In honor of Earth Day, we want to take a moment to discuss energy use in your homes.
Both Alissa and Jess have navigated home improvements for the purpose of reducing greenhouse gas emissions in their own homes, and have supported clients in doing the same. In order to determine the most effective ways to both reduce carbon emissions and increase the value of your home, we refer to the concept of “loading order” and the potential Return on Investment.
California Energy Policy mandates that energy efficiency be pursued first, followed by renewables and lastly clean-fossil generation. The foundational concept is that we should reduce the demand for energy before providing generation solutions (i.e. solar), because with efficient reductions in the need for energy, we can build smaller generation solutions.
This becomes the “Loading Order”: pursue energy efficiency before tacking energy generation.
To bring it into focus…if a home is “leaky” (gaps in windows and door thresholds, insufficient insulation), and if the home is using excess energy with incandescent lightbulbs and outdated appliances, selecting a solar panel array to meet the needs of a high-demand home requires a larger system. In this example, the guidance is to optimize electrical demand by increasing the efficiency of the home before pursuing solar.
Return on Investment
When clients ask our advice on home improvement projects, we consider the return on investment. Setting aside that some renovations just “make sense” (apart from the dollars-and-cents) we want to make sure that the project will pay itself back if there is a future sale on the home.
Updated systems such as heating and cooling, water heating, and the building envelope (roof, windows, and insulation) are valued on the open market by most homebuyers. If you plan to make an upgrade and then enjoy the benefits of that new system for some period of time before a theoretical future sale, most of the time the renovation is advised (especially if the old system is broken or at the end of its productive life). And of course the added benefit is that nearly any system upgrade will be more energy efficient. The return on investment here is compounded with your personal benefit for the duration of your ownership and it can make sense to pursue the upgrade.
But if you are preparing the home for the market, the answer to which system to upgrade can be more nuanced and complicated, and we recommend reaching out to your local agent (or us!) for a consult. Sometimes the return on the investment simply isn’t there and the buyer can assume the responsibility for the upgrade.
Regarding solar, a recent change in Net Energy Metering (a solar program that pays homeowners for the excess energy generated by solar panels) inspired a wave a last-minute solar applications trying to capture the higher rate before the April 15th deadline, and we fielded a number of phone calls by clients asking if they should be installing solar panels on their homes. The answer was neither a consistent “yes” or “no”, it depends on a number of factors.
In the East Bay, most buyers expect that the solar system is owned outright (no lease), so homesellers should anticipate paying off the remaining balance of a loan if there is one on a solar system. For that reason, a solar installation may not generate enough return on investment and the reasons to install solar panels are not dictated by a return on investment. Unless a homeowner plans to run a solar system for an extended period, the installation may not be advised.
We would be remiss to leave out the hottest topic for Earth Day 2023, electrification.
As you consider upgrading your furnace, as you shop for a new range in a kitchen remodel, and as you shop for a new car, consider swapping each out with electric options. Reducing our dependence on fossil fuels is a key pillar to achieving greenhouse gas reduction goals and its importance can not be overstated.
Greenhouse gases from buildings accounts for roughly ⅓ of total emissions. By cleaning up our sector - our homes and how we use energy - we can make a meaningful dent in battling climate change. See below for some local resources and please reach out to us if you’d like help creating a plan for your home!