Getting Started
The following documents were created to help local and state officials interested in implementing home energy labeling programs and/or policies. The Guidebook provides important information about critical steps and elements needed to establish a successful home energy labeling program or policy, while the Key Labeling Components document provides guidance on the information and metrics that should be included on all home energy labels to reduce market confusion and support home energy comparisons."
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Guidebook (pdf)
A guide for state and local governments
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Key Label Components (pdf)
Concepts to evaluate when developing energy labels for homes
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EMPRESS Home Energy Labeling Policy Guidebook: webinar slide deck (pdf)
To learn more and view the recording, please register here.
What is Home Energy Labeling?
Residential home energy labeling refers to programs or policies that provide standardized home energy information, typically to the real estate market. Similar labels already exist in other markets: miles-per-gallon stickers for vehicles, yellow ENERGY STAR labels for appliances, and nutrition facts for food. By providing consistent and comparable information about how homes use energy to the real estate market, consumers can make more informed decisions when purchasing or renting a home.
The above documents focus on asset-based home energy labeling for single-family residential homes. An asset-based label considers the physical assets of a home such as the existing insulation levels, HVAC systems, and hot water systems. Based on these assets and standard weather and occupant assumptions, energy asset labeling software can estimate annual energy use, associated costs, a HERS index score, a Home Energy Score, total carbon emissions per year, and more. Actual energy bills are not used in the calculations of asset-based metrics.
Wide-spread labeling of single-family residential homes is still an emerging effort. To date, the primary approach for generating these labels has been an asset-based approach. For new construction, an asset-based approach is the only option available as there is no operational data to assess. For existing homes, the standard thinking is that an asset-based approach allows building performance to be compared regardless of how the current or previous occupants operate the home. In addition, it normalizes for inconsistent historic weather. This stands in contrast to commercial buildings where the standard approach to rating and labeling has been through benchmarking – the tracking of actual utility bills and the generation of operational-based metrics. While asset-based ratings for commercial buildings are critical to identifying improvement opportunities, they tend to be more costly to implement than benchmarking. Ideally, all buildings would have both operational and asset-based ratings to show how a building is designed, and how it actually performs. However, as a first step, this guidance document focuses on the delivery of asset-based labels for single-family, residential homes.
Jurisdictions identify many desired outcomes for implementing residential energy labeling. These goals include:
- Reducing greenhouse gas emissions and other air pollution
- Reducing emissions to achieve climate goals
- Improving the building stock, particularly in areas that cannot implement an energy code or a stretch code.
Most jurisdictions also expressed an interest in using residential energy labeling to drive energy efficiency upgrades and reduce consumer energy costs.
Energy labels are an effective way to raise awareness of energy use and expenses. Most homebuyers do not realize that on average, energy bills exceed both property insurance costs and taxes. They are frequently an owner’s second largest monthly payment, behind only monthly mortgage bills. In 2015, one in three U.S. households struggled to pay their energy bills, illustrating how high utility costs may force difficult decisions, such as choosing between paying energy bills or buying food or medicine.[1] Providing an accurate estimate of utility bills through a label can help buyers understand monthly costs associated with a new home, and enable them to make better informed decisions about their new home.
Home energy labels also have the potential to drive demand for energy efficiency in new and existing homes. Often, increasing the energy efficiency of buildings is cited as a cost-effective opportunity for state and local governments looking to achieve their energy and environmental goals. In the United States, buildings currently consume about 40% of total energy.[2] In a study published in 2017, the National Renewable Energy Laboratory estimated the economic potential of electricity savings from upgrading the U.S. single family detached housing stock to be 245 terawatt-hours per year, or 22% of electricity used by a single-family detached housing stock in 2012.[3] Addressing the energy efficiency potential of the nation’s housing stock represents a huge opportunity for state and local governments to achieve employment, environmental, and economic development goals. These benefits and others are described in more detail below.
The Benefits of Home Energy Labeling
Cost Savings: Home energy labeling can reduce energy cost insecurity for homeowners and renters by providing annual energy cost estimates and encouraging the improvement of home energy efficiency. By providing information about expected energy costs, home energy labels can better inform residential budgeting activities. By encouraging the improvement of home efficiency, home energy labels can help residents to lower their actual energy bills which are often one of the largest expenses for homeowners, and are a burden that disproportionately falls on low-income home owners and renters. [4], [5] Moreover, when aggregated, residential energy efficiency improvements are expected to reduce overall electric, natural gas, and delivered fuel system costs which will further lower customer bills. In general, lower energy bills give residents peace of mind and reduce energy insecurity, which 1 in 3 U.S. households experienced in 2015.[6] In addition, money that is saved by residents of a community is likely to bolster the local economy rather than flowing to out-of-state electric utilities and energy producers.
Information about the Residential Housing Stock in a Jurisdiction: Improved information on the residential building stock may help support jurisdictions that wish to implement modern building codes, can help inform energy efficiency program designs, and inform estimates of achievable greenhouse gas (GHG) reductions and financial savings from energy efficiency.[7]
Market Transformation: Reliable and transparent energy information from energy labels may allow real estate markets to better account for the value of energy efficiency in a home. This, in turn, is expected to encourage investments in efficiency improvements and drive long-term market transformation. Research has found that home energy rating and disclosure programs result in increased energy efficiency retrofit activity, especially when paired with information on how to access efficiency incentive programs.[8] In addition, Elevate Energy has found evidence that disclosure of energy costs by home sellers results in faster home sales for homes with energy use disclosure in Chicago.[9]
Given an opportunity to show off the benefit of their upgrades with a label, homeowners are more likely to see the value of improving the efficiency of their homes. Visibility into energy use of a home provides a market incentive for building retrofits to improve efficiency, supports progress towards higher performing or net-zero homes, and may create momentum for the adoption of modern building energy codes.
Reduced Greenhouse Gas Emissions and Air Pollution: Residential energy efficiency can reduce the amount of air pollutants emitted by power plants and home heating equipment. A study published in 2016 found that if home insulation levels were increased to the level required by the 2012 IECC[10], it would result in annual reductions of 68,000 tons of NOx and 10,000 tons of SO2, which are Clean Air Act criteria pollutants. The study also found this would avoid the emission of 80 million tons of CO2. Reduction of on-site fuel use in homes would result in annual reductions of 25,000 tons of NOx, 10,000 tons of SO2, and 600 tons of particulate matter (PM2.5), all Clean Air Act criteria pollutants, as well as avoid the emission of 1,300 tons of VOCs and 30 million tons of CO2.[11] Energy efficiency and renewable energy projects provide air pollution benefits to local and regional areas. Both result in reduced reliance on combustion-based energy resources and thereby reduce greenhouse gas emissions, particulate matter emissions and other air pollutants regulated by state and federal air quality standards. Home energy labeling is expected to drive demand for both energy efficiency and renewable energy projects as labels can increase market awareness of energy costs.
Workforce Benefits: Creating a home energy label usually requires a home inspection, audit, or some other type of energy assessment. Such inspections are often performed by local energy specialists such as qualified HERS raters or other certified professionals. By increasing demand for home energy labels, a labeling policy can grow local home energy assessment opportunities. Furthermore, as labels spur homeowners to improve the energy characteristics of their homes, local contractors and vendors are expected to benefit. Home energy retrofits are labor intensive, and require a local skilled workforce to complete the work. Currently, energy efficiency jobs are the largest portion of clean energy jobs in the US, with a recent study finding that there are approximately 889,000 workers who primarily focus on energy efficiency.[12] As the market for energy efficiency improvements grows, it is expected that job growth in this sector will continue.
In summary, increased uptake of home energy labeling in a jurisdiction can support energy, environmental, health, and economic goals, including less obvious objectives such as consumer protection, improved local air quality, as well as enhanced local economic development through the creation and support of home energy retrofits. By providing simple, consistent, and third-party verified information to the market, home energy labels can help market actors make better informed decisions about a home’s energy use. This information, if acted upon, can play a key role in supporting local job growth, economic development, and community health.
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[1] U.S. Energy Information Administration. One in three U.S. households faced challenges in paying energy bills in 2015. https://www.eia.gov/consumption/residential/reports/2015/energybills/. Accessed December 11, 2017.
[2] U.S. Energy Information Administration. Frequently Asked Questions: How much energy is consumed in U.S. residential and commercial buildings? https://www.eia.gov/tools/faqs/faq.php?id=86&t=1. Accessed October 30, 2017.
[3] Eric Wilson, Craig Christensen, Scott Horowitz, Joseph Robertson, and Jeff Maguire. National Renewable Energy Laboratory. Electric End-Use Energy Efficiency Potential in the U.S. Single-Family Housing Stock. Executive Summary. Pg. viii. January, 2017. https://www.nrel.gov/docs/fy17osti/65667.pdf. Accessed October 30, 2017.
[4] U.S. Department of Housing and Urban Development. https://www.huduser.gov/portal/publications/pdf/Trends_hsg_costs_85-2005.pdf. Accessed January 8, 2018
[5] U.S. Energy Information Administration. One in three U.S. households faced challenges in paying energy bills in 2015. https://www.eia.gov/consumption/residential/reports/2015/energybills/. Accessed December 15, 2017.
[6] U.S. Energy Information Administration. One in three U.S. households faced challenges in paying energy bills in 2015. https://www.eia.gov/consumption/residential/reports/2015/energybills/. Accessed December 15, 2017.
[7] Hill et. al. 2016. Ibid. pg. 7-6.
[8] Alex Hill, Jean-Philippe Boutin, Francois Boulanger, Richard Faesy, and John Dalton. Predicting Home Energy Rating and Disclosure Program Impacts for North American Jurisdictions. ACEEE Summer Study on Energy Efficiency in Buildings, 2016. https://aceee.org/files/proceedings/2016/data/papers/7_218.pdf. Accessed October 31, 2017.
[9] Elevate Energy. Chicago Homes that Disclose Energy Costs Spend Less Time on Real Estate Market. April 22, 2014. https://www.elevateenergy.org/chicago-energy-cost-disclosure-homes/. Accessed October 26, 2017.
[10] The IECC is updated every three years, and adopting standards of more recent model code cycles will result in even greater savings.
[11] Jonathan I Levy, May K Woo, Stefani L Penn, Mohammad Omary, Yann Tambouret, Chloe S Kim and Saravanan Arunachalam. IOP Science. Carbon reductions and health co-benefits from US residential energy efficiency measures. March 7, 2016. Accessed December 11, 2017.
[12] Sarah Lehman et. Al. Energy Efficiency Jobs in America. Environmental Entrepreneurs and E4 the Future. December 2016. https://e4thefuture.org/wp-content/uploads/2016/12/EnergyEfficiencyJobsInAmerica_FINAL.pdf. Accessed December 15, 2017.