Coast 2 Coast Environmental Home Energy Efficiency

Abstract

This report sought to answer the question, “Do home energy efficiency upgrades affect the market value of a home?” A multi-tiered approach was taken to assess the impacts of upgrades on a home’s market value, including: a literature review, a regional case study analysis, a survey of local Realtors, and interviews of industry experts. The literature review consists of an extensive listing of existing home energy efficiency upgrades, an assessment of energy efficiency and market value, an evaluation of third party certification, and a listing of the barriers, benefits, and public perception related to energy efficiency upgrades. The results of the regional case study analysis found several important facts regarding the application of energy efficiency upgrades in other jurisdictions, including the following: most regions have similar incentive programs in place; many homeowners do not remain in their homes for long enough to receive full pay-back from long-term investments; the real estate market demand for energy efficiency upgrades is low; and that there is a vicious/virtuous cycle that explains the demand and support for energy efficiency amongst homeowners, professionals, builders, and financial institutions. The vicious and virtuous cycles are positive and negative feedback loops, respectively that explain the interactions between sectors. A survey was sent to local Realtors to determine the perception and general regard for home energy efficiency upgrades amongst Realtors and their clients. The general trend among respondents was that home energy efficiency is not an important consideration for buyers when purchasing a home; however, a small minority did attest to some value in certain energy efficiency upgrades. When asked if they perceived value in attending an educational seminar on home energy efficiency, most of the Realtors responded positively. Three interviews were conducted with industry experts, including: the Government Relations Coordinator for the Victoria Real Estate Board; an Energy Advisor from a Victoria Energy Assessment Service Organization; and the President of Sequel Integrated Resource Management. The key findings from the interviews include, the factors associated with the success/failure of energy labelling incentive programs, the effectiveness of tailoring energy assessments to individual homeowners, the prospects of impending changes to the EnerGuide iv labelling system and PAYS-BC program, the need for innovative and user friendly incentive programs, the impacts of life cycle valuation compared to traditional valuation, and the need for full-cost accounting to include the externalities associated with the benefits of home energy efficiency upgrades. Most home energy efficiency upgrades are seen as a worthwhile investment by Energy Advisers and industry professionals. However a knowledge gap still exists between homeowners and industry professionals as people are more influenced by more aesthetic features of a home like window and kitchen upgrades. The current home energy efficient programs offered should be designed around the vicious/virtuous cycles and in collaboration with each of the cycles specific proponents. This will ensure that the virtuous cycle is achieved and the demand for home energy efficiency upgrades will increase. Although the literature suggests that energy efficient homes have the potential to be worth more, the industry professionals sampled in the Westshore area do not actively encourage energy efficient upgrades or third party certification as a selling feature. The literature also indicates that the current municipal programs are confusing to homeowners and it was suggested in the interviews that financing options need to be clearer to the homeowner. Various recommendations were made to the project sponsor, and for future research. In regards to the sponsor, Solar Colwood should provide education seminars to homeowners and Realtors on the benefits associated with energy efficiency upgrades. It would also be worthwhile for Solar Colwood to investigate options to simplify the process (grants, permits, etc.) surrounding the implementation of home energy efficiency upgrades for homeowners and builders. Future research should investigate financing/incentive alternatives regarding home energy efficiency upgrades, including, the proposed PAYS-BC financing program, the proposed changes to the Natural Resources Canada, EnerGuide program, and Life cycle valuation. This report also recommended a more in depth, full cost accounting, listing both externalities and internalities.