Green Homes

The Green Homes Market

Studies have shown that the green homes market will experience significant growth this decade. For example, McGraw-Hill estimates that the sector will grow by up to 38% by 2016, while Pike Research predicts that there will be an additional 120 billion square feet of green homes in the world by 2020.

However, existing homes are expected to see a surge in green retrofits as well. McGraw-Hill Construction reported that home builders will use green technologies in 90% of homes by 2016. Additionally, 34% of home remodelers said they expect to do mostly green work by 2016 - up from 150% from 2011.

Additionally, Pike Research’s Energy Efficient Homes study estimates that the annual market for global residential energy efficiency will grow to $84 billion by 2020. This is more than 83% greater than the current annual market value, which Pike estimates was $14 billion in 2012.

According to Pike analyst Brittany Gibson, the group defined energy efficient homes "as properties that are built to exceed the 2009 International Energy Conservation Code by at least 15% on a kilowatt-hour per square foot basis".

This growth in the market will result in the addition of 118.6 billion square feet of energy efficient residential space, which includes both new construction and retrofits. The European Union currently has the most mature green homes market, but will also exhibit the most growth over the next 8 years due to energy efficiency and carbon regulations.

According to the research company, over half of the energy consumption globally is from buildings, and is expected to grow from 31,983 terawatt-hours (TWh) in 2012 to 51,253 TWh by 2050. Therefore, the growth in green homes that use less energy could have important environmental impacts.

Green Home Certification

While green homes do not require certification to be considered "green", certification can verify that a house or residence has met specific sustainability or energy efficiency standards. LEED for Homes, GreenPoint and ENERGY STAR are common green home certifications that guarantee a residence's sustainable design and operation.

1. LEED for Homes

Green buildings can become certified through the Leadership in Energy and Environmental Design (LEED) program. The LEED for Homes rating system specifically certifies residential buildings that have met or exceeded certain energy efficiency, water efficiency, indoor air quality, resource use, etc. standards. To earn certification, the homes must meet all of the rating system's prerequisites, plus earn a certain number of optional credits (which are worth points). The higher the number of points, the higher the home's LEED certification level (Certified, Gold, Silver, and Platinum).

Homes that are working toward LEED certification require the help of a Green Rater. A Green Rater must be present from the design phase through the construction phase, and will verify that the home meet the tenets of the rating system.

On June 13, 2012, the United States Green Building Council (USGBC) announced that it has certified over 20,000 homes via the LEED for Homes rating system, and has 79,000 additional Homes projects in the pipeline. This is a milestone for the relatively new rating system, which launched in 2008.

2. GreenPoint

The GreenPoint system is operated by Build It Green, a professional non-profit organization, whose mission is to promote healthy, energy and resource-efficient buildings in California. "GreenPointRated" is a rating system that, similar to USGBC's LEED, requires earning points or credits in categories of sustainability. In this case, the categories include energy efficiency, resource conservation, indoor air quality, water conservation and community.

To become GreenPoint Rated, residential properties must meet minimum requirements in each category and score at least 50 points total.

According to a reports by CoStar, the Leonardo Institute and others, the costs associated with green-building techniques do not significantly increase the cost of construction when compared to non green-building approaches. Points/credits typically vary in cost with some claiming a premium for investment. The majority of points/credits are considered affordable.

3. ENERGY STAR

ENERGY STAR only addresses energy efficiency, which is just one of the categories of performance addressed by LEED certification. In fact, LEED for Homes includes ENERGY STAR certification as a means of compliance for energy efficiency performance.

However, the ENERGY STAR buildings program is free for participants, unlike LEED for Homes certification.

Green Homes: Return on Investment

On July 19, 2012, researchers from the University of California at Los Angeles (UCLA) and the University of California at Berkeley (UC Berkeley) released a study, "The Value of Green Labels in the California Housing Market". The study found that homes with green certification, including LEED, GreenPoint, and ENERGY STAR, sell for 9% more than conventional residential properties.

The researchers studied data from the 1.6 million homes sold in California over the last 5 years, and found that an average home priced at $400,000 would increase by $34,800 if it were labeled with LEED, ENERGY STAR or GreenPoint.

The report indicates that green labeled homes have a higher value because they are easier to cool (hotter areas had more green home sales) and consumers have a greater green awareness. Interestingly, the researchers found that residents in areas with high Toyota Prius registrations were willing to pay more for green homes - which the report coined "the Prius Effect".

Residential Energy Audits

While you may not be interested in building a new home or certifying your current home, a residential energy audit can help you to determine which areas in your house are the best to target for energy efficiency.

Plus, the ENERGY STAR program for New Homes requires that eligible houses are inspected by a Home Energy Rater (HERS Rater) or an equivalent energy auditor.

Some local governments and utilities and governments have energy auditing programs that you can take advantage of. Alternatively, you can look for a local certified energy auditor.

The Residential Energy Services Network (RESNET) certifies HERS Raters to inspect homes, prepare home energy ratings and recommend home energy efficiency improvements.

Similarly, the Building Performance Institute (BPI) provides a variety of green building certifications, including certifications for professionals who provide energy efficiency retrofits. The Building Analyst certification specifically demonstrates a professional's ability to perform whole-home energy assessments.