Selling energy efficiency –

(From “upgrade” to viable homeowner

By Mallory Schaus, PE, LEED AP BD+C
Residential Business Development Manager – Temperature Equipment Corporation

“37 Builder Upgrades You Should Do!” “New Home Advice: Choosing the Best Upgrades!” “Home Upgrades That Are Totally Worth It!” “Are builder upgrades worth it?” These and many more real headlines are circulating blogs, forums, and newsletters, instructing prospective homeowners on how to best use their resources.

For homebuyers, the options presented for upgrades during the construction process are staggering. For builders, a market with intense competition – coupled with availability of information online – forces the design team to include every conceivable option or be at a disadvantage to their competitors. But the reality of a finite budget and infinite upgrades means that difficult decisions will have to be made. Buyers have to weigh the impact of personal aesthetic preferences against long-term resale value.

While many homeowners may have an interest in improving the energy efficiency of their future home, it may be at odds with financing other projects. When deciding between a high-end flooring finish or improving their indoor air quality, often the more visible project will win out.

True Cost of Ownership

Lighting, HVAC, and hot water heating options that result in energy and cost savings on a monthly basis can be quantified. If this equipment were installed after construction was complete, often those cost savings would not result in a quick ROI. But during the initial home financing period? A unique opportunity is available to both the builder and the installing subcontractor to leverage products that may otherwise be overlooked. In a given month, even a small energy savings payback will likely offset the equivalent monthly cost increase on a mortgage payment.

For example, a $1,000 lighting upgrade to LED fixtures would cost approximately $5 per month to the homeowner for a 30-year mortgage. The same upgrade, assuming 60-Watt incandescent fixtures replaced with 12-Watt LED fixtures, could provide up to $50 per month in energy savings.* If simply viewed as an additional upgrade, a homebuyer may overlook this selection in lieu of something more visible. Similar stories can be told with implementation of a variable-speed motor furnace, or higher SEER air conditioning equipment.

Changing the Narrative

As a builder, these innovative upgrades – and telling their full story – provide a valuable resource to the consumer. An enhancement that can pay for itself, and pay the homeowner back many times over, is a unique proposition. Through education of the sales team on the tangible benefits of these projects, and most importantly, by decoupling these choices from the standard upgrades and options plan for homeowner selection, energy-efficient equipment can provide the opportunity to improve the bottom line of both the builder and the homeowner.

*$0.12/kWh, 8 hrs of use, and 50 fixtures; mortgage assumed at fixed 3.94% APR