Common misconceptions about the Home Energy Score

For more background on what the Home Energy Score is, visit our previous blog post What is the Home Energy Score and why is it in the CCAP?

Why Home Energy Scores?

The Oregon Department of Energy’s 2018 Biennial Energy Report took a deep dive into energy consumers in our state. Unfortunately, Oregon continues to see challenges faced by energy-burdened consumers. An Oregonian is considered “energy burdened” when their household’s energy-related expenditures exceed 6% of their income. In Deschutes County, 15-29% of residents earning 200% or below the Federal Poverty Level are energy burdened. Home energy scores can help consumers better understand a home’s energy efficiency, and identify simple home improvements that can mean big savings for their energy bills. (Taken from Oregon Department of Energy website).

Despite there being an obvious need for more awareness about energy use and energy efficient housing options, there has been a lot push-back on the proposal for a Home Energy Score policy for Bend. There are a lot of common misconceptions about the program–here are a few common concerns we’ve heard about HES. 

Homebuyers aren’t asking for HES. They don’t think this is important.

Just because buyers aren’t currently asking for this, doesn’t mean they don’t care—it means that they just don’t know about it yet. Considering energy use in the lifetime costs of homeownership has historically not been something that has been considered when buying a home. This is an important piece of the conversation of homeownership that has been missing that has left many in Bend searching for solutions to reduce $500/month winter energy bills. For those that do appropriately factor energy costs into their budget, think of the extra buying power that homebuyers could have when utility bills are reduced by hundreds of dollars each month.

Requiring an HES slows down the home-selling/buying process.

There is no evidence that energy disclosure disrupts the sale process. In Austin, where home energy audits have been required for ten years, realtors say the policy has not harmed the market in any discernible way. These types of policies usually require that a HES is required at the time of listing, not at the time of sale so it does not slow down the closing process. The actual audit to get a score takes about 1 hour. Timing to generate the report will vary depending on the assessor and could take a few days—this will be important ask when you are scheduling the assessment so you choose your assessor accordingly.

There aren’t enough assessors to do the work

It is true that there currently only a handful of businesses in Bend that could perform the audit to give a home an HES. However, it is something that home inspectors can easily get training in and expand what they offer for services. There are also currently businesses that verify buildings for new construction energy efficiency programs that could easily perform HES assessments on existing homes and many will be required to be trained in HES to be in compliance with the programs they currently work with. In Portland, new businesses have formed to meet the rising demand for services.  Earth Advantage has created a “Roadmap” to becoming an assessor that outlines the process for becoming approved to issue HES.

Energy audits are expensive

There are varying levels of information that can be collected during an energy audit or energy assessment. It is estimated to take about 1 hour to collect the 40 points of data that are needed to generate a score. It is estimated that the cost of an HES audit will be about $200, and we expect the price to go down after HES goes into effect. In Austin, where audits are required, the cost of an audit quickly fell to $125 as demand for audits rose. In the Portland market, audits are averaging about $150.

HES makes housing unaffordable

• Knowledge is power, and home energy scores give home buyers more knowledge about the costs of operating the home they are buying. Energy costs can be a substantial monthly expense, especially for low-income households. You wouldn’t buy a car without knowing the miles per gallon. HES puts homebuyers in the drivers’ seat by revealing the full costs of home ownership.
• Without HES, home energy performance remains hidden from both sellers and buyers – which doesn’t benefit anyone. Hiding home energy information certainly won’t make housing more affordable and isn’t smart policy. In fact, we think this “heads in the sand” approach is especially harmful to lower-income homebuyers, who stand to benefit the most from greater knowledge about the costs of home ownership.
• The vast majority of home sellers will be able to afford the cost of a home energy audit. For those that cannot, the City will work identify ways to cover the upfront cost of the assessment.
• HES’s benefits to all homebuyers, and to the community’s climate action goals, far outweigh any risks. For the small number of home sellers that may have difficulty complying with HES, exemptions and assistance programs can be developed to alleviate the hardship for those residents. On the whole, HES has substantial benefits to homebuyers and to the community as a whole.
• Housing affordability is primarily a function of supply and demand. Bend faces a supply shortage. Home energy scores are information policy that do not affect the supply of housing.
• In harder economic times, HES will have even more benefit to homebuyers. When times are tough, it is more important to understand the full cost of owning a home.

The Home Energy Score unfairly impacts poor people who may own sub-standard housing and their homes will be worth less on the open market

• It’s not true that all lower-income homeowners will receive lower home energy scores. Home energy scores take many factors into account, including home size and total energy use. In fact, it’s bigger, luxury homes with high energy consumption (think hot tub and air conditioning!) that are likely to receive lower scores.
• Getting a home energy score will help lower-income borrowers access special mortgage products, helping them finance energy efficiency improvements. The scoring tool we propose to use (US DOE’s Home Energy Score) gives low-income borrowers access to special home energy loans, that will help them improve their home’s energy performance.
  The Bend real estate market is enjoying unprecedented appreciation. Low-income homeowners have benefited from this too.

These kinds of carbon policies don’t really lower emissions

• The policy addresses residential energy use, the biggest source of sector-based emissions in Bend, according to the Community Greenhouse Gas Emission Inventory.
• This policy introduces information that is critical for buyers and renters alike to take action on their energy use. We don’t know what we don’t know and with currently energy consumption and costs masked, most residents have no idea that there is room for improvement in their home.
• This is a long game. This is market transformation that uses a market solution, not a prescriptive regulatory one (we aren’t requiring that energy efficiency improvements be made—just that the information is supplied). It won’t happen overnight, but it will accelerate voluntary energy efficiency upgrades in the residential market over time.
• Early indications from other communities that have scoring policies are that upgrades do follow disclosure. In Austin, as a result of energy disclosures, six percent of homes undertook energy upgrades. Commercial disclosure policies in NYC and SF are starting to show reductions in energy consumption.

If you think Bend needs a Home Energy Score policy, we encourage you to tell City Council that you think it should be included in the plan. Learn more about writing to City Council and giving public comment at a meeting here.