How Much Is "Green" Worth to You?
If you could save $1,000 each year on your total utility costs, how much more would you be willing to pay up front to purchase your next home?
According to a recent survey by the National Association of Home Builders (NAHB), home buyers, on average, are willing to spend an extra $10,700 to save $1,000 a year on their utility bills. An investment of that size would essentially pay for itself within 10 years—the maximum amount of payback time for energy-saving measures to still be considered “cost effective,” as defined by industry experts at NAHB.
The responses indicate today’s home buyers are more interested in going green and saving on utilities than they were in 2012, the last time NAHB posed the question. At that time, the average amount buyers were willing to invest up front in efficiency came in at just slightly more than $7,000.
NAHB’s home buyer preferences survey asked consumers to rank green features according to desirability. Some of the items included:
· Energy-efficient appliances – Ninety percent of respondents specifically ranked ENERGY STAR appliances as either desirable or essential. The ENERGY STAR program has been around since 1992 and has spurred the development of countless energy- and cost-saving home appliances including washers and dryers, refrigerators and freezers, heating and cooling systems, lighting and windows, etc.
· Above-code insulation – One of the most impactful ways to minimize energy consumption is to install optimal amounts of insulation during initial construction. Not only are heating and cooling costs reduced, but overall comfort is improved. In the NAHB survey, 81 percent of consumers rated above-code insulation essential or desirable.
· Water-conserving features – Dual flush toilets and low-flow faucets and shower heads that promote water efficiency are very popular and rated essential or desirable by 72 percent of consumers. Tankless water heaters, which produce on-demand hot water and eliminate the costs of maintaining a tank of standby hot water, were also desirable green components, rated essential or desirable by 67 percent.
· Solar-powered heating and cooling – Though ranked last among features listed in the green section of NAHB’s survey, solar elements were considered to be desirable or essential among 61 percent of respondents.
For a large number of consumers, investing in energy-efficient features for their home is a very big commitment. While most will say they desire energy efficiency, there is a limit to how much they are willing to pay for it. Nearly half of the respondents to NAHB’s survey indicated they would need to see their investment pay for itself within five years, which further emphasizes the demand for an even wider variety of products that offer energy efficiency at all price points.