Independent Advice Before Hiring a Contractor -- Energy Smart by RESNET

I think there are many homeowners who will think RESNET's Energy Smart is indeed a smart model for ensuring high quality, cost effective energy improvements for existing homes. This is the eZing model. We provide an initial energy audit and recommended improvements, after which the owner works with contractors on the desired work scope. Our “Owners Representative” service helps owners who are too busy to oversee the bidding process and the work of various contractors involved in the retrofit. This service includes a follow-up energy audit and a “final” blower door reading. We have presented the energy savings results at energy conferences.

Lies, Misleadings, Misunderstandings and Myths about Energy Efficiency

By John Porterfield

Efficiency pays for itself in the "long run". Fact: Knowledgeably selected efficiency improvements deliver immediate payback.

The “long run” untruth follows from neglecting to account energy efficiency as an asset (you know, wealth). Efficiency sits on your balance sheet as well as your income statement (avoiding some utility cost = income). An owner of an efficient building is more wealthy.

How do we know that energy efficient buildings have better sales value? Appraisal Journal’s 1998 article covering a study of 4,500 sales transactions showed $11 to $22 higher sales value per dollar reduction in utility cost. A subsequent study confirmed this.

Payback is a good way to decide about energy efficiency. Payback is the number of years of energy saving equal to cost. Fact: Standard measures of economic merit that include yield and asset growth should be applied to efficiency investments.

Payback is misleading in several ways:

• Payback does not account for the wealth that comes with efficiency (see above). We compare investments using rate of return, earnings divided by principal. Using a non-standard Payback tends to discredit efficiency as an investment and makes it difficult to compare.
• Payback focuses one’s attention on waiting. We don’t want to wait.
• Use of "Payback" may conceal the possible immediate result.

One must wait for positive economic outcome from efficiency

Say utility bills are reduced $800 per year and a loan for efficiency improvements is $50.00 per month. Do the math. You net $200 in year one. “In the long run” is not applicable when energy efficiency work is selected based on facts.

Money spent on efficiency disappears.

Fact: Efficiency improvements to your building will reappear as wealth. Efficiency isn’t just about money and neither is wealth. Improvements that match actual efficiency defects, and are properly installed, will:

• Correct discomfort, such as one cold room
• Create a healthier indoors – efficiency air circulation helps prevent cold spots and mold
• Reduce repairs – wasteful air leakage to the attic carries heat and moisture that damage your roof

I need an energy audit to accurately predict savings. An energy audit is most useful when it identifies:

• Type of waste defect
• Severity of waste
• Location and extent of defect
• How to correct the defect: best methods and materials
• Realistic cost and savings, accurate enough that you can move forward

Studies in real homes give us a realistic picture of cost and savings. Audit calculations may be off by 40%, based on a review of accepted audit software by Lawrence Berkeley National laboratory. Check reality: natural gas cost varies 35% from one year to the next (see Citizens Utility Board, natural gas price checker).

Savings from efficiency will be negated by increased utility cost. Fact: Efficiency is a tactic to avoid paying higher costs. You are not charged for energy that you don’t use; so it follows that you pay no cost increase on avoided use.

Efficiency saves “up to XX %!” Fact: Efficiency is not a high return investment. But, most secure investments have reasonable, not high return. Efficiency is as secure as title to property. Fact: Efficiency income is tax-free (you don’t report the money NOT paid to the utility). Fact: Efficiency is an appreciating asset, unless utility costs go down. Fact: The best efficiency improvements have ten times higher yield than a comparable tax-free secure investment (35% rather than 3.5%).

Efficiency saves “up to 20 %!” Fact: A carefully monitored residence that received improvements that addressed every type of defect showed 50% reduction. All but three of the 25 improvements to save gas and electricity had an amortized cost less than the cost of utility-supplied gas and electricity. Similar results were measured for a typical 8,000 sq ft office building. See results of studies conducted by Lawrence Berkeley National Laboratory for Pacific Gas and Electric company.

Renewable energy is a good choice. Fact: Reducing energy use is equally effective in all cases, and is substantially less costly in most cases. As a rule your dollars help the planet more when invested in energy-use reduction.

An energy installation firm will guide me to the best improvements for my home. Fact: An installation firm may be loyal to a customer, but may also be loyal to the owner and employees of their firm. We call this split-loyalty. An efficiency firm may never return to your home.

One week of training is sufficient to master energy auditing. Fact: The Energy Auditing course at University of Illinois at Chicago (ENER424) is one full semester.

Air sealing a house causes an unhealthy condition. Fact: The best way to achieve healthy indoor air is to stop the introduction of air contaminants. See the Healthy House (American Lung Association) guide for achieving healthy indoor air. Codes require fan-forced ventilation in buildings other than houses. Houses that have fan-forced ventilation may be air sealed as much as is practical. A tight house that has fan-forced filtered air supply will have cleaner air than a leaky house.