Home sellers and real estate agents in Montpelier, Vermont, are adjusting to the city’s new home energy labeling ordinance, but most appear to be complying. 

Since the mandate went into effect on July 1, 49 home energy labels have been created, about as many as one would expect in a small municipality where around 100  homes sell annually, said Chase Macpherson, community decarbonization associate for Northeast Energy Efficiency Partnerships, or NEEP. 

NEEP developed the home energy labeling tool Montpelier is using in partnership with software developer ClearlyEnergy. Called the Vermont Home Energy Profile, the online tool estimates a home’s annual energy costs, information that must now be provided to prospective home buyers. 

Montpelier is the first community in New England to adopt such an ordinance, partly as a step toward achieving its goal to become a zero-carbon city by 2050. 

“The reason that I was convinced that we should do this is that in other places that have home energy labeling requirements, according to various studies, just by having that information available, 10% to 30% of buyers end up voluntarily making energy improvements to their home,” said Mayor Anne Watson, who was the primary proponent for the new ordinance. (Watson was elected to the state Senate last week.)

Each label includes a list of suggested actions a buyer can take to cut energy costs, such as insulating an attic or updating thermostats. It also includes a list of local organizations that provide energy-efficiency resources. 

Both sellers and buyers must sign a form at closing that says the home energy profile was created and provided to the buyer. That certification is then filed with the town clerk. 

While the tool may not be as accurate as having a professional home energy audit done, it’s at least 70% to 80% accurate — and free, Watson said. 

“We are essentially trading off a degree of accuracy to cut the cost and make the process faster,” Watson said. 

The energy use estimate generated is based on public data available from the local tax assessor’s database, like square footage and age of the home. But homeowners using the tool are also prompted to plug in additional information about their home to increase the estimate’s accuracy. 

That has proven problematic for some older homeowners who aren’t computer savvy, said Tim Heney, principal broker at Heney Realtors, in Montpelier. Vermont has one of the oldest populations in the nation.

“We’ve had cases where family members have had to help a relative do it,” he said. “That’s the biggest hiccup.” 

And agents are still getting accustomed to the new requirement. 

“It’s not uncommon to get to closings and have someone say, oh my gosh, we have to get a home energy profile done,” he said. 

The ordinance does include a penalty for noncompliance. Sellers are to first receive a letter of warning, after which a fine of $25 a day may be issued, up to a cap of $500. Watson said the city is still determining how to handle enforcement.

Peter Tucker, advocacy and public policy director for the Vermont Association of Realtors, said he believes the actual energy bills commonly disclosed to buyers on what’s called the seller’s information report are more accurate. While that report is voluntary, he estimated that it is attached to around 80% of transactions.

But Macpherson said utility bills only reflect how that particular occupant is operating the home; the energy labeling tool provides an estimate based on a variety of factors.

Users who have problems with the program can click on a help button to message ClearlyEnergy and receive assistance to resolve their issue. NEEP is tracking those requests, “and based on that, we will do what we can to streamline things,” said John Balfe, senior buildings and community solutions manager.

The tool is available to all homeowners in Vermont; about 100 have used it voluntarily so far. A number of communities and states in the Northeast have also expressed interest, Macpherson said, adding that she could not yet share any of those locations.

A study just released from Lawrence Berkeley National Laboratory suggests that improved efficiency can boost home values. The study found that in areas where homeowners were required to obtain Home Energy Score assessments, another labeling mechanism, sale prices were 0.5% higher for every 1-point increase in the Home Energy Score scale. 

The findings were based on the sales of more than 26,000 homes, about 65% of which were in Oregon, where several municipalities require the disclosure.

NEEP is also leading a residential energy labeling cohort to share information with interested parties about a variety of different labeling programs. 

“Ultimately, we want to see homes become more energy efficient and healthier overall,” Balfe said. “Understanding energy use can ideally lead to those outcomes.”