using energy audits

Home energy audits assess current levels of energy consumption and provide the basis for recommendations on cost-effective solutions to improve home energy efficiency. Some audits result in home energy performance ratings, which serve as a tool for comparing home performance or qualifying properties for home financing products. In other cases, an audit serves as a prerequisite for a larger incentive program.

For example, the Cape Light Compact, serving Cape Cod, Massachusetts, offers rebates and incentives to improve home energy- efficiency after property owners verify that their home has received an approved energy audit. (Learn about rebates and other incentives for homeowners to improve energy efficiency.) Audits may also be used to verify that improvements have been undertaken to meet the criteria specified by energy and green building rating systems.

Click on the links below to learn more about how energy audits may be used:

Photo credit: Chris Palladino

Identifying opportunities for improving efficiency

As noted throughout this section, a home energy audit functions mainly to identify areas in which home energy efficiency could be improved. While homeowners and managers of multifamily properties may not always choose to implement all of the recommendations specified in the audit report, they can at least understand the areas of greatest energy loss and undertake a few steps that fit within their budget or offer the greatest payback.

Home rating systems

Home rating systems quantify the energy efficiency of a home using data collected during energy audit diagnostic tests. An audit that results in a home rating goes one step farther than a standard home energy audit: In addition to suggesting opportunities for improving energy efficiency, this approach results in a "score" that is often tied to home financing eligibility.

The non-profit Residential Energy Services Network (RESNET) developed the most recognized and widely-used rating system standard in the U.S., the Home Energy Rating System (HERS). A HERS score may be generated for new or existing homes using data collected during an energy audit conducted by a RESNET-accredited professional. Following the audit, homes receive a score between one and 100 depending on relative efficiency, and are then rated accordingly, with one star representing a very inefficient home and five stars indicating high energy efficiency. An energy rating report includes the HERS score and star rating, as well as suggested improvements to increase energy efficiency, the estimated cost of the improvements, and projected annual savings. According to RESNET, an average energy rating cost consumers approximately $490 in 2009. [1] Some jurisdictions provide assistance to cover the costs of a home rating.

Certain home financing mechanisms require an energy rating report as part of an incentive or loan package. For example, some energy efficiency mortgages (EEMs) require ratings that enable the lender to factor into the loan amount the estimated costs of implementing recommended energy efficiency improvements. Home energy ratings may also allow property owners to qualify for special rebates, tax credits, energy improvement loans, and other financing tools tied to home energy efficiency improvements. Learn more about energy-efficient mortgages and other financing tools to increase home energy efficiency.

Home energy rating systems also provide a standardized measure that allows consumers to compare home energy performance among different residential buildings, building consumer awareness about energy efficiency and providing a benchmark similar to the miles per gallon (MPG) standard used to measure automobile performance. The Energy Trust of Oregon, a nonprofit dedicated to green and sustainable building, developed the Energy Performance Score (EPS) which allows for easy comparison of homes relative to their energy efficiency, carbon impact, and utility costs. The Energy Trust actually provides a pair of scores that indicate home energy consumption and carbon emissions; the tool also calculates estimated monthly utility costs. Currently, the EPS is used in Oregon and is being expanded to evaluate home energy performance in additional geographical regions. Click here to leave this site and read more about the EPS, or learn more about efforts to tie home energy performance to marketing and real estate listings.

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Benchmarking energy use

Energy benchmarking differs slightly from traditional energy audits, which use on-site analysis of a building's systems and condition to assess the potential for performance-improving retrofits. Instead, energy benchmarking enables property owners to track and compare properties' energy consumption over time. It is important to track usage as opposed to simply tracking cost because both year-to-year temperature differences and changes in fuel costs can mask major changes in the energy-efficiency of a property's operations. With this information, the owners and managers of multifamily buildings can assess energy usage at a property to determine whether there has been a change that would justify investigating its cause.

Tracking usage also provides an opportunity to compare the property's operations with peer properties or other properties owned and managed by the same entity. The availability of the data allows owners and managers to prioritize and plan for energy-efficiency improvements, and measure and verify the impact of retrofits.

The benefits of these data collection efforts, however, are not limited to individual property owners -- a key goal of collecting energy data is also to generate a comprehensive national database documenting the payoffs associated with certain energy-efficiency improvements, in order to support the development of low-cost financing products for energy-efficient retrofits. Absent this supporting evidence, lending institutions may be reluctant to create financial tools that depend on as-yet insufficiently documented benefits. The data collected will also be instrumental in enabling policy makers to quantify the impact of energy retrofits to the privately-assisted HUD portfolio. Issues such as split incentives, utility allowance calculations, and budget-based rent-setting can best be addressed when the financial impact of potential program modifications are known.s

Several software tools and web-based applications have been developed to help property owners monitor and manage energy use data. EnergyScoreCards, offered by Bright Power, Inc. in partnership with Stewards of Affordable Housing for the Future (SAHF), and New Ecology's WegoWise are among the software tools available. These tools provide at-a-glance details on overall building performance and fuel use, including a summary performance score that may be compared across properties. Energy Star Portfolio Manager, offered by the US EPA, is another tool available to building owners and managers to assess the performance of multifamily properties. (Learn more about tools for do-it-yourself energy analysis.)

From a policy perspective, as usage of these tools becomes more widespread -- ideally, before it becomes more widespread -- it will be important for the companies and organizations offering these products to agree on a common protocol for data collection and measurement and a set of minimum data fields for inclusion.
In 2010, the National Housing Conference  hosted the Partners in Innovation preservation forums, a series of three regional forums focused on strengthening and supporting affordable rental housing preservation efforts through innovative partnerships, policy development, and legislative reform. The regional forums took place in Boston, MA; Portland, OR; and Denver, CO in 2010.

View the following presentations from the Partners in Innovation: Preserving Affordable Rental Housing Through Energy Conservation in Boston on April 14, 2010.

With a broad-based pool of information, created by consolidating performance data collected by various providers of benchmarking tools, lenders and other financial institutions will be better able to assess the risk and pay-offs associated with different energy upgrades in a wide array of building types and settings.

The cost of data collection is directly related to the number of meters for which data is collected and the manner in which the data is input into the software tool. Data is obtained in one of three ways: electronically "scraping" the data from the utilities' websites, using a third-party bill processor to put the data into a digital form, or manually entering the data from the utility bills. From a practical perspective, master-metered multifamily properties present an easier opportunity to implement energy performance benchmarking than individually-metered properties, because of the number of meters and the requirement that tenants consent to the utilities' release of tenant energy use data. Some managers have started to include a standard clause in their leases that gives the property owner consent to collect individual data from utilities; even with this consent, however, some utilities may be unwilling to honor requests for information. Policymakers may wish to consider adopting programs or laws that encourage or require utility companies to respond to owners' requests for information.

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Verification and certification of compliance with green building ratings systems and tools

Verification programs rate buildings after improvements have been completed to determine whether they meet an established set of building performance and energy efficiency criteria. Both new construction and retrofits of existing buildings can be undertaken to achieve the criteria laid out in energy rating systems. An audit determines whether those standards have been met.

Secondarily, programs that label homes as LEED- or ENERGY STAR-certified, for example, have the capacity to raise consumer awareness of - and interest in - energy-efficient buildings and potential cost savings. Homes that have been certified as "proven" to meet energy performance standards may also attract more consumers than non-verified or conventional homes. Learn more about commonly-used energy and green building rating systems.

Ratings systems and tools may also be incorporated into building codes to fulfill local regulatory performance requirements that aim to improve energy efficiency and reduce overall greenhouse gas emissions. For example, in August 2008 the City of San Francisco passed the most stringent residential energy efficiency regulations in the nation, requiring that newly built or renovated residential buildings with four or fewer dwelling units meet the GreenPoint rating system. Newly developed high-rise residential and commercial buildings must be built according to LEED standards. [2]
Solutions in Action
Since 2007, the Tri-State Residential Energy Program, representing parts of Kansas, Missouri, and Illinois, has awarded rebates for over 400 energy audits to be performed in accordance with the Home Performance with ENERGY STAR program.

In 2007, the Tri-State Residential Energy Program received a grant from the Department of Energy to provide $600 rebates to households that performed a certified energy audit, implemented recommended energy improvements, and performed a post-installation audit to comply with Home Performance with ENERGY STAR protocols. The rebate program was expanded in 2009 to include households that performed improvements to the home envelope - the outer walls, ceiling, windows, doors, and floors - which were eligible for $1,200 rebates for pre- and post-improvement audits to homes. Click here to learn more about the Tri-State Residential Energy Program.

In other cases, communities offer incentives for developers to build homes that meet verification program standards. For example, in Arlington County, VA, officials offer density bonuses to developers that build homes in accordance with LEED standards.

The City of Cincinnati, OH offers 100 percent property tax abatements for homes that are LEED certified. The abatement for newly constructed single-family homes that meet LEED standards expires after fifteen years. Existing single-family homes can qualify for tax abatements of ten years, but since LEED for Homes requires gut renovations of existing buildings, the program is less feasible for existing single-family development. Multifamily buildings over four units are treated as commercial properties, which are automatically offered abatements of twelve or fifteen years for existing building renovations and new construction, respectively. According to city staff, as of May 2010, 26 newly developed homes are receiving tax abatements through this program. Click here to learn more about Cincinnati's Residential Property Tax Abatement for Green Buildings program.

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How are energy audits used?
Some audits result in home energy performance ratings, which serve as a tool for comparing home performance or qualifying properties for home financing products. In other cases, an audit serves as a prerequisite for participating in incentive programs.

Other pages in this section:

Who conducts audits?
Depending on the amount of money a home- or property-owner is willing to spend and the level of detail desired, residents and property owners can conduct a home energy analysis; for a more thorough audit, property owners can hire certified professionals.

How much does an energy audit cost and who pays for it?
Property-owners can conduct do-it-yourself energy analysis at little to no cost, while professional home energy audits are typically conducted on a fee-for-service basis.

[1] National Average Cost of Home Energy Ratings. [PDF] 2009. Oakland, CA: Residential Energy Services Network
[2] "Newsom Signs Strict Green Building Codes into Law."
Aug. 5, 2008. By Wyatt Buchanan. San Francisco Chronicle.