August 2011

Green Building report shows costs and benefits of home energy efficiency

The New Jersey Association of REALTORS® (NJAR®) Governmental Research Foundation (GRF) has released a report showing the economic costs and benefits associated with “green building” practices or techniques improving the energy efficiency of a home. The study, Costs and Benefits of Residential Energy Efficiency Improvements, was conducted for NJAR® GRF by the Bloustein School's Rutgers Center for Green Building.

According to GRF President Bill Hanley, “This report was prepared to ascertain what types of “green” upgrades make sense for homeowners to invest in, with regards to how long it will take for these types of upgrades to either reduce costs or be paid back.”

Researchers studied various types of “green” upgrades for this report including envelope upgrades (which includes insulation, windows and doors), active mechanical systems (such as heating units), solar upgrades and ENERGY STAR/LEED upgrades. Specifically, the study examined the costs associated with “green building”, energy savings associated with “green building” practices and changes in energy operating costs associated with “green building.” The report found that four types of “green” upgrades have a payback period within the typical length that a person owns a home, approximately seven years.

“The study concluded that a well-insulated building envelope is usually highly cost-effective, especially when the home is constructed using advanced framing techniques that apply thicker insulation to walls, attics, and foundations. Solar upgrades also have a payback period of less than seven years when including state incentives, and they can actually provide revenue to a homeowner,” Hanley added.

Furthermore, Hanley noted, “At a time when policymakers from Washington to Trenton are looking at ways to improve energy efficiency, the costs associated with ‘green’ upgrades should be taken into consideration and policies mandating energy efficient upgrades on homeowners should not be considered. Rather, incentives should be offered for those interested in making their homes more energy efficient.”

According to Dr. Clinton Andrews, Faculty Director for the Rutgers Center for Green Building and a professor of urban planning at the Bloustein School, “the key is to help the homeowner consider the initial cost of a home together with its operating costs, and thereby understand what is a better overall investment given that they are paying both the mortgage and the utility bills every month, for many years.”

“This report shows that certain upgrades are cost-effective but homeowners should certainly consider how long it will take them to recoup their initial investment, whether building a new home or making ‘green upgrades’ to their existing home,” concluded Hanley.

Download report

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