Home Energy Labeling and Benchmarking

Image by Dan LeFebvre

Listen to this audio guide to learn more about how home energy labeling and benchmarking can support energy efficiency.

Home Energy Labeling and Benchmarking
00:00 / 10:39

Picture you’re at a car dealership.


You walk by rows of shiny cars, and you see one you like, so you step inside. Ahh! That new car smell, it’s the perfect size. And the dealer says, “Go ahead! Take a spin.”

So you turn the key and drive to the open road. You could get used to this. But you turn to your left to look for that sticker with the gas mileage. Just to check.


It’s not there.

"So if you wouldn’t wouldn’t buy a car without knowing the gas mileage, why would you buy a house effectively knowing what the gas mileage is of that house?"


That’s Anne Watson, who’s the mayor of Montpelier, Vermont.


Gas mileage gives you a sense of how much it’ll cost you to operate that car. And if you didn’t have that information, maybe you’d pause before you buy.


But this episode isn’t about cars. We’re talking about energy efficiency and the places we live.


In New Hampshire, the average monthly energy cost is three hundred and twenty-nine dollars. And that’s one of the highest in the country. But if our homes are more efficient, then we’ll use less energy. Using less energy is good for the climate because you’re producing fewer emissions. And it’s good for your wallet because you’ll save money on your energy bill. That’s a win-win.


So what can Keene do to support energy efficiency? In this episode, you’ll hear from two cities that are trying to do that.


Anne Watson will present an ordinance to Montpelier’s City Council in September 2020, and the ordinance would require every home for sale in Montpelier to include a home energy label. That label would show a house’s annual energy consumption and compare it to similar houses.


Here’s how Anne sees it. "Having home energy information in a standardized way helps people know what they’re getting. Are they buying a lemon? Are they buying a really great efficient home? How much is this home going to cost them over time?"


The energy labeling policy like the one Anne describes is really different from an energy disclosure. That’s when you see what the last homeowner paid for their utility bills. 


Let’s return to the car analogy.


Anne says, "If you’re gonna buy a used car, you wouldn’t be like, 'Hey, previous owner, how much did you spend on gasoline last year?' And in part that’s because you don’t know their habits."


Just like driving habits, the way that someone else uses energy in their home isn’t necessarily the same that you would. Personal habits and choices influence your utility bills. 


"How many people were living in that home that were using the energy? Was it a really horrible winter with snow storms and very cold weather? Did they keep their thermostat at 75 in the winter? Or were they keeping it at 68?"


That’s Samantha Caputo, who works at the Northeast Energy Efficiency Partnership. An energy disclosure tells you how the last person who lived in that home used energy, but a labeling program tells you how the building uses energy.


She says, "That is based on the insulation levels, how many bedrooms are in the home, is  there basement, which type of windows are there, things that can have an impact on how energy is consumed."


Energy labeling can give you an apples-to-apples comparison of houses or apartments. And this makes energy costs more visible.


To get a home energy label, a trained assessor can conduct an energy assessment in person, or it can be done virtually. If Montpelier’s ordinance passes, the assessment would be totally virtual. Anne Watson, the mayor, says an online system takes the onus off of realtors.


So a homeowner would use information that’s publicly available from the town assessor. Then they’d plug it into an online tool, and there’s your energy score. 


Now you might be asking, “What’s next?” Because an energy label doesn’t instantly lead to efficiency upgrades.


But here’s what studies have shown: homebuyers are more likely to make energy efficiency upgrades on their own when they have access to efficiency information in the first place. It’s sort of like a personal budget. If you don’t know your spending habits, it’s a lot harder to know what to do differently or how to cut back.


And here’s something else to think about: Anne Watson thinks it’s good for Montpelier to know residential energy information.


She says, "The point of the data is to help us as a municipality know how to focus our attention. We may end up seeing that there’s a whole class of types of residences that are just not being weatherized or that are not converting to renewable fuels. And why is that? What are the barriers for folks?"


Montpelier has a goal of reaching net-zero energy emissions in the next decade. With a labeling program, Montpelier can get a better grasp of its residential energy use. 


"It would be nice to know how we're doing towards reaching that goal, right? Like how are we making progress or are we not making progress? Right now, there is no data around the building sector," Anne says.


Knowing that information can pave the way for targeted actions in the future.


Samantha Caputo says, "Having that understanding at the city level can help the city either develop programs themselves or go to their utility and say, 'We would really like to see these opportunities offered in the near future,' and provide an engagement opportunity between the utility and local area."


Down the road, this might mean something like teaming up with the local utility to offer weatherization programs at a discount. But having an energy labeling program is the first step.


Troy Moon is the Sustainability Director in Portland, Maine, and Portland has emissions reduction goals, too.


He says, "60 percent of our emissions come from the building sector, so we really really have to get a handle on electricity usage and energy usage in general in our building sector. And it’s difficult to take action for things you haven’t quantified very well."


That’s part of the reason Portland passed an energy benchmarking ordinance four years ago. It’s in the rollout phase now. The ordinance applies to larger buildings, including residential buildings with over 50 units. They need to report energy and water usage to the city, and then this information becomes available to the public.


So let’s say there are two similar buildings in Portland, but they use really different amounts of energy. Troy Moon’s office would see that information.


He says, "And we could reach out to the building owner and say, 'Look, you’re using so much energy, and you’re spending way more money on energy than you really should.' So we can connect them to, say, Efficiency Maine, that has programs where they can get some incentives and maybe some loans to do energy efficiency work."


So Troy is pretty clear that this program isn’t a punishment. The City’s not telling you, “Hey, you failed the test!” It’s not that. The benchmarking ordinance helps Portland understand how to target its energy efficiency efforts in the future.


"And from the building owners’ perspective, keep money in their pocket," Troy says. "So it’s kind of a win win."


Energy labeling and energy benchmarking are two sides of the same coin. Energy labeling is geared towards single and two-family homes, and benchmarking can apply to larger residences.


But there are two other groups to think about here. How do these policies relate to renters and landlords?


Here’s a common setup: the renter pays the energy bills, and the landlord owns the property. The renter doesn’t have control of making energy efficiency upgrades, and the landlord might not have a financial reason to do this. They wouldn’t directly benefit from the energy savings. 


This scenario is called the split incentive


Just about forty-four percent of residences in Keene are renter-occupied. And low-income residents of rural New Hampshire have a higher energy burden than most other parts of the country. A high energy burden means that more of your total income goes towards paying for energy.


Energy labeling or benchmarking for rental properties might help renters make fully informed choices. Knowing energy information lets you anticipate your energy bills, which would give you a clearer picture of what your actual cost of living would be.


Troy Moon gives a hypothetical example of this.


Let’s say you’re a renter looking for an apartment, and you find two good options. One costs a thousand dollars a month, and the other costs 1100.


"Unless you know how both apartments use energy, you might think that the 1000 is a better deal," Troy says.


But it turns out that the apartment for a thousand a month isn’t insulated and the heating system’s old. The other apartment costs more, but it has double-pane windows and energy star appliances. 


But you don’t know that. So you go with the first apartment. And your energy bill? It’s a lot higher than apartment number two.


"And then you’re kicking yourself saying, 'I wish I had known and I would have gone with that 1100 apartment instead,'" says Troy.


For landlords, energy information policies can be a tool to highlight the work they’ve done to make their properties more efficient. And Keene could eventually use this data to identify local patterns and identify ways to support landlords who want to make upgrades.


As for right now, energy efficiency information is mostly invisible... until you get your bill.