspectors & efficiency programs through DOE s Home Energy Information Accelerator Financing opportunities, incentives

10 Implementation Structure US Department of Energy Maintains the Scoring Tool Offers basic training/testing to qualify Assessors & Mentors Sets minimum requirements Home Energy Score Partners Communicate directly with the Assessors Fulfill DOE requirements for QA & mentoring Can impose other requirements if desired Can use DOE marketing materials, Partner logo, etc. Can access data, Scores, and customize Score Home Energy Score Service Providers Provides QA & Mentoring Can use DOE marketing materials, tools, etc. Cities BPI US DOE Utilities States Others Inspection Depot Other QA Providers Home Energy Score Assessors Score homes Can access Scoring Tool either directly through DOE interface OR through other software tools Can use DOE Assessor logo and DOE marketing tools, information Assessors Assessors Assessors Assessors Assessors Homeowners/Homebuyers/ Builders 10

11 Why Local Governments Should Get Involved You re a trusted source who can provide objective information to residents Homeownership can be difficult, particularly for first-time buyers Buyers like to know what they re getting into before purchase Interested in keeping utility bills low while maximizing comfort Opportunity to lead and set yourself apart

12 How Can Local Governments Get Involved? Get homeowners/buyers interested Spread the word and explain the value of getting a home scored Encourage others to provide or promote the Score Utilities Housing finance agencies Home inspectors, contractors Local lenders Real estate professionals Talk to other cities, states that use the Score We can provide points of contacts if you re interested in discussing the Score with fellow cities Become a Home Energy Score Partner and offer the Score directly, or coordinate offering it in your area Other Ideas? 12

13 Is Home Energy Score a Good Fit for Your City? You are interested in Providing energy information to homeowners/buyers Promoting investment in residential energy efficiency Meeting state/local energy efficiency targets You can identify an entity/entities to Reach out to home inspectors, real estate organizations, and other home professional organizations Assist with program requirements: assessor training, mentorship, and quality assurance You have Significant number of single-family homes and/or townhouses High rates of home ownership, or incentives for landlord investment in energy efficiency

14 Thank You! 14

15 Backup Slides

16 3D Simulation Home Energy Score Training & Testing Uses computer-based simulations to recreate a range of job-site scenarios. Teaches you how to measure the Score data input consistently so that consumers can have confidence in the Score & calculations Show you how to use de-rate calculators that help take into account the quality of insulation installation as well as equipment maintenance Demos available on our web site. Developed with significant input from outside experts & practitioners. DOE conducted in-classroom/in-the-field validation study Confirmed effectiveness of simulation tool in determining a candidate s competency to deliver the Home Energy Score. 16

17 What Lenders, Borrowers, and Sellers Need to Know: Financing Products Linked to the Score FHA Policy (January 2016) Allows lenders to provide a 2% stretch on debt-to-income ratios for borrowers purchasing or refinancing a home Home must score 6 or higher or reach a 6 or higher with financed improvements Fannie Mae s HomeStyle Energy Mortgage Loan Finance up to 15% of as completed home value for energy improvements with purchase or refinance; requires Score or comparable report $500 incentive to lender on each loan Others in the works Freddie Mac also recognizes Home Energy Score; plans to undertake analysis to support more systematic consideration of energy efficiency in loans Homeowner insurance companies interested in potentially using Score to set rates; provides insight into risk PACE (property assessed clean energy financing) programs considering integrating the Score 17

18 Why Do Homeowners & Buyers Care About Energy Efficiency? U.S. Census: Energy costs are higher than property tax & insurance for average U.S. homes NARI Report: Energy improvements are good investments that bring financial relief and joy Insulation Upgrade: 61% say greater desire to be home, 95% same or increased sense of enjoyment, and 66% major sense of accomplishment HVAC Replacement: 57% say greater desire to be home, 59% say increased sense of enjoyment, 55% major sense of accomplishment $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 Average U.S. Homeowner Costs: 2012 (US Census) $2,506 $2,082 $1,023 Energy Property Tax Homeowner's Insurance Sources: National Association of Insurance Commissioners, 2012, Annual Homeowners Insurance Report; National Association of REALTORS and the National Association of the Remodeling Industry (NARI),

19 Studies Nationwide Show Energy Efficient Homes Sell for More, Faster Certified homes sell for 9.6% more 6 Certified homes sell for 4.2% more & 18 days faster 6 Certified homes sell for 2.1 to 5.3% more 9 Homes that disclose energy costs sold 20 days faster 5 Natural gas homes command $11 more per square foot 11 Homes that use green fields consistently perform better on market indicators 8 PACE homes delivered$199 to $8,882 above cost of improvements 7 ENERGY STAR homes sold at $5,566 premium at $2.99 per ft 2 more, & 89 days faster 10 Homes designated relatively energy efficient sold for an average $3,416 premium 4 Houses with one or more green element sell for 5.9% more 2 New certified homes sold for 12.9% more,$13.82 per ft 2 more, & 42 days faster 1 Certified homes sold for a higher percentage of their asking price & 31 days faster 2 Sources: 1 Argeris, 2010; 2 Cadena & Thomson, 2015; 3 Carson Matthews, 2009; 4 Corgel, Goebel, & Wade, 1982; 5 Elevate Energy, 2015; 6 Griffin, 2009; 7 Goodman & Zhu, 2016; 8 Institute for Market Transformation, 2015; 9 Kahn & Kok, 2013; 10 Pfleger et al., 2011; 11 Springer,

20 The Research Says: Homebuyers Value Energy Efficiency Studies Show a Sales Premium of: 2% to 12.9% for designated energy efficient homes 1, 2, 3. 7, 12 $2.99 to $13.82 per square foot for every dollar saved on annual electricity bills from efficiency investments 1, 5, 10, 15 $3,416 to $8,882 for designated energy efficient homes 4, 8, 9, 12, 13, 14, 15 VS. Designated energy efficient Comparable home Sources: 1 Argeris, 2010; 2 Cadena & Thomson, 2015; 3 Carson Matthews, 2009; 4 Corgel, Goebel, & Wade, 1982; 5 Dinan & Miranowski, 1989; 6 Elevate Energy, 2015; 7 Griffin, 2009; 8 Goodman & Zhu, 2016; 9 Halvorsen & Pollakowski 1981; 10 Horowitz & Haeri, 1990; 11 Institute for Market Transformation, 2015; 12 Kahn & Kok, 2013; 13 Laquatra, 1986; 14 Longstreth, 1986; 15 Pfleger et al.,

21 Multiple Listing Services Starting to Take Interest Real Estate Standards Organization: Called on Multiple Listing Services (MLSs) to Adopt Standard Green Fields by January 2018 MLSs that Currently Feature Home Energy Score REColorado (Denver, CO) Aspen Glenwood (CO) Cincinnati (OH) 21 MRIS (DC, VA, MD) NEREN (VT, NH) & Others!