The Green House Effect:
Eco-Conscious Homes

Suzanne Johnson relishes the view from the living room of her $1.6 million home nestled in the Sierra Nevada mountains. But it's not just the sight of snowcapped peaks she enjoys. Her custom-built, energy-efficient house produces so much of its own electricity that the monthly energy bill runs under $100, compared with as much as $1,000 for neighbors using gas heating. "I get great enjoyment watching the propane trucks going up and down the hill this time of year," Ms. Johnson says.

The Johnson home

After years on the fringe, green homes with solar panels, tankless water heaters and walls insulated with straw are increasingly moving to the mainstream. They are even becoming fixtures in new housing developments, not just in custom-built houses.

In Vermont, officials say a third of the 3,000 new homes built there every year over the past few years have voluntarily adhered to rigorous energy-efficiency standards, as set by the national Energy Star program. In California, Gov. Arnold Schwarzenegger's plan to help fund solar rooftops on a million new homes was approved by the state's Public Utilities Commission last year. Industry officials project as many as 50,000 solar homes a year will be built in the state by 2015, compared with about 1,000 projected for this year, accounting for roughly a quarter of California's annual rate of new-home construction. North Carolina is using loans and rebates to help subsidize solar systems on 3,000 homes by 2010.

Nationally, green homes are projected to increase to between 5% and 10% of U.S. housing starts by 2010, from 2% in 2005, according to a report last June by the National Association of Home Builders and McGraw-Hill Construction. That would equate to a market value of new-home green building of between $19 billion and $38 billion, versus $7.4 billion in 2005, according to the report. It still remains a fraction of total residential construction: An estimated 1.8 million homes were built last year, with a total value of about $600 billion, according to the Census Bureau.

The growing popularity of energy-saving construction comes amid a flurry of new interest in combating climate change, reducing dependence on foreign oil and developing alternative energy sources such as wind and solar. In his State of the Union speech on Tuesday, President Bush laid out ambitious plans to expand use of alternative fuels.

Ms. Johnson's Gardnerville, Nev., house has 20-inch-thick straw-bale walls. In the winter, the sun shines into the porch and light is absorbed by the concrete floors, to help maintain heat. (Architect: Arkin Tilt)

Environmentally friendly buildings generally take two factors into account: energy-saving features and renewable resources. The most widely regarded benchmark is the Leadership in Energy and Environmental Design rating system, or LEED, from the U.S. Green Building Council. By its definition, a green home uses less energy, water and resources and creates less waste, like greenhouse gas emissions. A home can qualify if it meets minimum criteria under a points system, with credit given for features such as energy-efficient water heaters and insulation, water-efficient toilets and fixtures, and use of materials like nonrare wood and long-lasting siding.

Higher-end green homes tend to be the most energy-efficient, since some of the latest technologies can be pricey. Solar hot-water heaters use the sun to warm up the water; a solar panel runs from about $1,000 to $1,500, and a standard water heater is generally needed for backup. Rooftop catchment systems collect rainwater for toilet, bathing and irrigation purposes. Though they can be as simple as a used barrel, more extensive systems run $500 to $10,000.

It's still not easy to go green. In 2005, architect Phil Bernstein set out to expand his family's 2,500-square-foot home in New Haven, Conn., by another 1,500 square feet. Mr. Bernstein and his wife wanted to use green design -- like double-pane windows and expanding-foam insulation -- as much as possible, but ran into problems. They had a hard time finding kitchen countertops made of recycled material, for one. "We found some in Seattle, but we decided it would defeat the purpose to have a truck spewing carbon emissions bringing them all the way here," Mr. Bernstein says.

The couple also wanted to use an alternative to mahogany for their cabinets that didn't come from endangered forests. They found one called Lyptus -- a hybrid of two species of eucalyptus trees -- but when the cabinets arrived, they were pink. Mr. Bernstein worked with his builder for three months to find the right dye for the wood.

The project is now months behind schedule, and has cost $500,000 so far -- $300,000 over budget, in part because of the complications in going green. That's far more than Mr. Bernstein, who is also a vice president at software maker Autodesk Inc., would expect to recoup on a home he values at about $800,000. "If we sold this house, we would lose our shirts," he says. "It's like one homeowner against the world."

Experts say green features generally add anywhere from 3% to 5% to the total cost of a new-home project. A photovoltaic roofing system easily runs $30,000 or more on a large house. Although government subsidies can halve that cost, the payback in energy savings can take as long as a decade.

Yet the cost-benefit aspect of installing green technology is improving. A decade ago, a similar photovoltaic system cost $60,000. A tankless heater recently installed at a low-income home in Dallas cost $585 versus $188 for a standard tank-type model. But the tankless heater uses 730 kilowatt-hours less electricity annually than the tank one, resulting in power savings of $58 a year under local rates, according to an analysis by the Partnership for Advancing Technology in Housing, a venture of industry and federal officials. That's a payback on the investment within 6.8 years, according to the analysis.

On a larger scale, in San Jose, Calif., a developer called First Community Housing built 76 low-income apartments in 2003. The project's cost of $18.8 million included an extra $360,000, or 2%, for green features such as low-flow plumbing fixtures and engineered wood (made from glued-together wood fragments, so fewer trees have to be chopped down). The complex's energy savings are expected to total at least $520,000 over 30 years, according to a 2005 study by New Ecology Inc. and the Tellus Institute.

But there are potential downsides to green building. Some homeowners have had to tear out their poorly installed straw-insulated walls after the straw became wet and began to rot. Builders are also working to solve ventilation problems that arise when walls and windows are too well insulated, putting occupants at risk of toxic exposure to chemical fumes emitted by carpet, paint and other materials. Most reputable builders now make sure green homes allow a healthy inflow and outflow of air.

This Gambier Island, Canada, home uses a high-efficiency wood-burning masonry heater, made from recycled brick, that's fired once daily. (Architect: Henry Yorke Mann)

Green trends have come and gone over the years, and some skeptics wonder how long-lasting this one will prove. Solar energy was a big promise in the 1970s, but failed to take off after oil prices fell again. In the 1990s, with green materials like alternatives to wood and solar rooftop panels in short supply, builders faced spending as much as 30% more to use green designs instead of conventional ones. This time around, proponents say the economics have changed. As energy costs have spiraled and the cost of green technology has dropped, consumers are increasingly eager to embrace new techniques that, over time, can save them money.

Today, heating and cooling of homes accounts for about 20% of U.S. energy use, according to federal estimates, and the movement towards greener homes is likely to help curb the country's emission of greenhouse gases, experts say. And a survey last year by McGraw-Hill Construction found that for the first time, a majority of U.S. builders said they planned to use green features in at least 16% of their homes by 2007 -- in what NAHB officials call "a tipping point" in builders going green.

But many consumers remain unwilling to make a fundamental sacrifice: size. "The biggest thing people could do to be green is not to build a 4,000-square-foot house, but a 2,000-square-foot house," says Tim Hermach, executive director of the Native Forest Council, an environmental group in Eugene, Ore.

Green products are increasingly showing up in real-estate developments. In Maui, Hawaii, developer Dowling Co. is set to break ground in April on a gated, 69-home complex featuring solar power, low-flush toilets, native landscaping and low-emitting paints and carpets. Homes in the Maluaka development, about two miles down the beach from upscale hotels along the Wailea coast, will range from 2,500 square feet to 5,300 square feet, with prices expected to range from $3.75 million to $13.5 million.

Many of the new green developments are more affordable. In Seattle, work is half completed on the 1,600-home High Point development. City officials say it's being built so efficiently that it will use the same amount of energy and less water than the former housing project on the site, which had half as many units. Prices range from between $170,000 and $320,000 for flats to between $385,000 and $600,000 for single-family homes.

The roof of this Venice, Calif., house has 89 photovoltaic panels that transform sunlight to energy. (Architect: Pugh & Scarpa)

Commercial developers are even further along than residential developers, in part because cities and states have been pushing for greener construction. In Chicago, city officials have retrofitted 15 million square feet of public buildings -- an area the size of three Sears Towers -- with more efficient equipment for cooling, heating, lighting and ventilation. Officials also planted a lawn and shrubbery atop the Chicago City Hall, which has reduced air-conditioning use by 10% because the roof now reaches only 90 degrees on the hottest summer days, compared with 160 degrees on neighboring rooftops. In all, Chicago has some three million square feet of its municipal rooftops carpeted with the cooling gardens and trees.

Newark, N.J., has planted 500 trees in strategic areas around the city, with the shade from each tree designed to reduce heating and cooling costs in adjoining buildings by as much as 12%.

Berkeley, Calif., has used an educational approach. Anyone who applies for a building permit there is assigned a city staffer who gives recommendations on how green materials and designs can be used on the project.

Few places have as high a concentration of green building as Burlington, Vt., a leafy college town of about 40,000 people on the shores of Lake Champlain. Lake Champlain Chocolates, for example, built a packaging-and-distribution warehouse to vastly exceed energy-efficiency standards of the local utility. The waterfront in Vermont's largest city is also adorned with a green aquarium, green office building and a green high-rise apartment complex. At the University of Vermont, school officials have invested $250 million in green building over the past five years.

That effort has made an impact. Power consumption in Burlington has stayed roughly flat since 1989, even though the population and number of businesses have grown over the same time, says Chris Burns, an energy specialist with Burlington Electric, the city's utility. "Had we done nothing, we would be paying $7 million more a year for electricity," Mr. Burns says.

For a 40-unit apartment building on the Burlington waterfront, the $5 million development was financed by a combination of low-income housing tax credits and loans and grants from state utilities. Power consumption in the four-story building is tightly restricted, while an on-premises treatment plant was built to clean any storm water off the property before it runs into Lake Champlain. The residents of the affordable-living complex say they like the fact that their electricity bills run only about $20 a month -- less than half the rate for comparably-sized apartments that aren't built green.

All that efficiency can have a downside. Gail Hunter, 75, lives with her husband Cor, 86, in a top-floor unit with extra-insulated fiberglass windows. "The windows are so heavy they are very difficult to raise and lower," she says.

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