Home Energy Labeling – Leveling the Playing Field in the Housing Market

Home energy labeling could be a great motivator for encouraging homeowners to jump into energy improvements. The emerging trend toward creating energy labels on homes, similar to the energy labels on appliances, is one way to encourage homeowners in older homes to buy into the benefits of upgrading and the necessity to keep pace with other homes in their neighborhoods.

Already utilized in Europe and Australia, this practice could incentivize homeowners so that they keep their home competitive in the marketplace. It is no surprise that Oregon is the testing ground for this new program given the State’s focus on sustainable and living building initiatives. The label would convey the home’s annual energy usage, energy costs, and carbon emissions.

According to research from the National Association of Realtors, Americans live in a house for an average of seven years.  Homeowners generally say they will buy a more energy efficient house the next time they buy rather than invest in their current house. Home energy labeling may make homeowners reconsider deferring energy upgrades to someone else.

If a prospective home buyer had the ability to look at two houses on the market and compare the energy consumption of the houses it would enable the buyer to make a more informed purchasing choice. As a homeowner, wouldn’t you want to have a better home energy label than your neighbor?

If a house sits on the market for one year, I guarantee that the homeowner will spend more money in a wasted mortgage than if he had made the energy efficiency improvements that would have sold the house quicker. For example, the average U.S. mortgage may be around $1,600  per  month. If your house sits on the market for one year while you are already in a second home, you will spend $19,200 in mortgage payments on the empty property. If home energy labeling were in place, spending a fraction of that mortgage expense on energy upgrades would have made the house much more marketable and created jobs for the trades who do such improvements.

Home energy labeling has definite merit in a free market economy and this could incentivize homeowners to improve their properties in order to keep competitive with newer homes.

Lucas Hamilton

Lucas Hamilton is Manager, Building Science Applications for CertainTeed Corporation.

Trackbacks Comments
  • Thank you Lucas for the great post! I didn’t know that states were already using programs to incentify good energy home building practices. I know that using certain products, enables homeowners to gain certain tax reductions. Thank you for the great article.

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