Energy Efficiency is Making Homes More Valuable

The Choose Energy Team
By The Choose Energy Team January 10th, 2019
For business

It seems that the long debate over whether energy efficiency and a home having lower energy bills actually adds to a home’s resale value may finally be resolved.

A study conducted recently by a UCLA economics professor and his colleagues is the largest sampling to date, and showed some very interesting results. Past studies have found that things like Energy Star appliances and energy efficient doors and windows add nominal value to a home, but these studies were small in comparison.

The one conducted by Matthew Kahn from UCLA and Nils Kok from Maastricht University in the Netherlands looked at 1.6 million home sales in California from 2007 through 2012. The study found that between homes of similar design, construction and location, an energy compliance certification added around 9 percent to the home’s selling price.

It’s All About Energy Star Certification

The study looked in particular at more than 4,300 homes that were certified as having Energy Star, LEED or Green Point rated standards. These are some of the certifications that follow strict guidelines when assessing the energy efficiency of a home.

The Energy Star rating system was created by the Federal Government under the Department of Energy and the Environmental Protection Agency. It provides incentives to builders who use the system’s energy efficiency guidelines in new home development. The program was implemented in 1992 and has since been adopted by dozens of countries around the world.

LEED certification stands for Leadership in Energy and Environmental Design, and was developed by the U.S. Green Building Council. It involves sustainability practices as well as energy efficiency. This certification is most commonly used in commercial buildings, but more residential homes are beginning to seek certification under the rating.

The Green Point Rated certification is the newest of the three and was developed by Build it Green, a non-profit group. It can be used to certify existing homes as well as new construction.

What’s in a Label?

The National Association of Realtors has fought against the use of rating systems for labeling a home’s energy efficiency. They argue that doing so might create two markets for homes being sold; and that it might create an even bigger price difference between homes with a rating and those without. They go on to say that any mandate by the government for such as system would, in effect, be a penalty on homeowners who don’t invest in the certification.

We say that when the technology exists to make homes more energy efficient, it should be promoted. If by certifying a home as energy efficient, it adds to the value of the home, then that’s a net positive. It also serves to bring to the attention of homeowners the day-to-day advantages of energy efficiency. By finding out more about energy efficiency certifications, homeowners become more educated on the use of electricity and natural gas. And at Choose Energy, we think education is always a good thing.

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