A new program developed by an American new-home warranty company provides customers with a guarantee that their new ‘green’ homes are in fact going to save them money. Justin Felix reports.

We’ve recently published a number of stories relating to green homes and the empty efficiency promises that new home owners have been buying into.

In this years’ winter edition we also released details of a government review that concluded that mandatory energy efficiency measures in the NCC just aren’t being delivered. And it seems Australia isn’t the only country dealing with the transition to these new homes and the demands for more efficient homes from governments and consumers.

Being an inquisitive bunch, we’re always on the lookout for what’s happening overseas and what approaches countries and companies are taking to make the building industry shine in a more positive light. We found one in the United States.

“Energy efficiency has been a hot subject in the U.S. housing market for years, and home builders have been designing and building increasingly energy efficient homes to stay competitive,” vice president of operations for Bonded Builders Warranty Group Roger Lange says.

“Certifications from private and government organisations and agencies are highly prized, and home buyers use these ratings as one measure when making a home-buying decision. What was missing in that equation was a way to uniformly measure and guarantee a home’s overall energy efficiency. That’s what the Residential Energy Guarantee – in conjunction with the HERS rating system – provides.”

Developed by Bonded Builders Warranty Group (BBWG) – the United States’ largest independent new-home warranty company – the Residential Energy Guarantee® is an innovative marketing tool and valuable consumer service offered to home builders wanting to sell more certified-green homes. This patent-pending program puts financial teeth into builder claims that green homes save money for budget-conscious families.

“The Residential Energy Guarantee is unique in that it guarantees all energy used in a home: electric or natural-gas heating and cooling, as well as all other energy costs from lighting and major appliances right down to can openers and power drills.”

Here’s how the program works: Once a new home has been rated by an approved Home Energy Rating System (HERS) rater and assigned a HERS index, the home’s annual energy usage is calculated. The REG program guarantees to reimburse home owners annually for any energy usage more than 15% above the HERS calculation for a given year. It’s a way for a builder – at no extra cost to consumers – to guarantee home-energy use for up to five years after the home purchase.

Developed in 2006 by the Residential Energy Services Network or RESNET, the Home Energy Rating System (HERS) quickly became the building-industry standard for assessing and rating a home’s energy performance. Based on an inspection and analysis of a new home, a HERS index score is issued, RESNET issues the HERS index score. RESNET describes it as a “miles-per-gallon sticker for houses”, giving prospective buyers and home owners an insight into how the home ranks in terms of energy efficiency. Taken into consideration are such factors as:

– Air leaks in the building envelope
– Leakage from HVAC ducts
– Insulation inside walls and ceilings
– Floors over unconditioned spaces (like garages or cellars)
– Attics, foundations and crawlspaces
– Water heating system and thermostats
– Appliances and lighting

“Heating and cooling a home always has been – and always will be – a major cost of home ownership. And with the cost of energy constantly on the rise, doing so in the most efficient manner possible has become a primary concern. However, predicting those costs was always something of a guessing game without standard measures such as the HERS program used by U.S. home builders.”

While HERS has provided an energy-efficiency benchmark for the industry, it wasn’t until the Residential Energy Guarantee was introduced that budget-conscious home buyers had assurances that energy costs would remain as expected. It still remains a one-of-a-kind program too.

“There are no other home-energy guarantee programs like this,” Roger says.

“It’s a win-win-win proposition for the environment, the consumer and home builders. It’s the first time builders can not only assure consumers that purchasing their new homes can cut their energy costs, they can guarantee it.

“The response from home buyers has been extremely strong. Builders participating in this program report that the Residential Energy Guarantee can be that one extra selling point that makes up a home buyer’s mind whether to make a purchase. And at $250 (U.S.) per home, it’s a small outlay for builders.

“Research shows that 80-90% of new-home buyers are concerned about energy costs and what monthly energy costs will be. That’s why an equal number of home buyers said they would find such a guarantee ‘appealing’. Additionally, more than 80% of home buyers said that such a guarantee would be ‘influential in their decision’ to buy one new home over another,” Roger says.

At the time of writing, there are 54 home-building companies in 13 states across the U.S. using the program to guarantee the energy efficiency of their new homes. The program continues to add builders and expand to new states each month. With such success in the States, there’s potential for the program to work abroad.

“Based on the success of the Residential Energy Guarantee in the U.S., we can certainly see the program adopted by other countries at some point in the future.”