Energy-Efficient Homes
Become Easier to Find
Home builders are finally making a power play.
Prodded by a host of factors -- including government incentives, more-affordable solar and other equipment and the potential for fewer battles with nearby residents and environmental groups -- developers are moving into an arena had had largely been the domain of custom-home builders or homes in remote areas: They are building homes that are promising energy savings and a secure supply of electricity.
Take the single-family-home development that recently broke ground in San Diego, Calif. The developer, Pardee Construction Co., plans to outfit each of the 97 homes at its newest development with solar-power panels and battery backup systems that will supply electricity even during blackouts. Moreover, each house will exceed federal standards for energy efficiency.
Though these features will add about $18,000 to the cost of constructing each home, Pardee thinks it's well worth it: They will make the Los Angeles-based home builder eligible for a host of benefits, including rebates, advertising and marketing from the local utility, and a quicker building-permit approval from the city. What's more, the extras helped the development win an endorsement from the local Sierra Club chapter.
"The energy crisis has created marketing opportunities that more and more builders are taking advantage of by building beyond code or adding solar," says Michael Hodgson, president of ConSol Inc., an energy-consulting firm in Stockton, Calif.
Reaching for the Stars
The benefits start with utility providers, nearly 70 of which offer financial incentives for homes built to comply with the U.S. Environmental Protection Agency's so-called Energy Star rating. An Energy Star-labeled home is one that is at least 30% more energy efficient in its heating, cooling and water heating than a comparable home built to a model code set by the EPA. For instance, Sempra Energy's San Diego Gas & Electric doles out $400 per new Energy Star home.
The number of home builders participating in the EPA's five-year-old Energy Star-labeled homes program more than doubled in the past year alone to 765, and as of the end of June, there were about 38,400 Energy Star-labeled homes in the U.S.
Another Energy Star incentive: Nearly 40 jurisdictions, most of them in California, offer quicker permit approvals or reduced fees to developers that build Energy Star homes, according to Colorado Energy Group Inc., a Boulder, Colo., consulting firm.
Golden Rays
Mass-production home developers also are starting to take advantage of state rebates for solar projects. The Florida Energy Office offers a $2 rebate to homeowners and builders for every watt a solar -- or photovoltaic -- system can generate. The California Energy Commission offers a similar rebate to those who install solar or other "green-energy" generation systems in homes. The program refunds half the cost of the system or $4.50 for every watt the system can generate, whichever is less. Although the program is three years old, most of the applications have been "for a home here and a home there rather than for a whole new development," says Marwan Masri, who manages the California program. "Interest from the building industry is really new."
Indeed, the first large-scale residential development in the nation to offer solar power as a feature debuted in San Diego just a few months ago. Only about 48 of the 300 homes in the subdivision being built by Shea Homes, a unit of Walnut, Calif., construction concern J.F. Shea Co., have been completed, but only a few remain unsold. The solar systems, which will be offered on all but about 80 homes (which weren't suitable for solar panels given their orientation to the sun), cost the developer about $6,000 a home. The homes, which range in size from 2,200 to nearly 4,000 square feet, are selling for $400,000 to nearly $700,000.
"Our sales have outpaced the competition" in the area, says Teri Shusterman, Shea's San Diego marketing director. "I can't help but believe it's the energy efficiencies and solar aspects that we're offering" that spurred the swift sales pace, she says. Another benefit for Shea: The solar systems allowed it to shave off about a week from the building-approval process and made the company eligible for rebates from the state and the local utility.
Rolling the Dice
Similarly, Pardee Construction began building homes in Las Vegas a few years ago that are 30% more energy efficient than the building code requires.
"Las Vegas is a very competitive market," says Joyce Mason, Pardee's vice president of marketing. "It appears to us that when buyers have a choice, even if they have to pay a little more, they go for the energy-saving home." Pardee is looking into installing solar-energy systems in its homes in the Las Vegas market now that competitors have started to build more energy-efficient homes, Ms. Mason adds.
Last year, Centex Corp. began building "above code" to take advantage of the rebates being offered by utility companies, says Eric Eilar, the estimating manager for the Los Angeles division of the Dallas-based builder. Two developments in Southern California, totaling nearly 150 units, are "selling well" because of the features, he says. "The rebates and the marketing advantage we gain go a long way."
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