As I learn more about electricity, I began to wonder, “What impact does energy efficiency have on home sales?” Stephanie Cauller of Hilton Head Home Group with RE/MAX Island Realty shared some observations from the South Carolina low country. So whether you are buying a home, selling one, or staying put, there is plenty to be learned about energy savings. Here are five common energy upgrades:
- LED lighting: 60 Watt traditional incandescent bulbs cost approximately $4.80 per bulb annually and a 12 Watt LED costs $1.00 per bulb annually. To understand the monthly impact, I played around with this calculator site: https://www.ledwaves.com/pages/led-calc which conveniently takes into consideration the number of LED units, wattage, price per unit, lifespan, energy rate, and hours of operation to calculate return on investment, monthly savings, etc. I learned that in my home I would break even at one year, 10 months, and two days. Additionally, I learned that after 17 years, one month, and 14 days, I would save $7,729.
- Energy efficient appliances: There are plenty of simple calculators for usage for these as well https://www.energystar.gov/index.cfm?fuseaction=refrig.calculator although I didn’t find any to do the full ROI, etc. Tim Rogers of Mount Pleasant’s Agent Owned Realty warns, “the really new appliances may and do break down sooner and more frequently than appliances of a few years ago.”
- Solar panels: I have now met dozens of people who are using the Carolina sunshine to not only save on their electric bill but also to sell the power back to the grid and even earn energy credits. However, Stephanie explained this is not a widely used option in Hilton Head as there are so many trees in most neighborhoods that solar panels are not an option for many homes.
- Tankless water systems: In northern states where the ground is so cold, the water needs more heating before I would want it running from my shower. However, in the Carolinas the groundwater is already reasonably warm. Further, in the Carolinas, water tanks are typically elevated to avoid flooding and hurricane issues. This is risky as potential water damage to the home would be extensive. So, many people are converting to tankless systems which heat only on demand. Since the water is not constantly being heated, they are noticing a decrease in their electricity bill. Tankless Water Systems last on average 20 years which is about double the life expectancy of a traditional hot water heater. In a low usage home, (empty nesters or retiree’s) a tankless hot water heater will use 24-34% less energy and in a high usage home, you can see 8-14% more energy efficiency.
- Spray foam insulation: Sealing our air is of course essential so we don’t cool or heat air unnecessarily. So, there are great improvements in doors and windows. Additionally, spray foam insulation is an option considered most in the weather’s more dramatic months. Last January, one family saw their energy bill go from $250 per month to over $600. The electric heat pumps were working so hard and kept kicking in the emergency heat. So the family made the investment in spray foam insulation during the spring. Now the foam is mitigating the effects of the hot summer months that otherwise made attic space off limits and air conditioning expense unruly. Not being able to predict the weather or the exact energy rates, the ROI can only be estimated. For a 2,000 square foot house one online calculator estimated a $57 monthly energy savings and a full ROI in 46 months. Tim further explains, “There are pros and cons of each: closed cell and open cell insulation,” and he suggests, “make sure it has spacing around drain areas away from plumbing and also make sure it has space around chimney flues in attics.”
Stephanie also mentioned that she sees a great number of contractors and investors buying older homes, then making the improvements described above and reselling the home. So, I wondered what impact does energy savings have on purchase price. We calculated that upgrades driving a $200 per month in energy savings can allow for $200 more per month to be put towards the mortgage. That converts to $51,391 of additional purchase price (based on a 4.67% interest rate).
If you own your own home, there are clearly some great options for minimizing costs and maximizing sustainability.