Energy Efficiency: A Marketing Tool

http://edis.ifas.ufl.edu/ ( Publisher's URL )
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Material Information

Title:
Energy Efficiency: A Marketing Tool
Physical Description:
Fact sheet
Creator:
Cook, Gary D.
Publisher:
University of Florida Cooperative Extension Service, Institute of Food and Agriculture Sciences, EDIS
Place of Publication:
Gainesville, Fla.

Notes

Acquisition:
Collected for University of Florida's Institutional Repository by the UFIR Self-Submittal tool. Submitted by Melanie Mercer.
Publication Status:
Published
General Note:
"EES-24"

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Source Institution:
University of Florida Institutional Repository
Holding Location:
University of Florida
Rights Management:
All rights reserved by the submitter.
System ID:
IR00004791:00001


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FactSheetEES-24 EnergyEfficiency:AMarketingTool1 GaryD.Cook2Energyefficiencyinahomeorbuildinghas significantpotentialasamarketingtoolforbuilders andrealtors.Energycostsareprojectedtoincrease atarategreaterthaninflationfortworeasons:1) becauseofFlorida'srapidlygrowingpopulation, utilitieswillneedtomaketremendouscapital investmentfornewpowerplantstoprovideelectricity forthesenewcitizens;and2)becausefuelprices (coal,oil,naturalgasornuclear)areexpectedtorise. Becauseofthecostincreasesprojected,energy efficiencycanbeusedasasellingpointforahomeor building. Builderswhomakeanextrainvestmentforenergy conservationinahomeorabuildingmustdosowith costversusbenefitinmind.Tobeusedasasales tool,theextrainvestmentmustleadtoasituationin whichthecostofenergyplusthemortgagepayment willbemoreattractiveforthemoreenergy-efficient houseorbuilding.Mostoften,amodestinvestment inenergy-efficientfeatures,whenusedinconjunction withnocostenergysavingdesignandsitingfeatures, willreducenetmonthlyelectricalandfueloutlays significantly.Inmanycases,justthenocostfeatures alonewillreduceutilitycostssubstantially.For example,itusuallydoesnotcostextratoreduce windowareasoneastandwestsides,designforcross ventilationandorientthehomeinamannerthat savesenergy. IntheexamplesituationprovidedinTable1,the costsofbothenergyandthemortgageareused togethertoshowtherelationshipsbetweenthetwo costs.Energycostshaverisensomuchthat,insome cases,theymayrepresentmorethanathirdofthe costofamortgagepayment. Ahomewithonlytheminimumofenergysaving featuresrequiredbyFlorida'sEnergyEfficiency BuildingCode,issoldfor$75,000with20percent downand13percentinterestona30-yearmortgage. With$15,000down,$60,000willneedtobefinanced. Monthlypaymentswouldamounttoapproximately $664for360months(30years)totaling$238,940. Addingthistotaltothe$15,000downpaymentresults inagrandtotalof$253,940forprincipalandinterest overthe30-yearmortgageperiod.Ownersofless efficienthomesinthispricerangefrequentlypayan averageof$185permonthforenergy(electricityand fuel)atcurrentFloridarates.Itcanbereasonably assumedthatFlorida'senergycostswillescalateat12 percentperyear.Basedonthesetwofigures,the ownercouldpay$476,374forenergyduringthe30yearmortgageperiod.Theownerwillpay,therefore, almost$222,434moreforutilitiesthanforprincipal andinterestpaymentsonthisrathertypicalFlorida home. 1.ThisdocumentisFactSheetEES-24,aseriesoftheFloridaEnergyExtensionService,FloridaCooperativeExtensionService,InstituteofFood andAgriculturalSciences,UniversityofFlorida. 2.GaryD.Cook,EnergyExtensionSpecialistforBuildingConstruction,FloridaEnergyExtensionService,CooperativeExtensionService, InstituteofFoodandAgriculturalSciences,UniversityofFlorida,GainesvilleFL32611. TheFloridaEnergyExtensionServicereceivesfundingfromtheFloridaEnergyOffice,DepartmentofCommunityAffairsandisoperatedbythe UniversityofFlorida'sInstituteofFoodandAgriculturalSciencesthroughtheCooperativeExtensionService.Theinformationcontainedherein istheproductoftheFloridaEnergyExtensionServiceanddoesnotnecessarilyreflecttheviewsoftheFloridaEnergyOffice. TheInstituteofFoodandAgriculturalSciencesisanequalopportunity/affirmativeactionemployerauthorizedtoprovideresearch,educational informationandotherservicesonlytoindividualsandinstitutionsthatfunctionwithoutregardtorace,color,sex,age,handicap,ornational origin.Forinformationonobtainingotherextensionpublications,contactyourcountyCooperativeExtensionServiceoffice. FloridaCooperativeExtensionService/InstituteofFoodandAgriculturalSciences/UniversityofFlorida/ChristineTaylorStephens,Dean

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EnergyEfficiency:AMarketingTool Page2 Table1. MortgageandEnergyCostsofConventionalvs.EnergyEfficientHomes. Year Conventionalhome(A),cost$75,000($15,000 down;15%/30yrmortgageonbalance) Energyefficienthome(B),cost$78,000($15,600down;15%/30 yrmortgageonbalance) Mortgage payments Energy payments Total Mortgage payments Energy payments Total Savingsover A 1 $7,965 $2,220 $10,185 $8,283 $1,260 $9,543 $642 5 7,965 3,493 11,458 8,283 1,983 10,266 1,192 10 7,965 6,156 14,121 8,283 3,494 11,777 2,344 15 7,965 10,850 18,815 8,283 6,158 14,441 4,374 20 7,965 19,120 27,085 8,283 10,852 19,135 7,950 25 7,965 33,697 41,662 8,283 19,125 27,408 14,254 30 7,965 59,385 67,350 8,283 33,705 41,988 25,362 30Year Totals $253,940 $476,374 $730,314 $264,100 $270,374 $534,474 $195,840Now,takethesamehome,incorporatea maximumnumberofnocostenergysavingandlow costfeaturesthathavebeencarefullyselectedto reducetheenergybillsbyapproximately44percent. Theimprovedhomenowmightcost$78,000.With $15,600down,$62,400willremaintobefinancedat 13percentfor30years.Thepaymentswillbe approximately$690permonth(only$26moreper monththanforthefirst,lessefficientoption).Over thelifeofthemortgage,theownerwouldspend $264,100forprincipalandinterest.Moreimportant, however,arethepotentialsavingsresultingfromthe energy-efficientfeatures.Forholdersofolder mortgages,today'scostsforenergymayactually exceedthemortgagepayment. Willbuyersrecouptheirinvestmentiftheyspend $3000moreforabuildingorhomewhich incorporatesbothextraenergy-efficientfeaturesand efficientnocostdesignoptionsthanforanother buildingorhomeofthesamesizewithoutasmany energy-savingfeatures?Theanswerisyes,ifthe builderspentthe$3000wisely.Insomecases,the $3000investmentcouldreduceutilitycostsbyas muchas$80amonth.Whereelsecananinvestor receiveareturnof$80amonthona$3000 investment(taxpaid)? A$78,000homemayaddabout$26amonthto themortgagepaymentcomparedtoahomecosting $75,000,butifenergycostsof$50to$80amonthare saved,morecashwillbeavailabletopaybothhigher mortgagepaymentsandfordiscretionarypurposes. Peoplebuyingenergy-efficientbuildingswillbeina positiontosavemoremoney,whichinturnmay contributetoamorefavorableeconomicclimate.(If moresavingsareavailable,moreconstructionloans arepossible.) Inthefirstyearofthemortgagewhenmortgage paymentsandenergycostsaretakentogether,the secondhousecouldcosttheownersabout$54per monthlessthanthefirstoption($80/monthenergy savingsminusthe$26increaseinmortgagepayment). Whentheenergysavingsaretotaledforthe30-year lifeofthemortgage,theycouldamounttoa whopping$195,840,about74percentofthetotal principalandinterestpaidforthehome.Thesavings duetoenergy-efficientfeaturescanberealandthey canbesubstantial! Thepotentialenergyandmoneysavingsare attractivefeaturestoahomebuyer.Theabilityto identifyandmarketenergy-efficientfeaturesis importantforprogressiverealestateagents.

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EnergyEfficiency:AMarketingTool Page3Table1providesanillustrativecomparisonof costsassociatedwiththesetwohomeoptions. Forthosedesiringtolearnhowtoidentifyenergyefficientfeaturesinanewhome,publicationsmaybe availableatcountyExtensionofficesthroughoutthe state.Thesepublicationsdiscussenergy-saving featuresanddesignoptionsincludingbuilding geometry,siteselectionandlandscaping,window design,function,placementandsuncontrol, orientation,vaporbarriersandinfiltrationcontrol, insulationandproperinstallation,selectionof efficientairconditioning,heatingandwaterheating systems.Table2providescomparisonsofbuilding insulations.Table2. GenericBuildingInsulationComparison. GenericInsulation R/inch lb/ft3 Advantages Disadvantages BattsandBlankets Fiberglass 3.2 0.6-1.0 Lowcost, noncombustible withoutfacings, stable Facingsmaybe combustible, bindersmayburn out RockWool 3.6-3.7 1.5-2.5 Lowcost, noncombustible withoutfacings, stable Facingsmaybe combustible, bindersmayburn out Boards Cellularglass 2.63 8.5 Highcompressive strength, noncombustible, impermeableto moisture,stable Highcost,lowR perinch,freezethawdamage possiblewhenin contactwithwater Mineralfiberwith binder 3.45 15 Providesstructural support,fire resistant,stable Moderatecost, modestRperinch, bindermaybe combustible Polyurethaneand polyisocyanurate foam Unfaced:6.2-5.8; Faced:7.1-7.7 2.0 HighRperinch, mayprovide infiltrationseal, lowmoisture absorption,stable Moderatecost, combustible (polyisocyanurate lesssothan polyurethane), nonstructural Fiberglass 4.25 3.0 GoodRperinch, lowcombustibility, goodaccoustical absorption,stable Highcost,binders mayburnout Expanded polystyrenefoam Extruded:5.0; Molded:3.9-4.4 0.8-3.0 GoodRperinch, mayprovide infiltrationseal, lowmoisture absorption,stable Combustible, nonstructural

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EnergyEfficiency:AMarketingTool Page4Table2. GenericBuildingInsulationComparison. GenericInsulation R/inch lb/ft3 Advantages Disadvantages Perlite 2.8 11 Low combustibility, stable LowRperinch Mineralfiberwith foam 3.7-7.3 NA Mineralboardacts asfirebarrierto protectfoam,can providestructural support,stable Foamis combustible Woodfiber 2.1-2.4 25 Availability,can providestructural support,stable Combustible Insulating concrete 0.8-2.0 20-40 Noncombustible, canprovide structuralsupport, stable LowRperinch LooseFill Cellulose 3.2-3.7 2.2-3.0 Lowcost,goodR perinch, availability Highmoisture permeabilityand someabsorption, maysettle0-20% ifinstalledattoo lowadensity Fiberglass 2.2 0.6-1.0 Lowcost, noncombustible LowRperinch, highmoisture permeability,may settle Rockwool 2.9 1.5-2.5 Lowcost, noncombustible ModestRperinch, highmoisture permeability,may settle Perlite 2.5-3.7 2-11 Lowcost, noncombustible, stable Highmoisture permeability Vermiculite 2.4-3.0 4-10 Lowcost, noncombustible, stable Highmoisture permeability FoaminPlace

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EnergyEfficiency:AMarketingTool Page5Table2. GenericBuildingInsulationComparison. GenericInsulation R/inch lb/ft3 Advantages Disadvantages Polyurethane/polyi socyanurate 5.8-6.2 2 HighRperinch, mayprovide infiltrationseal, lowmoisture absorption Moderatecost, combustible (polyisocyanurate lesssothan polyurethane),may suffersome shrinkage Ureabased mixtures 4.2 0.6-0.9 HighRperinch, mayprovide infiltrationseal Moderatecost, combustible; improperly installedfoammay shrinksignificantly and/orcause lingering formaldehyde vapors ReflectiveInsulation Twolayer R-5 LowCost, combustible,can provideinfiltration seal,lowthermal mass,very effectiveasa radiantheat barrier Dustonreflective surfacesmay reduce performance,best whenusedwith conventional insulation Threelayer R-7.5 AdaptedfromU.S.Navy'sBuildingMaterialCompilation