Money Talks at FREE Conference

The conference began with representatives from all sides of the industry voicing what they felt needs to happen to make energy-efficient financing work. Lenders want a consistent rating system that does not delay the mortgage process, and assurance that the secondary mortgage market (Fannie Mae and Freddie Mac) will buy these loans. Realtors don't know much about energy efficiency, but they don't want another step added to the home buying process--especially a potential deal killer. Builders want voluntary programs that add market value and increase sales. Utilities are concerned about competition entering their industry and want to satisfy customers' energy and environmental needs while generating funds. Governments want voluntary programs that create energy-efficient homes that burn less fossil fuel.

Energy-efficient financing is possible because energy-efficient houses cost less to operate. This leaves homeowners with more disposable income, so they can afford to pay off a bigger mortgage or loan. Many energy mortgages give buyers a "stretch," so those who would not normally qualify for financing can, and those who did qualify can finance a more expensive home.

"We need to stop drowning homeowners in acronyms, and start explaining the benefits of energy efficiency in terms they can understand, like comfort and the almighty dollar."

So why aren't more homeowners involved? Conference attendees blamed the industry. Speakers kept returning to the same theme: instead of drowning homeowners in acronyms, we need to understand their concerns and explain the benefits of energy efficiency in terms they can understand, like comfort and the almighty dollar.

One of the lenders' main concerns regarding energy-efficient financing is how to tell whether a house is really energy efficient, especially compared to other houses. The U.S. Department of Energy (DOE) is creating national guidelines for home energy ratings, but in one session, John Reese of DOE revealed what everyone pretty much knew--that DOE isn't going to publish its guidelines anytime soon. Michael Holtz of Boulder, Colorado's Architectural Energy Corporation outlined what the home energy rating industry should do for now. He recommended creating local HERS with specific goals in mind, making HERS profitable, and developing a system that doesn't slow down the home-buying process. Providers need to be responsible for guidelines and accreditation.

Different states are experimenting with local ratings and processes, with a wide variety of policies. For example, in Florida, raters are trained through the Building Energy Efficiency Rating System program, better known as BEERS. Florida raters aren't allowed to provide the energy efficiency retrofit services they recommend--it's considered a conflict of interest. But in Ohio, it's accepted for raters to provide improvements, because they are the most qualified.

Several software packages are available to help rate homes. Once a rater has gathered information, the software helps process it and rates the home. Ron Judkoff of the National Renewable Energy Laboratory (NREL) led a roundtable session that allowed participants to use five different software packages that NREL has tested against DOE-2, SERIRES, and BLAST-3.0 (the most advanced building systems software available) for accuracy and predictability. NREL cannot release the results, but manufacturers know how their products did. Judkoff recommends that before you buy a software package, you should ask the manufacturer how it did in the test.

Steven and Chris Lowrie of the National Home Energy and Resources Organization (National HERO) have developed a home energy ratings program that began in Virginia and now provides services across the country. The group has done some regional TV advertising and has discovered that people like to have a nonprofit organization running these programs. They have also found room for education, since their viewers have been interested in blower door tests, but not in duct pressurization.

Philip Fairey of the Florida Solar Energy Center presented a study on 423 homes that were built and rated between 1991 and 1993 and found that ratings successfully predicted energy use and cost in these homes. While occupant habits still control home energy use, it is possible to determine incremental differences between higher- and lower-rated homes. Fairey has found that while a code compliance inspection can't be used as a rating, a rating can be used to show code compliance.

Michael Myers of DOE discussed the need for communities to address energy issues the same way they deal with crime and public health. Communities decide how housing grants are to be spent. If people involved in building energy-efficient homes speak at local board meetings, they can influence the type of housing that gets built. Most mayors and members of planning boards don't understand energy-efficient building practices, so getting involved can be a powerful way to change communities and promote such practices.

For further information on the HERS council conference, contact Elise G. Rand, Director of Communications, HERSC-FREE, 1511 K St. NW, Suite 600, Washington, DC 20005. Tel:(202) 638-3700 x201; Fax:(202)393-5043.

--Mark O'Sullivan

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