Incremental Cost of Efficient Construction Well Under $1,000 Per Home

Washington, D.C., November 18, 2010 - The average incremental cost of constructing a new home to meet the current energy efficiency building code - the 2009 International Energy Conservation Code (IECC) - comes to a mere $818.72, according to a recent study by the Building Codes Assistance Project (BCAP), a nonprofit advocacy organization that supports code adoption and implementation.

Moreover, a homeowner will recoup those extra dollars in less than three and a half years, thanks to the annual energy savings of $243.37 per home - or even more quickly if the additional $818.72 is amortized over the life of a 30-year mortgage.

That scenario considerably shortens the payback period. For instance, in the state of Kentucky, the payback period is only seven months. In that state, a home built to the new code increases a 20 percent down payment by a modest $154.78 and the monthly mortgage payment by a negligible $3.01, BCAP found. With a 10 percent down payment, the extra up-front investment is made up in only four months, due to lower home energy bills.

BCAP based these calculations on the national average new home price of $267,451 for a 2,400-square foot home and a 4.14 percent mortgage interest rate. State-specific labor and product costs were also used so the study would mirror actual construction pricing as closely as possible.

When a home is built to conform to the 2009 IECC - which BCAP describes as a minimum but meaningful baseline for energy efficiency - home buyers get energy-efficient lighting and windows, a higher grade of insulation and HVAC duct sealing and testing.

"Throughout our research, we made sure to use real-world construction cost data and always tried to be as conservative as possible with our methodology," noted BCAP Executive Director Aleisha Khan. "For example, even though many states already require duct testing, we added in $350 to the up-front cost of the energy-efficient home, because we know that in some states it doesn't actually happen.

Khan continued, "A home is usually an individual or family's biggest lifetime investment, so it makes sense to protect and maximize the value of that investment by building in energy efficiency from the ground up - and reaping the benefits of lower energy bills from day one.

"And while homeowners can always improve their homes' energy efficiency, it's far more cost-effective to upgrade building components during construction, rather than make costly and inconvenient retrofits later on," she concluded.

The complete incremental cost analysis can be found on BCAP's best practice network - the O.C.E.A.N. website -- at http://bcap-ocean.org/incremental-cost-analysis.