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ENERGY STAR Version 3 vs. the HERS Index

 

energy star version 3 new home hers index resnetI'm not on the board or staff of RESNET or the EPA's ENERGY STAR new homes program, so I'm not privy to the discussions they've been having. It would be interesting to be a fly on the wall at the meetings where those two groups discuss what's happening during the rollout of and transition to ENERGY STAR Version 3. I've noticed an interesting jockeying for position between the two organizations lately.

The ENERGY STAR new homes program has been around since the mid-1990s and is currently undergoing the transition to version 3. In case you haven't heard, version 3 is much more rigorous than version 2. I've been writing about the new requirements here for over a year now, focusing on what's changing and what's going to be difficult. (If you're new to this, download and read my ES V3 white paper.)

Here's the rub, as I see it. The vast majority of HERS raters make their money qualifying homes for the ENERGY STAR new homes program. RESNET, being a good shepherd, wants to keep them working (and yes, has an eye toward self-preservation as well). ENERGY STAR has taken licks from some for being too easy because new home construction practices and building codes have improved. Version 3 takes the program up a few notches.

It seems that RESNET is afraid that the number of HERS ratings will drop a lot if they rely mainly on ENERGY STAR, so they've been out getting builders to sign agreements to have all their homes rated and then marketing the HERS Index. I've gotten quite a few email announcements in recent months about builders doing so. Here's one I got about three weeks ago:

Imery Group, a builder based in Athens, Georgia is committing to have all of their homes rated and marketing their homes' HERS Index.   
 
Imery Group and RESNET have entered into a Memorandum of Understanding (MOU) to work together in promoting improved home energy performance and home energy ratings of new homes. The intent of the MOU is to raise consumers knowledge of new home energy performance by using RESNET's HERS Index. This will clearly differentiate homes built by Lifestyle Homes [editor's note: I think they mean Imergy Group.] and put competitive pressure on the new home industry in the Georgia market to follow suit. It is expected that this agreement will serve as a model to other local and regional builders that would have positive outcomes for consumers, RESNET and the new home industry.

Two years ago, when ENERGY STAR was still vetting the program, I participated in a webinar led by Sam Rashkin (who recently left the EPA for the US Department of Energy). He said at that time that they expected the numbers to go down. The word I'm hearing is that some builders are going to bail when version 3 becomes mandatory (1 January 2012). RESNET is giving builders a way to continue getting a marketing edge without going through all the requirements of ES V3.

The HERS Index is RESNET's new hope for marketing the services of home energy raters.

The HERS Index has been an important part of the home energy rating process for years but hasn't been used much as a marketing tool until now, it seems. Based on the technical standards defined by RESNET and produced by the energy modeling software that incorporates those standards, the HERS Index gives an indication of how a rated home compares to the energy code.

To get a HERS Index, the home doesn't have to meet any prescriptive requirements or thresholds for performance. It just has to be rated. That's an easy thing for builders to do.

Qualifying a home for the ENERGY STAR label is not so easy. The home has to pass the items on the checklists (1 for ES V2, 4 for ES V3) and meet all the requirements of the prescriptive or performance path in the program.

If you're a builder, HVAC contractor, HERS rater, or other stakeholder in the new homes industry, what do you think? Will ENERGY STAR surprise everyone and maintain good numbers when V3 becomes mandatory? Will builders opt out and choose to market the HERS Index instead?

 

Related articles:

ENERGY STAR 2011 - Version 3 of the New Homes Program

ENERGY STAR Version 3 Train-the-Trainer Class - Day 1

ENERGY STAR Version 3 Train-the-Trainer Class - Day 2

The First ENERGY STAR Version 3 Class for HERS Raters

ENERGY STAR Version 3 - A Tool for Transformation in HVAC

ENERGY STAR Version 3 White Paper

Comments

Allison Last night, I freaked out. I have a good house, but because of the size adjustment factor (SAF), I thought my life as a rater was over. Things did not improve when the condition basement was eliminated. This one won't ever make it because it will cost a fortune to make it comply w/ V3. Thankfully, I also looked at another house that will make it--but only be adding 50% compact florescent light bulbs. 
 
My builder is looking for the cheapest Green building program he can build. He's planning on leaving the regional program that dropped V3 as requirement and going with ENERGY STAR alone. However, the the HERS Index w/ SAF requirement remains for both programs. As it turns out, it may be that the HERS Index requiring the SAF may undo both programs. 
 
Building a house with enough bedrooms helps a lot. I may survive as a Rater after all. However, my message will be to not let the spread between house being built and the Benchmark House to get too large.
Posted @ Friday, July 15, 2011 6:42 AM by Sam Young
Excercising maximum cynicism, I see two emerging scenarios. 
(1) 40% to 80% builder fall out. 
(2) Minimal change as creative raters develop new ways to "game" the system. In other words, selectively ignoring version 3 requirements and fraudulently labeling the home. (huh, just like now) 
 
Using the HERS index for marketing reminds me of that old joke where a builder asks a rater "what's my HERS Index gonna be on this home?" The rater replies "what do you want it to be?" 
 
Posted @ Friday, July 15, 2011 6:49 AM by Danny Gough
This could be a case of the tail wagging the dog to some degree. In the world of affordable housing we see much funding via federal grants that requires Energy Star certification. These types of projects will most likely continue with V3 out of necessity. My personal feeling is that custom builders will opt out to a large extent, especially when Raters get around to figuring out how much to raise their fees. 
 
 
 
One question i am curious about is how many homes are beig built now in the private sector vs. the affordable sector. 
 
 
 
I also believe that the fact that Southface has removed the EnergyStar requirement for their basic EarthCraft House certification gives builders, especially in the southeast region, another option that might be favorable. 
 
 
 
Having said all that, just because the new guidelines are tougher to see through, the right builders with the right mindsets and the right teams probably ought to just step up and get the recognition they would deserve for doing so. 
 
 
 
V3 is new, its more involved, its tougher, it requires a little different approach. Does that make it bad or less favorable?
Posted @ Friday, July 15, 2011 6:55 AM by Howard Feldman
Allison I also had a conversation with a builder that blew my mind yesterday. He's been building EStar homes for years, but doesn't know how to market them. Posting a HERS Index is a good idea, but if the builder can't translate that monthly savings, it's not going to work well. 
 
The key for marketing is to show the cost of mortgage payment plus the utility bills are significantly less a house house built to (or worse than) code. Things only get better as utility costs rise. 
 
The builder was also totally unaware that the HERS rating plus the program used to implement it saves a lot of equity when the house is sold. 
 
The REM/Rate model for the HERS Index doesn't help me a lot here. It reports expected annual savings. 
 
I'm exploring Wrightsoft's Manual J program (Right J) to see if I can show what it means on a monthly basis. At least they have monthly ASHRAE data. 
 
Bottom Line: We who consult w/ builders are going to have to figure out ways to help them tell the EStar story. With what they're getting now, it's not translating to home sales as powerfully as it should.
Posted @ Friday, July 15, 2011 6:56 AM by Sam Young
Sam: It'll be interesting to see to what extent green building programs decouple from ENERGY STAR. EarthCraft House, as you mentioned, isn't requiring ES V3 certification, but the house still has to meet the ES V3 HERS Index target, as you pointed out. 
 
Danny: I hope it's really not that bad. 
 
Howard: EarthCraft not requiring ES V3 certification at the lowest level doesn't make it a whole lot easier because they still have to get to the lower HERS Index target. It'll be interesting to see how things develop. 
 
Leigha: Thanks for the HomeCalc link. I'll have to play around with that.
Posted @ Friday, July 15, 2011 9:56 AM by Allison Bailes
As Allison points out, HERS has no minimum prescriptive requirements. On the surface, this shouldn't matter. A performance-based score is just as good, right?  
 
The reality is that performance based metrics like HERS miss some important elements of efficient construction - in particular, I'm thinking about the thermal bypass checklist. As RESNET aggressively pursues builders to commit to HERS ratings, I sure hope we don't lose sight of the TBC and other quality installation issues that ES has worked so hard to shine the light onto. 
 
@Sam: Using Wrightsoft for modeling seasonal loads (Right-$) would be a big step backwards compared to Rem, such as it is. About the only way to improve upon the HERS model would be to go with a full-blown hourly simulation tool.
Posted @ Friday, July 15, 2011 2:33 PM by David Butler
David I agree Right J doesn't tell the whole energy savings story. I can only get heating & cooling cost differences. 
 
However, REM/Rate gives a heck of lot of credit to things that don't matter and doesn't respond to things that do. 
 
For instance, Why should adding 50% reduce the HERS Index 3 points? 
 
Also, why is there so precious little difference between a Grade 1 and Grade 3 batt installation? 
 
It seems that once air sealing gets to 0.35 ACHnat, there is no impact on the HERS Index. 
 
Finally, making the ducts tight to less than 4-6% duct leakage to outside has not real impact either. 
 
My point? Unless I can figure out what the break points are for sensitivity to changes to recommend to the builder, I have no respect for it! 
 
I spent 3 hours last night trying to figure out how to get a house to comply with the size adjustment factor (SAF), including excluding the basement with a bedroom to have absolutely no significant impact on the Index. What made it move? light bulbs! Unless someone can tell me what I need to do to get this model to move lower in a significant way, this house isn't going to qualify under any energy program. Thank God I can still qualify it under V2! 
 
The HERS Index as a method of showing real world energy savings? I don't think so!
Posted @ Friday, July 15, 2011 2:50 PM by Sam Young
David: Yes, you're absolutely right about the value of the pre-drywall inspection and the thermal bypass checklist. If builders forgo those by choosing to get only a HERS Index, they're missing out on one of the best reasons to hire a HERS rater. 
 
Sam: Let me take a stab at answering your questions. 
 
50% CFLs: (I assume you meant CFLs there, since you mentioned it in an earlier comment.) The Index is based on a comparison of the rated home energy use to the HERS reference home energy use. If putting in 50% CFLs drops the Index 3 points, then the incandescents they replaced were responsible for 3% of the energy use. 
 
Grade I insulated assemblies are modeled as having full insulation coverage. Grade III assemblies have 95% insulation coverage, with 5% modeled as having no insulation. That's from the HERS technical standards.  
 
Infiltration: Yes, once you go below 0.35 ACHnat, there's no more effect on the HERS Index...until you add in mechanical ventilation. You don't get credit for a tighter house till you ventilate it. 
 
Duct leakage: The amount of change you get here depends on what you're comparing it to. Taking duct leakage down to 4-6% from 20-30% should have a big effect. 
 
We have a rater who's done quite a few EEMs, and he's compared his ratings to actual data pre- and post-improvements. The correlation is pretty good. In fact, we're putting in a proposal today to speak on this subject at the RESNET conference next year.
Posted @ Friday, July 15, 2011 3:09 PM by Allison Bailes
Sam, although I share your frustration regarding the new HERS index, I would never use it as a literal metric for predicting energy savings. As I'm sure you know, Rem provides annual energy loads separately from the index, and those loads are not impacted by the SAF, and for the most part, respond appropriately to the sorts of building modifications you described.  
 
For example, the HERS index will not improve below a certain infiltration threshold (unless you include active ventilation). But the annual load will.  
 
Don't get me wrong. I'm certainly not defending Rem as an energy modeling tool. My point was simply that Rem's annual (HVAC) loads are certainly better than what you'll get with a tool like Right-$. 
 
If you want to qualify a home for ES, you have no choice but to use the HERS index (or go with prescriptive path). On the other hand, if you're interested in predictive energy savings, you most definitely need to look beyond the index.
Posted @ Friday, July 15, 2011 3:12 PM by David Butler
David Thanks for your insight into this model. I assumed the Index and the energy savings were directly related. 
 
However, I no longer know what this means: "A HERS Index of 85 represents a house 15% better than code." If it doesn't mean energy savings, I have no idea what it means. Help?
Posted @ Friday, July 15, 2011 3:42 PM by Sam Young
Sam, in a general sense, the HERS index is pegged to various versions of the IECC. But you can't take this literally for any given home or climate zone. See this link: 
http://1.usa.gov/nWwiqQ 
 
Unfortunately, most homeowners don't understand why marketing sound bites like the one you mentioned can't be taken more-or-less prima facie.
Posted @ Friday, July 15, 2011 4:11 PM by David Butler
David: I'm not sure exactly what you mean by this: 
 
"Rem provides annual energy loads separately from the index..." 
 
The HERS Index is calculated from the annual energy consumption, not the loads. Is that the distinction you're making here? The consumption comes from the loads, though, so they're still related.  
 
The infiltration cutoff that you mention is the only time that connection is broken that I can think of. 
 
Sam: A HERS Index of 85 means that the rated home uses 15% less energy than the HERS reference home, which is based on the rated home meeting the requirements of the 2004 IECC. 
 
For example, I just opened a REM file in which the rated home has an annual consumption of 138.7 MMBtu/yr. The HERS Index is 79. Since the Index = 100 x (Rated Home Consumption) / (Reference Home Consumption), I can calculate the reference home energy use as 138.7 / 0.79 = 175.6 MMBtu/yr. (It's below 0.35 ACHnat but has mechanical ventilation.)
Posted @ Friday, July 15, 2011 4:12 PM by Allison Bailes
Personally I see both as great programs for builders, realtors, etc... not only in marketting but for appraisals.  
 
 
 
To quickly answer Sam's question first though - the HERS index is based on the 2003 or was it 06 (?) energy codes and applies across the board - no matter how old or new the property is - a house built to said codes only gets a 100 - worse than codes or before the codes came out it will be higher, etc... The program also gives off a modeled "energy cost" based on that home & it's orientation. Now a house built to say 09 codes, should be scoring around an 85 by default (it varies but close enough for this discussion) 
 
 
 
Now with all this in mind, if a homeowner or builder has built or upgraded a home they should have not only a lower HERS score but a lower modeled energy cost which can both be great selling points & give appraisers (assuming they know what each buildings HERS score is) a legitimate way of saying that one house is worth more than another due to the upgrades.  
 
 
 
Now as for Energy Star, not only do you have a lower score that that mentioned above, but you also know that the work was inspected by a third party inspector, etc... and that the house should work without having hot & cold spots, etc...
Posted @ Friday, July 15, 2011 4:20 PM by Sean @ AlaGBS / SLS Construction
There will almost certainly be a high dropout rate. It's a shame though, v3 is just as much about quality as it is energy efficiency.
Posted @ Friday, July 15, 2011 4:29 PM by Tim
David: The presentation in that link is looking at actual energy savings, not the comparison of the rated home to the reference home. I think Sam's question was about the actual meaning of the HERS Index, which doesn't have anything to do with how the home might actually perform, except to the extent that the model matches the real home. 
 
So, that's the HERS geek-speak. When builders, raters, or others look at a HERS Index of 85 and tell people that that house is going to save them 15% on their energy bills, that's where the problem comes in. It's only 15% better than the same house built to the 2004/2006 IECC, if the rater modeled it accurately and to the extent that REM is and the HERS technical standards are accurate. 
 
Anyway, this is a great discussion to have and probably deserving of its own article. By now we've scared off the less techie readers so we can go further and talk about even geekier things.
Posted @ Friday, July 15, 2011 4:30 PM by Allison Bailes
Sean: Yes, the third party inspections are key, especially the pre-drywall inspection required by ENERGY STAR but not for a HERS rating. 
 
Tim: Yes, quality installation is an important part of ES V3. In fact, the 2 HVAC checklist names start with "HVAC System Quality Installation." And HVAC is a huge in qualifying ENERGY STAR homes.
Posted @ Friday, July 15, 2011 4:34 PM by Allison Bailes
Allison, in Rem vernacular, annual loads and annual consumption are essentially the same metric. The only difference is that the later reflects HVAC box efficiency. I should have used the term annual consumption. My bad. 
 
But the point I was making is that the HERS index doesn't scale directly with the consumption metric, for the very reasons Sam brought up. Even if we build the reference home, several tweaks in the index (infiltration, SCF, and probably some others) cause it to diverge from the consumption model as you tighten the envelope or make other changes.
Posted @ Friday, July 15, 2011 5:21 PM by David Butler
Good thread here with a lot of topics in one. 
 
I agree with Howard in having quality builders step up and especially with Allison and David's sentiment regarding marketing the HERS and the scary thought of forgoing the TBC at a minimum. That is like buying a car that says 50MPG's without it ever having been tested. That would destroy what the HERS Index means. I don't think we will let that happen. 
 
I think Sean hit it on the nose by bringing in appraisers and Sam is also right with having to help builders learn to market the properties EE features. Getting a log of HERS Index with the projected annual energy costs would give some basis for adding extra value, but those homes need (must be) tested to have any sort of credibility. If we can add actual $ value to the value in what we do, watch out. This would get builders and realtors to pay attention. 
 
My thought with V3 is that with all of the big box builders that are marketing 100% EStar homes will have a tough time backing out by saying "the program is too tough". That will look weak. When you look at V3, it is asking for a little more, but more of what it is asking for is more verification. (I don't like the thought of measuring CFM's of an ERV on a 2 Story Gable though...Ladders, balometers, and lap siding sound like a disaster. Guess I will have to get proficient at traversing ducts) Anyway, I feel that these large builders will find HVAC contractors (because that is the REAL problem) to step up. If they encapsulate their attics and bring the ducts inside, some of the problems go away, but I think the big box builders stay with V3 and move the market. I also agree that low income funding will also stick with and learn to comply. Not saying it is going to be fun, but once we get through a few, I think the program will set apart the builders that do it from the pack. V3 has its flaws in the HVAC checklists, but it is time to set the bar higher! It is time to progress.
Posted @ Friday, July 15, 2011 7:59 PM by Les Watts
In my previous comment I listed the new size adjustment factor as one of the things that causes HERS Index to diverge from the REM energy consumption model. That would be incorrect. The SAF of course is applied to the target not the actual index. My bad. 
 
For those interested in other REM/Rate settings that are handled differently in the HERS index than in the consumption model, I started a list: <u>HERS Index differences</u> 
 
This is not a criticism of the HERS Index but rather an acknowledgment of its limitations, having been designed as an asset rating tool. When the objective is to estimate energy savings for competing improvement measures, the consumption model is a more appropriate metric. For existing homes, the best way to use this metric is to calibrate the model with energy usage history, a relatively new feature of REM/Rate.
Posted @ Sunday, July 17, 2011 7:26 PM by David Butler
With the input of home builders, in Wisconsin we have morphed the successful Wisconsin Energy Star Homes (WESH) program into the Focus on Energy New Homes Program (Focus handles energy efficiency rewards and programs in the state).  
 
The program is just kicking off with some WESH homes still in the pipeline, but it looks like the program has the opportunity to be a win-win for the homebuilders and the program. 
 
WESH was always designed to give the homebuilders maximum flexibility in meeting the programs' performance requirements. The prescriptive measures in v3 did not make as much sense as performance testing if the goal was to ensure that homes were built tight with appropriate ventilation. 
 
Information about the Wisconsin program can be found here: http://www.focusonenergy.com/Residential/New-Home/
Posted @ Monday, July 18, 2011 6:22 PM by Kevin Virobik
From what you've said here, I think homeowners would be better served by the Energy Star rating, rather than the "HERS" rating. I would want performance taken into effect, not just the potential.
Posted @ Saturday, July 23, 2011 9:47 AM by Roseville HVAC
Green buiding programs that are still requiring the HERS target with the SAF (Size Adjustment Factor) included makes sense, because they are GREEN building programs, and building larger isn't typically the greenest thing one can do. It is a way to even the playing field where it is typically more difficult for smaller homes to hit the target numbers. HERS is an efficiency standard, and works well as suck, but applying the SAF is an attempt to change it from a pure efficiency standard to something that is more of aN MPG standard. It is taking something that is good for comparing homes to better versions of themselves and attempting to change it into a tool for comparing homes to one another. In doing so it seems that it doesn't end up doing a great job at either. As a HERS rater I am interested to see what the market becomes for my services, but E Star is a program that should require rigor. I think RESNET would be better suited to focus their efforts in boosting the need for HERS in a different area. How about the jumbled and poorly designed Energy Improvement Mortgage market? It seems the perfect time to take that one on.
Posted @ Monday, August 08, 2011 3:14 PM by Casey
Everyone here makes valid points, but it seems like the main point of this article is which rating to use in your marketing materials. It seems to me like it would make sense to use the one that most of your potential and/or existing customers would recognize. What's the point of touting a rating when your clients have never even heard of it, much less understand what it means?
Posted @ Monday, August 13, 2012 2:14 PM by air conditioning Tulsa
Very helpful article! Would you be willing to possibly work together on a follow up article based on the comments? We at Mill Creek would love to work with you. Thanks.
Posted @ Friday, August 31, 2012 12:29 PM by Mill Creek Carpet
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