The Race to Carbon Freedom

We’ve heard all the buzz words. To some, they may be simple words. To others, these words have sparked action
from millions of people and billions of dollars in investments from every area of the globe. From product markets to
lifestyle choices, being “green” is not a desire; it is a global demand and movement.
Not only are products “green,” but large companies are creating carbon offsetting programs and appointing
chief sustainability officers to comply with a larger goal of lowering carbon emissions into our atmosphere. Cities
and states are taking similar measures into their own hands to meet their own climate goals and those of the Paris
climate agreement. Most notably, New York Governor Andrew Cuomo has set a goal to reach 100% carbon-free electricity
by 2040 and net-zero carbon emission by 2050; the budget for this is in the billions of dollars.
Many other states have similar goals and even more individual cities are looking to join the race to carbon freedom.
As these entities are working and investing in large-scale solutions, a huge component of consideration is that of
the energy our residential homes and buildings consume. How much? At least 40% of all energy generated in the United
States is consumed in residential homes and buildings. To current and pending programs, creating solutions for
residential homes could have a major impact in meeting or exceeding climate action goals.
At least 40% of all energy generated in the United States is consumed in residential homes and buildings.
New construction has been meeting a much higher level of code requirements in recent years. This has been achieved by
requiring (in many states) that new construction builds receive a Home Energy Rating System (HERS) index rating to
show that certain components (for example, air sealing, ventilation, equipment) are being used and are effective.
Some builders are going beyond the scope of code requirements and building different types of “net-zero”
energy homes that generate an equal or greater amount of energy than they use. Although the HERS assessment and
report are thorough and extremely credible, getting this done can be expensive for the average homeowner.
Now that getting an HERS index rating is required for most new construction homes across the country, the Home Energy
Score (HES) system has taken rank as the standard “energy label” for assessing the efficiency of existing
homes. Once upon a time, the program was only for Building Performance Institute (BPI) –certified energy raters
and contractors, but in the last few years, the program has welcomed qualified home inspectors and, in doing so,
worked its way into the real estate industry.
Notable advocates for the HES system are the city and state officials who are looking to meet and exceed their
climate goals. It seems like a simple concept: Knowledge is power! When buying, selling or renting a home, a
homeowner gets an HES energy label (just like an MPG label on a car). The HES report will assist real estate
consumers to better understand the home’s energy features, operating costs and how to effectively improve the
home’s efficiency and lower energy bills (Figure).

Again, because knowledge is power, if residents can have better knowledge of their home’s efficiency, that
(among other potential incentives) will motivate them to invest in the same. Such measures can contribute to
increasing the home’s value, comfort, health and safety, and to lowering the massive amounts of energy that
homes are using collectively across the United States. It is a win-win situation for municipalities and residents.
What many administrators working to introduce policy or programs that provide the HES have failed to understand is
that, if they want to work in real estate, they must comply with agents and REALTORS®. In 2015, the National
Association of REALTORS® (NAR) took a stance. They outlined support for energy labeling (like the HES), but they
did not support mandated policy that requires either buyers or sellers to acquire an energy label. At about the same
time, the state of Massachusetts was setting up an energy labeling policy of their own. The Massachusetts policy
failed to make it through the legislative process due to opposition from NAR and the local real estate
community.
NAR did not throw sustainability or energy efficiency out of a triple pane, low-e, argon gas–filled window.
Instead, they nurtured their values over the last five years and produced an annual Sustainability Report. This
report surveys REALTORS® nationally on aspects and topics of energy efficiency in real estate, helps to enlist
and educate thousands of REALTORS® to achieve NAR’s “green” designation and, according to the
report, has shown there is a vast demand for energy efficiency with buyers and sellers alike.
Five years ago, there were practically no energy labeling programs. Now, cities like Portland, Ore., Berkeley,
Calif., Austin, Tex., and Minneapolis, Minn., all require energy labels within the real estate transaction. Some
cities like Chicago, Ill., require sellers to disclose their historical energy costs. And other places like Denver,
Col., and the state of New York have launched pilot programs with home inspectors to deliver energy-labeling
information by providing the HES assessment during their inspections. New policies and emerging energy-labeling
programs continue to work their way to the public.
NAR, too, has become more compassionate toward energy labeling. REALTORS® and agents have gained an overwhelming
interest in “green homes.” Why? Because they can sell a green home for up to a 10% premium compared with
an average home. So, they have realized that HES and energy labeling may be able to work for them after all. The HES
system can provide clients an affordable option for a third-party accredited energy label that can help them raise
the value of a home. But, to require this within all real estate transactions, NAR and municipalities alike need a
solution.
REALTORS® and agents need an industry of professionals who are credible experts on homes and buildings, who
understand the complicated real estate transaction process and who can provide the HES without altering the current
transaction process. City and state officials need licensed or accredited professionals to provide energy labels in
an unbiased manner, who can work directly with REALTORS® and agents, and help educate citizens on their
homes’ level of efficiency.
Who Can Accomplish and Meet All Those Expectations?
Home inspectors are perfectly placed to provide these solutions. A home inspector meets and, in many ways, exceeds
the expectations that both municipalities and the real estate industry need to generate successful energy-labeling
programs. Better yet, the HES process can easily complement the typical inspection process. Most aspects of the HES
are already being inspected and assessed within the inspection process, and formalizing that process will add minimal
additional effort to an existing inspection, leaving the current real estate process unaltered.
Will the home inspection industry capitalize on the inclusion of a new industry or will it allow other professionals
to pounce on the opportunity? What will you do as an individual home inspector to prepare yourself for this future?
As the demand for HES continues to grow, real estate agents will be swift to find a solution that works for them.
Just as the HERS index has come to be an expected norm in new construction, it is only a matter of time for the HES
assessment to be an expected norm with existing homes. The Rocky Mountain Institute (RMI) has a working group of more
than 50 municipalities (some of which are among the largest in the country) to collaborate on building strong and
resilient programs and policies around energy labeling and the HES. Many of these participants not only want to
provide this information to the buyer and seller of a home, but they also want the information to be listed on the
MLS. In some places around the country, that is already happening.
The Green Building Registry (GBR) and the Home Energy Labeling Information Exchange (HELIX) both provide MLS systems
with HERS, LEED, HES and other energy-related information for residential homes. By utilizing these systems and
connecting information to the MLS, real estate consumers receive much better information about a home, and agents can
utilize a higher value for homes that are marked above average in efficiency.
Many studies from the last few years also have identified issues with energy and real estate that need solutions like
the HES program. The results of a study conducted in 2016 by the American Council for an Energy Efficient Economy
(ACEEE) showed that energy costs can be an incredible burden for homeowners with either low or middle income
(Table).

For instance, on average, homeowners with low income pay upwards of 7% of their annual household income on electric
and gas bills, compared with the average of 3.5% in other households. “Families suffering from high energy
burdens also tend to experience stress from living in constant fear of losing necessary electricity and gas service
due to inability to pay their bills” (Drehobl, A, & Ross, L. Lifting the High Energy Burden in
America’s Largest Cities: How Energy Efficiency Can Improve Low Income and Underserved Communities, ACEEE,
Available at: [https://www.aceee.org/sites/default/files/publications/researchreports/u1602.pdf). Now that many
people are experiencing decreased income due to the coronavirus (covid-19) pandemic, more and more people can
understand what that kind of stress feels like.
Unfortunately, when people are buying or renting a home, there is essentially zero information about the energy costs
associated with it. This is an incredible problem, as data show that, after the mortgage payment, energy costs are
most commonly the highest expense of owning a home. Today, almost all homeowners have little to no idea what to
expect related to a home’s energy costs until they move in and get the first bill—a bill that may be
difficult to pay if they were not able to plan out how they would pay for it.
Home inspectors, as industry professionals, are in a unique position. As more policies and programs are released,
homeowners and real estate professionals will be intrigued. Some municipalities or states may have requirements for
buyers; whereas, in other areas, the requirements may be set for the seller. In all areas, the need for an
HES-Certified Assessor to perform the much-needed work will increase, and the home inspector is perfectly placed to
provide the solution in either situation.
Answering This Call to Action is Similar to Joining the Race to Carbon Freedom
Will the home inspection industry capitalize on the inclusion of a new industry or will it allow other professionals
to pounce on the opportunity? What will you do as an individual home inspector to prepare yourself for this future?
To learn more about the Home Energy Score (HES) and how to get involved, visit I.D. Energy online.
www.EnergyScoreUSA.com or email info@idenergy.org.
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