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Energy Code Savings for PA Homebuyers

Upgrading homes in Pennsylvania to the 2009 International Energy Conservation Code will actually reduce out-of-pocket expenses for homeowners. The estimated additional construction costs of $698 will increase monthly mortgage payments by $3.02 but will be offset by average monthly energy savings of $20.04. This will allow homeowners to recoup their initial investment within 9 months of purchasing the home. After the first year, homeowners will realize a profit of $17 per month or $202 annually from the energy efficient upgrades required by the new code.

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42 views2 pages

Energy Code Savings for PA Homebuyers

Upgrading homes in Pennsylvania to the 2009 International Energy Conservation Code will actually reduce out-of-pocket expenses for homeowners. The estimated additional construction costs of $698 will increase monthly mortgage payments by $3.02 but will be offset by average monthly energy savings of $20.04. This will allow homeowners to recoup their initial investment within 9 months of purchasing the home. After the first year, homeowners will realize a profit of $17 per month or $202 annually from the energy efficient upgrades required by the new code.

Uploaded by

bcap-ocean
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© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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FOR NEW HOMES IN

PENNSYLVANIA

2009 INTERNATIONAL ENERGY CONSERVATION CODE


One of the major barriers to energy code adoption across the country is the concern that new Mortgage Monthly Cumulative
codes will add to the purchase price and potential buyers will not be able to afford the homes Month
Increase Energy Savings Cost/Benefit
they want. In Pennsylvania, upgrading homes to the 2009 International Energy Conservation
Code will actually reduce out-of-pocket expenses for homeowners – paying off their initial 1 $139.56 $20.04 $119.52
investment in a matter of months. 2 $3.02 $20.04 $102.50
For the average new home, BCAP estimates the costs of the new code will add a total of $698 3 $3.02 $20.04 $85.48
in construction costs—an increase of only 0.3%. When this amount is rolled into the average 4 $3.02 $20.04 $68.46
mortgage, real costs to homebuyers will mean a down payment increase of $139.56, and 5 $3.02 $20.04 $51.44
$3.02 extra on monthly mortgage bills.
6 $3.02 $20.04 $34.42
These added mortgage costs will be offset, however, by monthly energy savings of $20.04, 7 $3.02 $20.04 $17.40
helping homebuyers pay off their initial investment in only nine months. After breaking even
in month nine, the home will return buyers a profit of $17 per month—for a total return of 8 $3.02 $20.04 $0.38
$202 every year. This return on investment is graphed below and presented as a balance 9 $3.02 $20.04 $16.64 Break Even
sheet at right. 10 $3.02 $20.04 $33.66
Energy Code Payback for Pennsylvania Single Family Homes 11 $3.02 $20.04 $50.68

$17 profit every month


$100 12 $3.02 $20.04 $67.70
13 $3.02 $20.04 $84.72
Cumulative Benefit 14 $3.02 $20.04 $101.74
$50 Monthly Benefit:   +$17
Profit after Year 1:  +$68 15 $3.02 $20.04 $118.76
16 $3.02 $20.04 $135.78
0 17 $3.02 $20.04 $152.80
Monthly Energy 18 $3.02 $20.04 $169.82
Savings: $20
-$50
Monthly Mortgage This model assumes an average sale price of $267,451 for a
Increase: $3 2,400 square foot home. The mortgage is conservatively set at
-$100
30 years, with 20% down and the current average nationwide
Down Payment interest rate of 5.05%. With a lower down payment—such as
Increase: $140
10% down—consumers will break even on their investment
-$150 even sooner.
Month 1 2 3 4 5 6 7 8 9 10 11 12
FOR NEW HOMES IN
PENNSYLVANIA

2009 INTERNATIONAL ENERGY CONSERVATION CODE


Homes are the biggest investment we make—and everyone deserves a home that meets national minimum energy efficiency standards. While it’s true
that homeowners can always improve the efficiency of their homes, it is far more cost-effective to upgrade building components during construction,
putting in better windows or swapping out one grade of insulation for a better one. Here’s what buyers get with the 2009 IECC:

Lighting: $50

Window Upgrades
Payback Period Climate Zone 4: $207
9 months

2-year Profit
2 $271.94
Duct Sealing and
Testing: $350

Annual Energy Reduction


Insulation Upgrades
12-14% Climate Zone 5: $466
Climate Zone 6: $801

5-year Profit
5 $884.66
Climate Zone 4 Climate Zone 6
u-factor: .4 a .35 window insulation
r-value: 19 a 20 frame wall
r-value: 10/13a15/19 basement
Climate Zone 5
insulation
r-value: 19 a 20 frame wall

For the full Incremental Cost Analysis study, please visit bcap-ocean.org

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