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Efficiency pays.

That’s a conclusion from a new report by the North Carolina Building Performance Association, which found energy efficient homes in the Triangle metro area sold for nearly 7 percent more per square foot than other homes.

Ryan Miller

More than 170,000 energy-efficient homes were sold in North Carolina over the last decade, ranging from 6,000-foot mansions to tiny bungalows. The state in 2016 was second in the country for sales of homes meeting the National Green Building Standard and third for homes certified by Energy Star. They were among the more than a dozen high-performance building programs tracked in the study.

Southeast Energy News spoke with the report’s main author, Ryan Miller, who runs the state trade group for the energy-efficient construction industry.

What are the features that make a new home ‘high performance?’

We definitely want to see air sealing and insulation above code — caulking up gaps and cracks and holes and putting in more insulation than the minimum code suggests. We also like to see an encapsulated or sealed attic, as a well a crawl space. That’s like putting a hat on your head to keep in heat and having a quasi-basement. [We also look for] more than the minimum HVAC rating. Anything above [the code] is going to be more energy efficient and better. The last aspect is the overall green design, where you have more significant overhangs over windows so that they’re shaded properly, or the orientation of the home is such that the sun’s not shining in through all the front windows all the time, for example.

How can you retrofit your home to be more energy efficient?

The best thing you can do to improve a home’s energy efficiency is to ensure that the HVAC system is operating correctly. That’s going to be close to 40 percent of your home’s energy usage. We recommend making sure it’s maintained properly with checkups in the winter and summer. From there, we focus on the attic. You want to make sure it’s sealed properly with air sealing, and then adding insulation as well. After starting at the top, with insulation, we usually move into the crawl space to make that sure it’s also properly sealed and encapsulated. Those two things — starting at the top and at the bottom — can add another 20 to 25 percent of energy savings. So, you’re attacking about 60 to 65 percent of the home’s energy usage by looking at three areas.

What financial benefits do these energy efficiency improvements provide?

We’ve been kicking around a campaign in our office called “10, 11, 12, for energy efficiency.” There are about 10 things you can do on your own or with the help of a contractor, they’ll cost you about $1,100; and what you’ll receive from them are $12,000 of savings over a 10-year time frame.

What if you’re buying a new home?

The most exciting part of [this year’s] report is the sales price analysis, which calculates what is the financial return for someone (either a builder or a homeowner) who is going to construct a new high-performance, energy-efficient or green home. The results indicate an average sale price premium in addition to the improved health, safety, comfort, durability and lower utility bills that these homes offer.

About 99 percent of the building sales in your study were of new homes — rather than older homes that were upgraded to be more energy efficient. Why is that?

There’s very little activity that we can track through our reporting process for the retrofit market. We certainly know there’s more than 1 percent for existing homes and buildings, but our reporting process just hasn’t been able to get all of that data yet.

With about 30 percent of all homes sold in the state meeting high performance standards, there is a lot more potential for retrofits. What holds people back from making energy efficiency upgrades?

Two of the most prominent items that are holding back investment residential energy efficiency retrofits are consumer education [and market valuation.] Most people who own a home or rent a home don’t understand what they can do to make their homes better. We have a residential consumer energy website at that helps answer those questions and [can] send people to contractors anywhere in the state.

The second barrier to investing or participating more in energy retrofits would probably be market valuation. If you own a $150,000 home and you spend $10,000 to add insulation, air sealing, replace a window, get your HVAC systems tuned up, you should receive at least $10,000 back if you’re going to sell that home six months or a year later — assuming everything’s still in place and working. In some cases, people don’t believe the upfront investment is going to yield enough return on investment, either through energy savings, or improved health and safety and comfort, or if they sell the house it’s not going to be reflected in the appraised value or the purchase price.

Does the finding that high performance homes in the Triangle sold for more per square foot mean market valuation of green features is improving?

The sales price shows that there is a tangible market value for those things, but how that’s getting done is not through the normal real estate process. There’s a lot of misconception and misinformation in the market still. Where we’ve been able to confirm that there are certified ratings and certified programs, we are seeing that there’s a positive result, but our data is not inclusive of the entire market, by any means. If realtors or appraisers were adequately listing and pricing these homes, our numbers would be looking better. The Triad [Greensboro-Winston Salem-High Point] is a good example. The value of green and high-performance features are not being recognized there well versus the Triangle, where they’re being recognized much, much better. [High-performance homes in the Triad sold for about 4 percent less per square foot than other homes.]

What can North Carolina policy makers do to help?

We do believe it would be a benefit to North Carolina, to builders and to homeowners to require home energy ratings. When that’s required, the builder is paying for home energy rating through a third party. The home energy rater can take the place of the building code official and they can take some of the work off of their hands. The code official doesn’t have to do their traditional energy code inspection anymore. Right now, about 30 percent of North Carolina homes receive that rating; in the future we’d love to see 100 percent of homes receiving that score.

Based in Raleigh, North Carolina, Elizabeth has covered the state’s clean energy transition for the Energy News Network since 2016. She has also produced features for Environmental Health News and SEJournal, the news magazine of the Society of Environmental Journalists. A former communications director for the nonprofit Environment America, Elizabeth brings over two decades of environmental and energy policy experience to her reporting.