In this interview piece, learn how Denver’s Home Energy Score pilot program helped change the game as to how energy efficiency factors into home real estate. And find out how to apply their findings to assess your home and reduce your home’s energy use, whether you are a renter or homeowner.
Denver has always been a city of action, especially when it comes to matters of the environment. The City of Denver has their own Office of Climate Action, Sustainability & Resiliency. This Office focuses on creating a secure economy and enhanced quality of life. It does this by ensuring that basic resources are available and affordable for all Denver residents, now and in the future. The Office also leads Denver’s efforts to address climate change by encouraging residents to reduce their home energy use.
As such, Denver is often among the first cities to adopt and test new approaches to energy conservation. From 2018-2019, Denver ran the Home Energy Score Pilot Program in partnership with the U.S. Department of Energy (DOE). This program used a “home energy label” to increase homeowner and buyer awareness of a home’s estimated energy use and energy costs.
As you can imagine, we at WattDoesItUse were very excited about this initiative! Julie Saporito, Residential Energy Administrator for the City of Denver, was generous enough to sit down with us and chat about the effort and their findings.
Read on to learn her insights about the results of the pilot program as well as some of the most effective energy conservation strategies, whether you are a renter or homeowner.
What is a Home Energy Score?
The Home Energy Score, managed by the U.S. DOE, is the most common home energy label in the U.S. The intent of the score is to give homeowners and homebuyers access to consistent, credible information about how to save money and energy.
This score works similarly to ENERGY STAR’s product label. It helps owners understand the cost savings that they can expect by investing in various energy efficiency improvements. If shared in a listing, it has the potential to help prospective home buyers compare the cost to power different homes based on their energy efficiency features.
The U.S. DOE uses an energy modeling tool that factors in a variety of data points collected during the home assessment. This tool generates a Home Energy Score number on a 1-10 scale (10 being the most efficient). It also provides a report with the home’s estimated energy use and energy costs. And on top of all this, homeowners receive recommendations for cost-effective energy efficiency improvements.
Home Energy Score Criteria
The Home Energy Score tool factors the following features into each home’s score:
Denver offered a Home Energy Score free of cost for participants (the average cost is $175). Energy assessors came to each participant’s home to conduct an assessment and generate a score and associated report.
The City of Denver Home Energy Score Pilot Program
The pilot program sought to understand whether receiving an energy label during the transaction of a home could increase energy efficiency in single-family residential buildings in Denver. The City of Denver launched the Pilot Program in order to help achieve its 80×50 Climate Action Plan goals. More specifically, it sought to assess the effectiveness of a Home Energy Score for Denver homeowners and buyers.
Out of all of the participants in the pilot program, the average home score in Denver was a 4/10. Only 3 percent of participants scored a 10. And roughly 20 percent of participants scored a 1.
That alone is a shocking statistic and valuable insight for the City, its contractors, and its homeowners! For more details regarding the results of the study, check out the full pilot evaluation report.
Interview with Julie Saporito, City of Denver Residential Energy Administrator
But we wanted to go behind the report to learn more about this exciting approach to home energy efficiency education. If you do too, you’re in the right place!
Julie collected feedback from hundreds of Denver homeowners and renters about two areas. First, their priorities, concerns, questions, and challenges with regard to energy efficiency. Second, how programs like the Home Energy Score Pilot could begin to address those concerns. With that in mind, we were thrilled to speak with her one-on-one about their efforts.
Note: This interview has been edited and condensed for clarity.
What was the driving force behind your office’s decision to launch this effort?
We believe it’s important to have voluntary programs for any resident. But we also wanted to understand one of the optimal times someone would be more likely to make energy improvements. So buying and selling homes became our focus. We have a climate action plan that includes a few goals around reducing energy use in homes. This pilot was linked with those climate goals. Our mission was to answer the two central questions. First: does seeing a Home Energy Score or label motivate people to pursue energy improvements? And second: can we help drive down energy consumption in single family homes by sharing this information?
So, how are Denver-area homes doing?
Denver has an older housing stock, and there is significant room for energy efficiency improvements. Of the homes that we scored, we can definitely shift most to be more efficient. But I think the main challenge that we saw was that Denver has very low natural gas costs. This makes it difficult to show cost savings based on the way the default Home Energy Score generates upgrade recommendations. Of all the homes that participated, roughly 98% have natural gas water heating or furnaces.
The Home Energy Score report might recommend an upgrade to a more efficient piece of equipment. But the tool cannot recommend switching to a different fuel source (i.e., switching from natural gas to electric and installing a heat pump). That would be valuable for some homes if they could capture local rebates to offset the initial investment. This means that the Home Energy Score would only tell a homeowner to switch to a higher efficiency furnace and show a mediocre energy savings of about $100 per year. This is of course unique to Denver since its natural gas costs are already so low.
The Home Energy Score tool also cannot factor in local rebates when calculating annual cost savings. Of course, if homeowners are only going to see a $30-100 savings per year, that isn’t enough to justify making an upgrade. This showed us that we need to look at generating a custom energy label. That way we can factor in local Denver rebates to fully communicate the cost-savings potential.
Was the program able to reveal any general information regarding the best upgrades to make?
We saw across the board that insulation and air-sealing is still one of the most cost-effective improvements. With local rebates, the annual savings would be even greater than the default reports calculated. This upgrade also addresses indoor comfort issues that are often more important to a resident over energy costs. So it really comes down to what’s important to a homeowner when we talk about the best upgrades to make.
Generally, the program confirmed that people don’t want to be thinking about their energy use all the time. They want to know that there are certain measures they can take. And then they want to be able to use energy as they need to throughout the home. Basically, set it and forget it.
This information is not readily available to everyone in a consistent fashion. So a property owner or tenant needs to navigate the process on their own. It can be difficult for individuals to determine what makes the most sense for their budget and home. On top of that, the COVID-19 pandemic and financial shift of our economy will likely impact the housing market. We may see a change in the housing market from a seller’s market to a buyer’s market. That makes it important for sellers to demonstrate their home’s lower operating costs to stand out from homes with similar size or location.
Was there anything that surprised you as you went through the pilot program? Did anything really stand out?
I thought the pilot would give us enough evidence to say that a policy to disclose a Home Energy Score at time of listing would benefit everyone. But that isn’t the case yet. What was surprising and encouraging was that whether people were selling or buying, they really do believe that energy information should be highlighted when a home is sold.
In fact, 75% of our participants had just purchased their homes. But even the 25% that weren’t new homeowners all expressed the same sentiment. They all wished that they could have accessed this information when they were looking for homes.
People want to know the long-term operating costs of homes they are considering. But the information shared with people is not consistent and missing from the listing. It would be nice to work toward a more consistent disclosure in the future. And that is a role the City can play.
What was also surprising was the huge opportunity we have for rental properties and creating some type of energy disclosure. The operating costs of a home or apartment if you’re renting may actually be more important to a renter than to a homeowner!
Absolutely! I am a renter. So I was curious about the utility of Home Energy Scores for renters. The utilities in the building aren’t mine, so my ability to make improvements is limited.
Exactly. Renters also may not be in a home long-term or have more of a fixed income. So a home energy label may really help shed light on whether they can afford a property. Rental properties do not disclose average utility costs. Half of Denver’s housing stock is comprised of rentals. So I think there is opportunity for us that wasn’t clear when we started the pilot.
We may want to create programs that work with either the property owner or the tenant. If they made energy efficiency improvements, they could potentially yield higher rent and keep tenants longer by keeping energy costs lower.
There are several other cities and states that support the sharing of an energy label, whether voluntary or mandatory. How is Denver’s approach unique?
Denver’s approach is unique, because we ran a pilot before simply implementing a widespread program. This gave us more insight into what type of label we can or should use to balance climate goals and the needs of our residents.
As a comparison, the state of Oregon has adopted the Home Energy Score state-wide. But then it’s up to different municipalities to help promote it or implement requirements to disclose. Portland requires that homeowners disclose a Home Energy Score when they list their home. But other municipalities in Oregon do not. Alternatively, Austin, TX requires the disclosure of a full energy audit at time of listing.
One of our key findings was specific areas to customize modeling around our housing stock. That is something we are pursuing right now. But if there are too many different options or requirements it confuses the market. So, staying consistent with one tool across cities or regions can help keep consumers informed and have the best potential for impact at scale. It’s a delicate balance.
As the pilot comes to a close, what are the future directions for your Office with regards to the data you have collected?
We are looking into a custom label that is more suited to Denver’s specific needs. The default tool is just too generic for us to rely on as a motivator for people to do improvements. We also found it does not allow us to offer specific electrification strategies. But if we can come up with a custom score using the back-end energy modeling and test it out, that could help illuminate further benefits of an energy label for our citizens. Our hope is that would further motivate them to action.
What Denver’s Home Energy Score Pilot Program Can Teach You
It’s certainly worth considering a home energy assessment. But many don’t have the budget for a Home Energy Score or may not have assessors in their area. As Julie mentioned, even if you fall into one of these categories, there are several steps you can take to better understand and reduce your household’s energy use:
- Do your research. Reach out to your local utilities, local energy office, and other entities. Ask about rebates and home energy assessment resources in your area. See if any programs exist to help you better understand ways to reduce your home energy use.
- Gather Data. Over a period of six months to a year, monitor your utility bills. Keep track of the trends of your use. Note the time of year and the amount by which your bill varies.
- Start Small. Begin with DIY upgrades that you can complete to decrease your utility bill and make your home more comfortable. Consider using our home energy efficiency checklist to guide your projects. As an example, your first upgrades may include:
You can’t change your school district or your home’s the floor plan. But when it comes to your home’s energy efficiency, there is plenty that you can improve in order to live more comfortably and save money!
Regardless of the changes you’re planning to make, we are here to help. From identifying energy saving strategies, to finding appliances’ power consumption, WattDoesItUse has you covered. Subscribe to the WattDoesItUse Blog for the latest and greatest in energy efficiency!