Home appraisals to include energy rating scores

Dive Brief:

A new partnership between the Residential Energy Services Network and the Appraisal Institute aims to include Home Energy Rating System scores in appraisals to help potential buyers better gauge a home’s energy efficiency, according to a report by the North American Insulation Manufacturers Association.
Under the plan, RESNET’s database of HERS-rated homes in states where the rating system is prevalent, such as Texas, will be available to the Appraisal Institute. Additional states will be added as the partnership progresses. The HERS score will be added as a green-building certification, similar to LEED for Homes.
According to RESNET, the value of residential energy improvements is not often recognized in appraisals, which can be a major roadblock to financing the inclusion of green features in homes.

Dive Insight:

The inclusion of HERS scores in appraisals is expected to have repercussions for homebuilders and may spur a renewed effort to consider energy-efficiency in the design of new homes and remodels.

The HERS Index measures a home's energy efficiency and considers construction components like floors, ceilings and roofs, attics, above- and below-grade exterior walls, HVAC systems, and windows and doors. The scoring system uses a baseline mark of 100 for a standard new home, meaning that a home with a HERS score of 70 performs 30% more efficiently and a home that scored at 130 performs 30% less efficiently.

States that have incorporated the HERS Index into their building codes include Alabama, Illinois, Massachusetts, Michigan, New Jersey, New Mexico, New York, South Carolina, Utah, Texas and Vermont.

Under the 2015 International Energy Conservation Code — which has limited adoption as of yet — builders are offered an additional compliance path to the typical prescriptive- and performance-based methods in the form of the HERS-based Energy Rating Index. All options require blower-door testing and duct testing, which are key features of HERS ratings.

A push to make homes more energy efficient is making headway across the U.S., particularly in cities with large carbon footprints, according to Zillow. Santa Monica, CA, recently passed a city ordinance stipulating that new homes must be net-zero energy, meaning that they generate as much energy as they consume using renewable sources such as solar and wind power. Lancaster, CA, meanwhile, recently added a power-generation requirement to its mandatory photovoltaics rule for new residential construction.

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