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.

Delta Commercial Audits

eZing staff has been performing energy audits for commercial buildings and churches as part of the Cook County Energy Efficiency Program. Creating energy simulation models of the building with software, including eQuest and TREAT, allows us to identify energy saving measures with the greatest return on investment.

As part of the program, eligible facilities receive a free energy audit with recommended energy conservation measures, free implementation assistance and assistance in obtaining government and utility incentives. The program is administered by the Delta Institute and applications are available online here. Applications are still being taken, but if you’re interested in applying, hurry, since the program is ending soon.

The IECC2009 Energy Code

eZing is working with APEC to benchmark the IECC2009 energy code, adopted in Illinois in 2009, under a DCEO grant managed by MEEA. A protocol from the Building Energy Codes group of PNL will be applied to 44 residences and 10 commercial buildings.

Teaching future Energy Auditors

eZing, with LEED Council workforce instructors, is teaching a new 8 week energy auditing course for the DCEO Urban Energy Auditor program, including curriculum design, mock-ups, BPI testing, hands-on work with local auditors, etc.

More eZing Videos online!

Great tips that just about any do-it-yourself homeowner can perform! Learn how to stop energy waste through your crawlspace, improve healthy air flow through your home, and block contaminated air from your garage. See these eZing “how to” videos, and more produced by Claire Johnson.

eZing Owner's Representative Service Video

"Prop-a-ganza" Session

Cheryl Pomeroy attended the "Prop-a-ganza" session on teaching weatherization using props of actual building conditions. The event took place in Baton Rouge, LA, in September 2011.

DOE Workshop

Cheryl Pomeroy attended a five day DOE workshop for weatherization trainers in Syracuse, NY, September, 2011.

Caulk Has No Lobbyist!

Caulk Has No Lobbyist: “Are Energy Efficiency Incentives Upside Down?”

Our energy audit clients are aware of energy efficiency tax credits and often wonder why the most cost effective measures, such as air seal, do not qualify. I explained this recently to a client by saying “caulk has no lobbyist.” She told me that was a “quotable” and I needed to blog about this. Thanks, Patricia!

While reviewing my energy audit recommendations with Patricia, she asked about placing solar thermal collectors on her roof. She had an old, leaky home, which she plans to renovate and insulate. I told her solar collectors are a marginal investment and air sealing and insulating her home is a top priority. I explained that federal tax credits are available for installation of alternative energy, windows, and heating and cooling equipment but not for installation* of air seal and insulation. The energy efficiency pyramid below generally reflects our recommendations to Patricia which included air seal, insulation, and replacement of a 1949 furnace with a high efficiency furnace. We did not recommend solar thermal collectors, despite the 30% federal tax credit




The energy efficiency pyramid is a helpful guide for the public intended for electricity savings. The actions at the base of the pyramid are where you start and less expensive. The actions at the top are most costly and typically the least cost effective. A utility company “free” energy audits, education, and conservation are at the bottom and alternative energy is at the top. Window replacement is near the top. Air seal is nearer the bottom.

Ranking within the pyramid is not absolute. For example, Virginia Powers’ assessments show that “drain water heat recovery” can produce five times greater savings per dollar installed cost than its neighbor “solar thermal.” http://gfxtechnology.com/tests.html Furthermore, a gas savings pyramid would be a bit different. For example, high efficient furnaces/boilers would be found at a lower rung than geothermal heat pumps. Paul Knight Home Energy July/Aug “The Chicago Green Bungalow Project.”

Every level of the pyramid leads to a lower carbon footprint. However let’s clarify what we mean when we say that actions at the top of pyramid are less cost effective. Typically, spending a dollar at the top of the pyramid gets a smaller carbon footprint reduction compared to the same dollar spent nearer the bottom, which gets the bigger carbon footprint reduction per dollar.

The Pyramid generally shows what energy experts know from energy modeling and studies of weatherization work. Air sealing a home is typically the biggest bang for your buck, followed by insulating un-insulated attics and walls, and by efficient heating and cooling equipment. One under-appreciated aspect of air sealing is duct sealing, typically as good as air sealing on the pyramid. Another piece that is missed in the 2008 pyramid is a professional energy audit. “Building diagnostic services” is included in the 2011 version at the base rung of the pyramid. With a diagnostic audit, homeowners can address with confidence the critical air seal locations in their home. Michael Blasnik ACI Conf 2008 “Prioritizing Energy Savings: What’s Important.”

A comparison of federal energy efficiency tax credits and the pyramid leads one to wonder if the federal government has the efficiency pyramid upside down. Diagnostic energy audits and air sealing work have no tax credits but solar panels and backyard wind turbines do.

Federal Energy Efficiency Tax Credits for Consumers, 2011

Existing Homes
(10% of cost, up to $500)
• windows and doors
• insulation
• roofs
• water heaters (non-solar)
• hi efficiency furnaces/boilers

Existing Homes & New Construction
(30% of cost with no upper limit through 2016)
• geothermal heat pumps
• solar panels
• solar water heaters
• small wind energy systems
• fuel cells

All measures listed include install cost, except insulation.

I am sure to get comments if I don’t mention the “cash for caulkers” program which was part of the ARRA federal stimulus (2009-10). The “cash for caulkers” money went to weatherization work for low income families and included initial and final energy audits; air seal, insulation, and HVAC work. Middle income households during 2009 and 2010 qualified for 30% energy efficiency tax credits up to $1500 which did not include air seal work or an energy audit. Air seal work and energy audits are still excluded.

*Insulation materials, not their install cost, are covered by tax credits. Air seal work is not covered at all.