Is Green-Proofing Your Home Worth It?

You’ve probably heard a lot about buying or upgrading to a green home and its benefits. Nowadays, there are many ways to make your house more energy efficient from replacing appliances to adding better light bulbs.

But if you take the initiative to “go green” and add everything you’re recommended to add, will it actually be worth the money you’ve spent in the long run? Before taking on a project like this, it’s good to explore this question as well as others you may have.

What “Going Green” Means Today

There have always been people willing to take advantage of solar heating as well as other “green” technologies. However, in recent years, the evidence has poured in that living a green life is much better for the environment and not to mention your bills. With pollution disintegrating the ozone layer, which is resulting in temperature increases planet wide, scientists predict many related problems including food shortages, health problems and animal extinctions.

Of course, we can’t solve all environmental problems, which is why we are encouraged to make adjustments a little at a time. By recycling and making green changes to our homes, we are told that the earth can slowly begin to heal the wounds we’ve caused over many decades.

Creating a Green Home

So what exactly is a green home? According to the U.S. Green Building Council (USGBC), a green home is one that uses less energy and natural resources as well as fewer toxic chemicals by utilizing a green design. While the homes look similar to others on the outside, they are working wonders to improve air quality and more throughout.

The ideal green home is one that receives a government-approved Energy Star program seal. The program, which started in 1995, requires a few upgrades to meet its standards, including some of the following:

  • Effective insulation: You must properly install insulation in floors, walls and attics to even out temperatures throughout the home without using as much energy. This results in cheaper utility bills.
  • Tight construction and ducts: By incorporating advanced techniques for sealing holes and cracks you could reduce drafts, pollen, pests, dust and moisture, improve air quality and lower utility and maintenance costs.
  • High-performance windows: Adding energy-efficient windows with protective coatings and improved frames helps even temperatures and block damaging ultraviolet sunlight.
  • Efficient heating and cooling technology: By adding energy-efficient health and cooling systems, you reduce indoor humidity and ease heating and cooling in the home. These products may also last longer and come with longer warranties, saving you money down the line.
  • Solar panels: While installing solar panels is still an expensive option for many, the benefits are great, including energizing your home without electricity and even heating your water (if you install solar hot water panels).
  • Energy Star products: By including Energy Star-qualified products in your home (lighting fixtures, ventilation fans, special appliances, qualified computer monitors/displays and compact fluorescent bulbs), you increase your chances of earning the seal.

While it may seem that receiving an Energy Star seal is next to impossible, over one million homes have earned it as of Dec. 2009, which means it’s completely doable.

But after all of the work is done, the question becomes, is the work worth the cost? Experts say yes, there are both immediate and long-term savings associated with creating a green home.

The Immediate and Long-Term Savings of Green-Proofing

In an effort to make the green home desirable, the government has produced a number of immediate savings incentives as well as long-term energy-cost savings. As for the immediate incentives, you could take advantage of federal tax credits like the following:

  • Roof, stove, HVAC, insulation, water heater, windows and doors credit: This credit allows for you to receive 30% of the cost for each one of the listed improvements on your existing principal residents up to $1,500 each. This credit expires Dec. 31, 2010.
  • Geothermal heat pumps, small wind turbines, solar energy systems credit: This credit allows you to receive 30% of the total cost with no upper limit for the listed improvements to both principal and second homes. The credit expires Dec. 31, 2016.
  • Fuel cells (residential fuel cell and microturbine system) credit: This credit allows for you to receive 30% of the cost up to $500 per 0.5 kW of power capacity on existing and newly-constructed principal homes. The credit expires Dec. 31, 2016.

You could also save a ton on state tax credits as well as rebates with stores like Best Buy that sell Energy Star products.

Just as there are immediate savings to take advantage of by creating a green home, there are also long-term savings. According to Energy Star, the typical house loses 15 to 20% of its heat and air-conditioning leakage through the ducts in the house. By upgrading to an energy efficient house, you could see savings on related energy costs within a year.

Is it Worth It?

To give a more concrete example of how the savings could translate on paper, let’s assume that you own a $200,000 house with a 7%, 30 year fixed-rate loan. According to a mortgage calculator, your monthly payment would be $1,330. However, if you add $15,000 in energy-efficient features, your monthly payment would go up to $1,430.

In order for you to pay for the higher mortgage and recover the up-front costs you paid within, let’s say a seven-year period ($100 more per month x 7 years + $15,000 = $23,400), your monthly energy savings would need to be $279 ($23,400 7 years 12 months).

Let’s say you were able to get back $12,000 in tax credits. This lowers your monthly energy savings requirement to recoup your costs to roughly $136. If you were initially paying $500 in average monthly energy costs and saw savings of 30% on your energy bills, your monthly savings would equal $150, which means you will have recouped your money eight months shy of seven years, while getting to enjoy additional savings for years to come.

So at the end of the day, is it worth it to green-proof your home?

The financial benefits that you could receive immediately and in the long-term, as well as the advantages you’re offering the environment by reducing pollution, make it pretty evident that making this adjustment to your home is well worth the cost. However, you shouldn’t stretch your budget immediately in an attempt to gain the green seal. Do your homework and get estimates on just what it will cost you to actually save on green-proofing your home.

After learning about the benefits of going green, will you green-proof your home?