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Cost and Savings data for Energy Saving Improvements is presented to aid real estate appraisers in evaluating energy saving improvements in residential property
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SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Valuing Home Performance:Guidance For Appraisers
Last week I met with a group of real estate appraisers about
valuing Energy Savings and Home Performance. I found:
1. They have a tough job right now. Many demands from
many directions.
2. They want to do their job right, but lack the tools and documentation to back up
the valuation of Home Performance
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Legislators say, “Value Home Performance”... But provide no measuring tools
For full text of the directive to value Energy Savings and Home
Performance see:
http://dl.dropbox.com/u/355755/Appraisers%20required%20to
%20value%20Energy.pdf
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Types Of Measuring Standards To Value Energy Efficiency
3 Methods of Valuing Energy Efficiency will be offered. All are based on Department of Energy DOE 2 Data
And statistics accumulated over many years.
1. Full use of online DOE 2 modeling software2. Extracts from the DOE 2 Tables
3. Summary Extracts and Sample Houses
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
As Would Be Expected....
1. The Easiest Methods of Valuation are the Least Accurate
2. The Most Accurate Methods take longer to learn and use.
3. But All methods are based on the super accurate DOE 2
information platform and will allow appraisers fulfill the
requirement to value Energy Savings
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Before We Dive In.....There are two even better and
very easy ways to evaluate Energy Efficiency:
But they are rarely avaialabe...
1. The Real Utility Bills compared to the Comparables.
2. A professionally done Energy Audit by a BPI certified auditor
(Use these if available)
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
The DOE Website (for Consumers)http://hes.lbl.gov/
The government spent millions developing the information on this
site and presenting it in a clear enough way that it would be useable
by consumers.
Like the “free” PG&E classes, you have already paid for this tool. I
hope you find it as valuable as I do.
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Enter Zip Code
Read About The Site
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
These 10 simple energy efficiency items cost about $4000 and save $600 per year which is a 16% return on homeowner investment
(1997 costs & electric costs)Costs of Improvements have increased only 50%Costs of Electricity has increased 150% or more
Serious savings add serious Value.
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Text
These 10 small items save $600 per year for $4000 cost
BUT ... These calculations are with old (cheaper) Electric Rates. Most homeowners pay at least double these rates.
PG&E’s top tier (January, 2010) rate isover 5 times the rate used here.
These prices may seem low. They are only the “additive” cost above what a non Energy Star item would cost
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
The first screen shows the average of all averages for the Zip Code. (no cooling?) Not too much value. But the
Plug load (gadgets) in purple is significant.Dont stop here. Now it’s time to customize.
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
After Adding Central AC (8 SEER) was existing
Note Savings Opportunity
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Click CalculateRecord your session number to return
& not lose your work
Blue Dot Indicates which categories
have been modified. The others remain ZIP Code averages.
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Continue “change” to Clarify Items that have been
improved. First input the original item BEFORE the
improvement.
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Most screens have drop down boxes & fill in the blanks.
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Here a best guess is all you can do on a foreclosed
home or any home with no history available
Remember to Save Answers After Visiting Each Screen
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Here you need to use your judgement if actual utility records are not available. The average
electricity cost for PG&E is somewhere between 12 and 47 cents, depending on how far the user goes up into the more expensive pricing tiers.
Save & Recalculate
This function doesn’t work for our purposes at this time.
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Notice the change when real (better estimates)utility costs are entered
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Here are the estimated costs after all relevant areas have been updated. Remember this first updating is
to the pre-improvement condition. Or the condition of the comparable homes in the area.
Note the blue dots
This is “BEFORE”
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Next: Enter The ImprovementsSave a copy after your final adjustmant of the
“Before” condition.
Then re-visit each area and make the changes
that you know have been made to the home.
Save a copy “After” the repairs and compare the
two energy costs.
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
The “After” Results
This is the important number on this form. The other numbers are
comparing with premium upgrades not selected in this
home (96% furnace etc)
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Before - After = SavingsBefore $3819After $1718
_________________________________________________________________________________________________________________________
Savings $2101 / yr
Note: I feel comfortable with these “After Treatment” numbers as I have treated several homes in the same
neighborhood with the same treatment package and gotten even better results than these numbers.
(They bought no expensive tier kilowatts)See the numbers at: For Real Home Performance…
Monitor The Bills (top blog post at GreenEarthEquities.com)
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
We Have Real Savings: Now What?
This has been a quick introduction to the DOE Home Energy Saver, online energy saving calculator. For
complete documentation on the Home Energy Saver see: http://hes.lbl.gov/hes/makingithappen/mih.html
For now I will leave it to appraisers who will know what to do with these savings numbers after they are generated.
Following are some additional points about value and some excerpts from the above data that may be helpful.
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
ROI Is Not The Whole Story!Return On Investment isn’t even the main reason most
people spend money improving their homes. Other Reasons that add value in the minds of Consumers,
(Purchasers of Improvements and Purchasers of Homes)
1. Comfort2. Security3. Health
4. Lower Medical Bills5. Less Days Absent
6. Pride of Ownership7. Right For The Planet
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Savings and Cost DataThe following saving numbers are
from the DOE 2 data on the 1200 sq ft sample home in
Fresno, CA. Each item was changed individually from Before
to After and the difference recorded. Loading Order of this
process skews the individual savings slightly but not the totals for the whole package. Costs are real renovation costs from
the same home in 2009.
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Savings and Cost DataItem Savings Cost 100%
Air Tightness (Shell Seal) 77 650Doors & Windows 252 3800
Attic Insulation 123 1800Thermostat 140 150Refrigerator 261 1850
Cooking 36 1650Washer Dryer 84 1244
Ducts 105 1800 newAir Conditioning 745 6500
Furnace 260 Incl in ACLighting 236 1300
Water Heating 50 400
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Savings and Cost Notes1. Costs listed are my actual renovation
costs for the item in this 1200 sf complete renovation in 73727 Zip Code.2. Costs in the Home Energy Saver are the additive costs. (the DIFFERENCE)
between a “standard” item and the Energy Star equivalent.
3. Home Performance works best as a SYSTEM as each part works symbiotically with the others.
4. Piecemeal replacements rarely achieve 100% of the expected savings.
SavingThe PlanetOne HouseAt A Time
G r e e n E a r t h E q u i t i e s . C o m © 2009
Real Cost & Value, 2009This package of improvements has been
done consistently on 7 houses, all about the same size, in the same neighborhood over the last year. My “hard cost” is consistently $16,2500 (does not include Refrigerator,
washer, or dryer.) All the houses have sold for well above the comps in the
neighborhood and all have met appraisal because the appraisers have given value to
these and other improvements.(CMA’s available on request)
I hope this information is helpful. Email me if you have ideas to improve its value.
Dave Robinson [email protected]