Advancing large-scale home energy labeling and harmonizing the disparate energy scoring programs that have evolved in the past decade, require a targeted evaluation of effective programs and the factors that have led to their success. What programs are in place now—and what does that tell us about the possible adoption of mandatory or voluntary building labeling in a country with 50 unique states?
This section offers case studies across nine jurisdictions and gives State Energy Offices and other decision-makers information on home energy labeling best practices and tools. These case studies cover characteristics of current programs, several of which are still evolving. The list presented here is a representative, not exhaustive, look at the state of home energy labeling program implementation in 2017. Case studies are listed in alphabetical order under the categories of Mandatory and Voluntary.
Existing home energy labeling strategies include:
- mandated utility bill disclosures at time of sale
- independently designed asset ratings,
- other data to help homeowners, real estate professionals, and homebuyers obtain comparative energy performance information about residential properties
By and large, the market has driven the development of these tools, serving the interests of early adopters of home energy labeling. Many state energy programs and utility programs have picked them up as they emerged, using them to help satisfy state energy reduction goals.
In the past several years, State Energy Offices and the U.S. Department of Energy (U.S. DOE) have recognized a need to harmonize these programs across the country. Consistent labeling practices will lead more quickly to improved energy efficiency performance of the nation's housing stock. We refer to the adoption of such practices, and the resulting disclosure of energy information that can affect the overall market value of U.S. homes, as market transformation.
Since the last comprehensive policy review of residential energy labeling,[1] several significant developments have occurred. Multiple jurisdictions considering mandatory or voluntary building energy labeling programs have chosen to use DOE’s Home Energy Score as a standard metric, although those same jurisdictions usually allow other metrics in addition to or in lieu of the Home Energy Score, and not all jurisdictions use or are considering using DOE’s Home Energy Score as the primary metric in building energy labeling programs. For more information on DOE’s Home Energy Score program, please click here.
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Voluntary Home Energy Labeling Programs and Policies
Mandatory Home Energy Labeling Programs & Policies
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Voluntary Home Energy Labeling Programs and Policies
Case Study 1: Colorado
Linking the Home Energy Score to Incentives at Point of Sale or Refinancing—with Oversight
Colorado was the second state (after Connecticut; see Case Study 2) to adopt a statewide Home Energy Score program (2015). The Better Buildings Colorado program, under the administration of the Colorado Energy Office, targeted real estate professionals in implementing the benefits that a Home Energy Score can bring to buyers wishing to sell a high-value home, and to sellers wishing to purchase a high-efficiency home. The decision to become a Home Energy Score partner was largely based on the conclusion of a valuation study which found that appraisers need more reliable and accessible information about energy features, characteristics, and operating costs of homes in order to properly value a listing. Home Energy Score checked those boxes.
The State endeavored to not only support the supply of Home Energy Scores by building a network of qualified assessors, but also to create demand for the Score at the time of sale from real estate agents and homebuyers. Colorado funded pre-requisite building science training for aspiring Home Energy Score assessors as well as training for home inspectors and energy auditors to become qualified assessors. The State piloted a consumer marketing campaign aimed at motivating new home buyers to get a Home Energy Score and to talk to an energy advisor about how to implement recommended improvements. Continuing education classes taught real estate agents about the Home Energy Score and the value of energy efficiency.
Colorado also invested in the technology infrastructure to support labeling using Home Energy Score. The State worked with two residential energy audit software providers, which together covered most of the audit programs in the state of Colorado, to integrate their application programming interfaces with the Department of Energy’s Home Energy Scoring tool. This enabled assessors to easily generate scores for every audit they completed.
To motivate buyers, sellers, or homeowners wishing to refinance their dwellings, Colorado also tied the Home Energy Score to its Energy Saving Mortgage Incentive, offering $750 for every one-point improvement the buyer makes on the Home Energy Score—up to $3,000 credited to the homeowner’s principal mortgage, for a four-point jump. Thus, the State played both an oversight and facilitation role in encouraging lower energy use in homes. Although these limited-time programs have ended, the State’s efforts in advancing Home Energy Score have enabled other entities to launch and maintain their own Home Energy Score partnerships.
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Case Study 2: Connecticut
Integrating Home Energy Scores into Utility Programs: Connecticut
In 2013, distribution utilities and the Connecticut Department of Energy and Environmental Protection (DEEP) agreed to work together to collect data and use DOE’s Home Energy Score in the state’s Home Energy Solutions Program. This is part of the wider Energize Connecticut initiative.
The statewide effort began in 2015 and is funded through the Connecticut Energy Efficiency Fund, which supports Energize Connecticut, an information clearinghouse that helps consumers save money on their energy use. The goal of the program is to improve the existing housing stock. One objective within the policy is to increase the “conversion rates” of home energy audit participants. Instead of just receiving an energy assessment, the goal is to increase the number of home energy audit participants that follow through on recommended energy upgrades.
The Connecticut approach involves more than just an audit and a score. The first visit includes direct measures such as sealing air leaks and installing energy-efficient lighting, faucet aerators, and low-flow showerheads. The energy value of these services is then quantified, and the report contains payback estimates and a list of additional opportunities for energy improvement projects. This process unlocks utility efficiency rebates, and produces a final score reflecting any improvements that have been completed.
To date, the program has scored more than 30,000 homes; its objective is to score 11,000 each year, and it is using the Home Energy Score to track progress toward meeting the state’s weatherization goal (80 percent by 2030).
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Case Study 3: Massachusetts
Home MPG: Integrating Scorecards into Mass Save®
From 2012-2014, the Massachusetts Department of Energy Resources (DOER), along with several utilities, efficiency program providers, the Earth Advantage Institute, and other partners, implemented an initiative called “Home MPG”. Funded by a U.S. Department of Energy grant[1], Home MPG (adopting the terminology of the familiar “miles per gallon” rating system) integrated energy performance scorecards into the existing statewide energy efficiency program (called Mass Save®) in eight Western Massachusetts communities.
The Massachusetts home scorecard used in Home MPG presented two primary metrics: the home’s energy performance score (EPS), expressed as the expected total energy usage in one year (in units of MMBtus), and the home’s carbon footprint, expressed as tons of CO2 emissions per year. The scorecard provided the home’s current energy performance score and carbon footprint, as well as what those metrics would be if recommended cost-effective efficiency upgrades were made (i.e., the home’s current state versus the potential it could readily achieve). The scorecard also provided the EPS and carbon footprint of an average home in the area as a motivational point of reference. Both the EPS and the carbon score were asset ratings (i.e., based on an energy model of the home’s physical characteristics rather than on occupant behavior.)
Home MPG provided 3,866 scorecards to homeowners via Mass Save home energy assessments. Over 1,600 of those homeowners completed home efficiency projects; those homeowners also received an updated scorecard showing the improvement in the home’s energy performance. Response to the scorecard was favorable: based on a homeowner telephone survey, 98% of homeowners stated that the scorecard was either very or somewhat useful, and all of the homeowners who recalled receiving a scorecard (84% of homeowners surveyed) said that the scorecard was either very or somewhat easy to understand. In addition, several energy specialists who conducted Mass Save home energy assessments and provided the scorecard were in favor of integrating it into Mass Save statewide.
Home MPG also provided training for residential real estate brokers and appraisers. A total of 102 real estate brokers and 62 appraisers received training on the concept of home energy performance and how performance metrics can be integrated into the residential real estate sales and appraisal processes. The course developed during Home MPG was accredited for continuing education credits for brokers in Massachusetts, and continues to be taught today.
Home MPG was an important initial step towards a Massachusetts residential real estate market that appropriately values energy performance. In April 2018, Massachusetts Governor Charlie Baker filed proposed legislation, An Act Relative to Consumer Access to Residential Energy Information, that would require a home energy scorecard and energy rating to be provided to homeowners as part of Mass Save residential energy efficiency assessments, and after January 1, 2021, would require that home energy performance ratings be made available to potential homebuyers when one to four unit family homes are publicly listed for sale. More information can be found at https://www.mass.gov/news/baker-polito-administration-files-legislation-to-improve-residents-access-to-home-energy and the text of the proposed legislation is at https://malegislature.gov/Bills/190/H4371.
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Case Study 4: Missouri
Using a Certified Recognition Program to Promote Home Energy Labeling
Missouri offers no programs using public-purpose funds to encourage energy efficiency or renewable energy installations, although its distribution utilities annually budget for promoting energy efficiency ($103.9 million in fiscal year 2018, for example). It also has no statewide energy codes[2]. To make progress on home energy improvements, the Missouri Division of Energy (under the Department of Economic Development) began administering the Missouri Home Energy Certification program in 2015, which uses meaningful recognition to promote the existence of energy-efficient homes.
The certification supports the results of a national household poll (The Demand Institute, 2014), on consumer perspectives about home buying. That study concluded that energy efficiency was a top priority among potential homebuyers—a conclusion the state cited as a “win-win” for giving homeowners an additional “selling point” and conveying the value of home energy use to potential buyers.
Two levels of certification—gold and silver—are possible. Missouri uses several rating systems to qualify homes: Home Energy Score, RESNET’s Home Energy Rating System (HERS), and ENERGY STAR. The Division of Energy has begun to work with the distribution utilities to align their energy efficiency programs with the certification effort. The Division plans to work with real estate professionals (agents, inspectors, and appraisers) and homebuilder organizations to increase their knowledge and awareness of the certifications. The Division also intends to promote the availability of modeling software for home energy auditors, so that they can accurately calculate energy savings from installed energy efficiency measures, after they complete projects for their customers. The resulting scores inform qualification for various tiers of Missouri Home Energy Certification.
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Case Study 5: New Jersey Natural Gas
Using an Equipment Program as the Entry Point for Scoring, and for Home Performance Projects
As of 2016, New Jersey Natural Gas had scored more than 13,000 homes since 2012 through its SAVEGREEN Project®, a utility-wide effort for New Jersey Natural Gas customers offering rebates and incentives to make energy improvements. It reached this target primarily through its appliance rebate program, through which homeowners who install qualifying equipment become eligible for a free home energy assessment that includes a Home Energy Score.
The goal of the assessment is to encourage follow-on participation in the Home Performance with ENERGY STAR (HPwES) program and ultimately installation of other energy improvements. The auditor uses the Home Energy Score as the cornerstone of the customized report for homeowners, with recommendations for making a home more efficient (with an estimate of a revised Home Energy Score if the homeowner follows through with energy improvements). The SAVEGREEN Project also makes up to $15,000 in financing available for HPwES projects, including a 0 percent annual percentage rate with on-bill repayment.
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Case Study 6: Oregon
Legislating a Statewide Framework for Home Labeling
Oregon has a voluntary home energy performance scoring administrative rule drafted and maintained by the Oregon Department of Energy. If energy performance scores are issued in Oregon they must follow these rules.
Oregon legislation in 2009 and 2013 required the Oregon Department of Energy to establish rules for energy performance scoring. The rule and its implementation is reviewed, refined, and informed by a stakeholder panel. Oregon Administrative Rules specify what is required for residential and commercial energy performance scores, and include training requirements for licensed home energy assessors, and requirements for score systems.
DOE’s Home Energy Score is the approved modeling engine for residential performance scoring in Oregon. The legislation and subsequent rulemaking gave local communities a framework for creating other home energy scoring programs (currently offered by Eugene Water and Electric Board and city of Portland). Oregon Department of Energy is a DOE Home Energy Score partner. The state is also currently seeking assessors and systems that can deliver residential scores statewide.
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Case Study 7: Vermont
Reaching Consensus with Real Estate Professionals on Including Score Information at Time of Sale
Vermont adopted the Home Energy Score as a component of the state’s voluntary labeling program in 2015. From 2015 to 2018, the state offered the Vermont Home Energy Profile, an independent summary of a home’s energy efficiency, measuring estimated annual energy use and annual energy costs, and offering a Home Energy Score. Vermont developed an innovative approach to encourage sharing of home energy information at time of sale. Building on the relationships and trust developed between the energy efficiency and real estate industries collaborations on education and training on energy topics, Vermont Realtors®, the trade association representing Realtors® in Vermont, proposed to voluntarily provide their buyer and seller clients with a two-page informational pamphlet on home energy use.
The “Home Energy Information Pamphlet ” was designed to be provided to home buyers as part of the Purchase and Sales Agreement process. The Pamphlet provides general home energy information to buyers including: typical Vermont energy costs, an overview of Vermont’s home energy label, and resources for next steps and home energy upgrades. The Pamphlet approach was suggested by a real estate agent and was based on a similar approach that was already in place for the Vermont Department of Health’s “Testing Drinking Water from Private Water Supplies” handout, which is required to be provided to buyers at the time of Purchase and Sales Agreement signing for homes with a drinking water well.
To ensure that real estate clients receive the Pamphlet, the real estate information document system, Dotloop, now includes a check-box reminding Realtors® to provide the Home Energy Information Pamphlet as part of the Purchase and Sales Agreement process as well as a PDF file of the two-page Pamphlet. In addition, Vermont Realtors® updated the Sellers Property Information Request (SPIR) to provide better information about the energy features of a home to prospective buyers. Both the Home Energy Information Pamphlet and SPIR updates went into effect in July 2017.
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Case Study 8: Bay Area Regional Energy Network (BayREN)
Home Energy Score in the Bay Area
The StopWaste Home Energy Score program is offered in the San Francisco Bay Area in partnership with the Bay Area Regional Energy Network (BayREN). The program launched in fall of 2015 and is funded by California rate payers and the California Public Utility Commission. The BayREN Home Energy Score program has issued approximately 1,900 scores in the Bay Area, with about half of the scores issued in the City of Berkeley, CA as a result of the Building Energy Savings Ordinance (see Case Study 10 for more), and the other scores distributed throughout the nine counties served by BayREN. Outside of Berkeley, a rebate of $250 is offered to obtain a Home Energy Score, and participation is largely driven by energy efficiency assessors who mostly offer the Home Energy Score to customers for free.
The goal of this program is to drive energy efficiency upgrades and to serve as an “onramp” to other energy efficiency programs offered by BayREN such as Home Upgrade and Advanced Home Upgrade, and efficiency programs operated by Pacific Gas & Electric (PG&E), the electric and natural gas utility for the area. Once a homeowner has received a Home Energy Score, an Energy Advisor service, also supported by BayREN, contacts the homeowner to provide follow up and recommendations for upgrades.
Challenges this program has encountered are tracking the participation of score recipients in energy efficiency programs offered by PG&E. BayREN and the City of Berkeley have been unable to access participation data due to privacy protections. The program has also modified the standard DOE homeowner recommendations to address California’s energy efficiency code requirements and the long payback period in mild climate zones.
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Mandatory Home Energy Labeling Programs & Policies
Case Study 9: Austin, Texas
Using an Ordinance to Support Climate Action Goals
Austin, Texas, was an early adopter of an Energy Conservation Audit and Disclosure ordinance (ECAD, 2008) requiring ratings and disclosures. Among other characteristics, it requires energy audits and disclosures for homes and apartment complexes served by the local utility (Austin Energy) and located within Austin’s city limits. The objective of the requirement is to prompt action on energy savings.
For single-family homes (1-4 units), ECAD is required at time of sale and requires sellers to complete an energy audit if a home is more than 10 years old. The seller must disclose the results of the audit to potential buyers and to any real estate agent acting on behalf of the seller. Noncompliance, a Class C misdemeanor, involves fines from $500 to $2,000.
All ECAD energy audits must be performed by qualified ECAD Energy Professionals, who must be either certified Residential Energy Services Network (RESNET) Raters or Building Performance Institute (BPI) Building Analyst Professionals. The audits include performance testing and typically cost $200-300 for a single-family home. The energy audit includes information on insulation levels, air leakage, heating and cooling equipment, windows, and opportunities to improve home efficiency. Notably, the ECAD audit report does not include a score such as Home Energy Score or HERS.
ECAD supports the City’s ability to meet its Climate Protection Plan goals—among them, offsetting 800 MW of peak energy demand (by 2020) and reducing the city’s carbon dioxide emissions by at least 365,000 metric tons by that date.
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Case Study 10: Berkeley, California
Mandating a Time-of Sale Label for Homes and Other Buildings under 25,000 Square Feet
The Berkeley Building Energy Saving Ordinance (BESO, 2015) requires homeowners and owners of buildings of up to 25,000 square feet to complete comprehensive energy assessments at time of sale. BESO also requires that large commercial and multifamily buildings submit annual benchmarking and complete an energy assessment once every 5 years. Buildings less than 600 square feet and individually owned units within a larger building are exempted at time of sale.
Single-family homes (1-4 units) are only subject to BESO at time of sale. The City keeps an online list of properties consumers can look up, to check the status of the property in question. There are several compliance steps, deferrals and exemptions pertinent at time of sale, including ability to defer responsibility to the buyer for up to 12 months. To comply with the ordinance, the owner must hire a registered, qualified BESO Energy Assessor. The completed assessment goes to both the customer and the City, with a filing fee of up to $250, depending on the building size. Assessors may use either the Home Energy Score or an Advanced Assessment from Energy Upgrade California®. Public reporting of the energy assessment and disclosure of energy information is required prior to sale.
To encourage owners to complete the energy efficiency recommendations provided in the assessments, BESO assessors provide a list of local energy efficiency programs and resources available to building owners, including financing information. To reward completion of efficiency improvements, a High Performance compliance path is available for those those that participate in whole building efficiency programs, through which the building is exempted from the filing fee and future assessment requirements. Penalties for not meeting the compliance requirements are a $100 fine for each violation of the ordinance, and an additional fine of up to $25 a day (up to $1,000) for the duration of the violation.
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Case Study 11: Montgomery County, MD
Mandating Time of Sale Energy Bill Disclosure
In 2008, Montgomery County, Maryland adopted an ordinance requiring energy bill disclosure for the 12 months prior to the sale of the home, with some exemptions for homes that were unoccupied for all or a portion of the 12 months prior to sale. The seller must also provide the buyer with information approved by the county regarding the benefits of home energy audits and energy efficiency improvements. Early drafts of the bill included a requirement for an energy performance audit prior to time of sale. This language was removed prior to passage of the bill. The requirements took effect on January 1, 2009.
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Case Study 12: Portland, Oregon
Mandating a Time-of-Listing Label, Citywide
In 2017, the City of Portland, adopted an ordinance for mandatory home energy labeling. Starting in 2018, Portland’s Home Energy Score policy requires sellers to obtain a home energy performance report prior to listing their properties. The report must contain the DOE Home Energy Score, and each listing must contain the report. Further, the home energy performance report must be given to prospective buyers who visit the listed home.
The Portland label offers the Home Energy Score, carbon impacts, estimated utility costs, and costs of home energy improvement upgrades. Because the ordinance requires a seller to have a home energy assessment prior to listing the home, the city hopes the energy information will drive sellers to make upgrades. Portland will track their program objectives and report back to city council in 2020.
Portland also convened a group of stakeholders to discuss equity issues, with an objective of determining what burdens might be created as a result of a mandatory labeling policy. Portland determined that the upfront cost of the label was a burden on low-income consumers and for the first year of the program, plans to cover the costs for these sellers. The City will collect data through the first year of implementation (2018), and then determine a longer-term solution to cover these costs.
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Case Study 13: Vermont
Vermont Home Energy Profile
In 2013, Vermont Act 89 required the Vermont Public Service Department (the state’s energy office) to establish a working group to develop an energy label for the state. The resulting program was called “Vermont Home Energy Profile” and run by Efficiency Vermont. The Vermont Home Energy Profile includes three metrics, annual energy usage in MMBtus, Home Energy Score, and annual energy costs. The Home Energy Profile was run as a pilot program in 2016 and 2017. The pilot focused on training home performance contractors, home inspectors and assessors, conducting outreach through Realtors and communities, and tested free and market rate prices. The Home Energy Profile has not proceeded out of the pilot.
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[1] Home MPG was funded by a 2.6 million grant/cooperative agreement from the U.S. Department of Energy's Better Buildings Neighborhood Program.
[2] Xu, Ming, 2017. “Missouri Division of Energy: Missouri Home Energy Certification (MHEC).” Presentation at the NASEO Energy Policy Outlook Conference, February 7-10. http://energyoutlook.naseo.org/Data/Sites/13/media/presentations/Popp--Missouri-Home-Energy-Certification.pdf.