"Home is where the hearth is," goes an old
play on words. But what about the solar
panel or the wind turbine? Maybe they could be where
the home is, too. That's the view of a growing move-
ment to make energy-efficient homes the norm, not
the exception. Such homes currently constitute just a
tiny fraction of the U.S. residential market. Now, dri-
ven by mounting fuel costs, heightened sensitivities to
climate change, and rising worries over indoor air
quality, the race is on to reform housing for better
environmental performance.
Decades ago, U.S. state
and local governments began offering limited incentives to motivate
energy-efficient homebuilding, and most programs today are
still limited to energy conservation; consumers looking for
breaks on other green features—for instance, nontoxic or
recycled building materials, or rain collection barrels for
lawn and garden watering—are largely out of luck, at
least for now. Only New Mexico offers a comprehensive incentive
package that goes beyond energy to address other green
concerns. A few other states are broadening their programs, but
slowly, says Jason Hartke, the manager for state and local
advocacy for the nonprofit U.S. Green Building Council (USGBC).
As far as energy efficiency incentives go,
the number and variety on offer has swelled dramatically in
recent years. In places like Aspen, Chicago, Tucson, Tempe,
Santa Monica, Scottsdale, Seattle, and Washington, DC, among
others, building departments provide leadership in green
residential design, says Darren Meyers, contracts manager for
the International Code Council (ICC), a membership association
based in Washington, DC. Many of these cities have adopted
policies that spur architects, homebuilders, and code enforcers
to incorporate green building practices.
Today, the federal government
and a growing number of utilities and private organizations offer
incentives with real value. In some states, their combined
worth can offset the cost of a solar power installation by more
than 50%. Tax credits, utility rebates, expedited permitting
for new construction, even coupons for energy-efficient
products (compact fluorescent lamps, for example) are
jump-starting the market, ideally in a sustainable way. "These incentives are an important step toward making
[energy efficiency] standard in residential settings," says
Edward Legge, a spokesperson for the Edison Electrical Institute,
a utility trade association in Washington, DC.
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Most incentive programs today are limited
to energy conservation. Only New Mexico offers a comprehensive
package that goes beyond energy to address other green
concerns. A few other states are slowly broadening their
programs.
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Jump-Starting the Market
Such incentives have their roots in the
energy efficiency movement of the 1970s. Stunned by Middle East
oil shocks, Congress devised efficiency standards that
eventually morphed into the International Energy Conservation
Code (IECC) and American Society of Heating, Refrigerating,
and
Air-Conditioning Engineers (ASHRAE) Standard 90.1. Both codes
are fundamental cornerstones for energy efficiency in building
design, insulation, heating, cooling, hot water, and lighting.
Both the IECC and ASHRAE
90.1 are viewed as minimum standards; to qualify for incentives,
products and
homes have to exceed them. For instance, to qualify for the
Energy Star label, products must exceed the IECC standard by
at least 30%. Energy Star was created by the Energy Policy Act
in
1992. Today, it's co-administered by the U.S.
Environmental Protection Agency (EPA) and the Department of
Energy (DOE). Over time, Energy Star's purview has grown
to include appliances, office equipment, lighting, electronics,
and even single-family homes. But until recently, consumers who
bought Energy Star products had only their conscience to
motivate them—there weren't any financial
incentives behind the program, and its growth overall was slow.
That changed in 2005, when
revisions to the Energy Policy Act tied federal tax credits to
purchases
that exceeded Energy Star criteria. These credits became the
first—and remain among the only—federal incentives
for energy-efficient products and homes. Consumers can now
claim federal income tax credits ranging from a low of $150 for
an Energy Star furnace or boiler to $2,000 for an Energy
Star–rated house. Richard Faesy, a senior project manager
with the nonprofit Vermont Energy Investment Corporation, says
these incentives have boosted Energy Star sales, thus affirming
their market value.
The credit for an Energy
Star–rated
house goes directly to the builder (or to owners who manage the
construction of their own home), depending on inspection
results by a "home energy rater" who is, in turn,
certified by the Residential Energy Services Network (RESNET),
a coalition of energy efficiency home inspectors headquartered
in Oceanside, California. Meyers says home energy raters use
what's known as a "blower door test" to
evaluate living spaces for drafts and air leaks.
"Basically, they close windows and doors and bring the
house to a known standard pressure," he explains.
"That allows the rater to test for air leaks, which
translate to a measure of how tight the overall construction
is. . . . Home energy raters also evaluate windows, doors,
ducts, insulation placement, and mechanical equipment to come
up with an overall score for the home." Homes qualify for
the $2,000 Energy Star credit if they exceed the IECC benchmark
rating by 50% or more (or 30% or more for manufactured homes).
In the grand scheme of
things, Energy Star credits might seem rather small. But they
actually cover a
surprising portion of what it costs to build green. The expense
of a tight building envelope, better windows, and
energy-efficient systems generally adds just $3–5 per
square foot and often less, according to Greg Kats, managing
director of Good Energies, a venture capital firm that invests
in sustainable technology. Assuming the lower end of that
range, Energy Star credits combined could conceivably cover
half the "green premium" of a sustainably built
2,000-square-foot home. [For more on this topic, see
"Bringing
Green Homes within Reach: Sustainability Meets
Affordability," p. A24 this issue.]
A hidden cost in that equation, however,
is that of the Energy Star inspection itself, which can run
from a few hundred to a few thousand dollars. Fortunately,
programs in a growing number of states, including most of New
England, Texas, and California, will often pay that cost.
Consumers who want to investigate their options can access the
Database of State Incentives for Renewables and Efficiency,
a
comprehensive online catalog of organizations that help
subsidize sustainable building.
Beyond the Feds
Utilities are a growing
and often overlooked source of financial incentives for energy-efficient
homes. "Across the board, the utility industry is working
to grow its incentives programs," Legge says. "It
makes business sense for us to recover costs and to make a
return from effective efficiency efforts." The most
progressive utilities, he adds, help pay for compact
fluorescent lamps, more efficient boilers and furnaces, even
appliances. The Long Island Power Authority (LIPA), a New
York–based utility, actually buys Energy Star
refrigerators for residents who make less than 70% of the local
median income.
LIPA and other forward-thinking
utilities also contribute toward residential purchases of solar
power.
A
full solar installation of up to 5 kilowatts might cost more
than $30,000 (of course, homeowners can buy less solar capacity
and combine it with grid power). But LIPA's program
covers nearly half that amount, regardless of the
homeowner's income. What's more, the state of New
York kicks in a 25% tax credit capped at $5,000, to which the
federal government—through Energy Star—adds a 30%
tax credit capped at $2,000. All this is in addition to the
previously discussed Energy Star incentive for achieving a
high-efficiency home energy rating. Thus, the cost for a full
solar installation might drop to slightly more than 30% of its
retail value.
At the state level, New
Mexico is unique in that it rewards green homebuilding comprehensively.
Stace
McGee, president of Environmental Dynamics, a sustainable
architecture firm in Albuquerque, says other states including
Nevada, Florida, Oregon, and New York have considered broader
incentives that—like New Mexico's—go beyond
energy, but they haven't yet taken the plunge.
To be sure, New Mexico
is starting small. The entire package, passed in March 2007,
is capped at $5
million per year each for residential and commercial
construction. McGee emphasizes the cap was necessary to
reassure state legislators that green incentives wouldn't
be paid with an open checkbook. "It was an easy way for
everyone to buy into the program," he explains.
"Over time, we might be able to increase the amount, but
for now, this was something everyone could agree on."
The amounts paid under
New Mexico's
program rise as homes incorporate more green design features.
For instance, a silver-certified home under the USGBC
Leadership in Energy and Environmental Design (LEED) rating system
qualifies for tax credits of $5.00 per square foot for the
first 2,000 square feet, while a top-tier LEED
platinum-certified home qualifies for $9.00 per square foot for
the first 2,000 square feet; the credit is halved for
additional floor space. McGee predicts the average homeowner
can bank as much as $10,000 in credits, a substantial sum that
could go a long way toward funding green designs.
Until recently, consumers who bought
Energy Star products had only their conscience to motivate
them. That changed in 2005, when revisions to the Energy Policy
Act tied federal tax credits to purchases that exceeded Energy
Star criteria.
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Barriers to Energy-Efficient Building
But even as states and
utilities promote energy-efficient homebuilding, other barriers
remain. In some
cases—particularly in historic districts—homeowners
face zoning restrictions on green buildings that don't
match the local character. In Portland, Maine, for instance,
one family spent 8 months battling zoning officials before
gaining permission to build a south-facing structure built with
recycled fiber cement siding. Unlike the surrounding homes in
this waterfront working-class neighborhood, the new house
resembles a massive, square block outfitted with enormous
triple-glazed windows.
But energy-efficient
homes needn't
look unusual to run into zoning problems. All across the
country, local homeowners' associations (HOAs) have
blocked residents from installing solar panels, insulated
windows, even clotheslines—perhaps the most inexpensive
of energy-saving additions—in order to maintain
neighborhood standards for appearance. According to the 18
September 2007
Wall Street Journal, only 10 states currently
limit HOAs'
ability to restrict the installation of solar power systems or
assign that power to local authorities (and except for Florida,
Hawaii, and Utah, it is unclear in these states whether
clotheslines qualify as "solar devices").
Meanwhile, high-density "smart growth"
developments that link sustainable housing with public services
face perpetual zoning problems, says Ed McMahon, a senior
resident fellow at the Urban Land Institute, a nonprofit
research and outreach organization in Washington, DC. "No
one's looking at the big picture: mixed-use projects that
unite housing and services are inherently green because people
drive less," he explains. "Most zoning regulations
favor conventional single-use, suburban development."
Along those lines, it took years for EcoVillage, a cohousing
development in Loudoun County, Virginia, to circumvent zoning
restrictions that require much larger lot sizes than those
proposed for the "cluster" dwellings in this
community, according to McMahon.
A number of ongoing initiatives
now seek to address those concerns. The Community Associations
Institute, an Alexandria, Virginia–based organization
that represents HOAs, recently began an initiative to promote
green designs for development communities and condominiums,
says spokesperson Frank Rathbun. There are currently 300,000
HOAs nationwide, representing a combined population of nearly
60 million people. "Our goal will be to help community
associations across the country develop approaches to
sustainability," Rathbun says. "Each community has
to decide what's appropriate based on its own
merits."
Manufacturers are also getting into the
game, doing their part to normalize energy efficiency. Atlantis
Energy Systems of Poughkeepsie, New York, for instance, has
broadened a line of solar panels that resemble roof tiles,
making them less obtrusive than standard panel arrays.
The combined influence
of these efforts—linked to market forces that make
energy-efficient homes environmentally, economically, and
aesthetically attractive—have a long way to go to
transform traditional housing. But the seeds of change have
been planted, and a nascent transformation appears to be under
way.
Charles W. Schmidt