Soon home buyers will be able to pick houses like they pick restaurants--by looking for the star ratings. In an effort to raise the quality of their housing stock, many states and utilities are rating houses. Programs from Florida to California to Alaska have embraced home energy ratings systems, or HERS, as a way to encourage the construction of homes that exceed energy codes. Most of these systems use "stars" to rate the efficiency of homes much like a newspaper rates the quality of the sirloin at steak houses. In recent years, energy ratings have been promoted as a way to qualify more people for energy-efficient mortgages. While that's still important, there's a new emphasis on HERS as an incentive for builders to build more efficient homes. It seems to be working.

For example, Energy Rated Homes of Indiana recently joined with the utilities, the state government and the Indiana Builders' Association to promote the Home Energy Rating System as a state energy code compliance tool. What they've gotten so far is better than mere compliance. "The program has shown a lot of potential to increase efficiency in the housing market," notes Mark Jansen of the Indiana Energy Policy Division. Jansen reports that in the part of the state where the program started, most new houses already exceed code. The reason? Builders see high ratings as a way to differentiate themselves from their competitors. "They're using the ratings as a marketing tool," says Jansen.

How it works

The HERS concept is simple. It is basically an energy audit that rates homes according to a relative energy-efficiency scale. The score is then translated to a star rating. Under most systems, a four-star home meets the requirements of the Council of American Building Officials' Model Energy Code (MEC), while the most efficient homes get a five-star-plus. "It's a system that consumers intuitively understand," says Steve Baden of the Residential Energy Services Network (RESNET), a national consortium of builders, bankers, utilities and government agencies who promote the ratings concept.

The same rating scale is applied to existing homes. While this promotes energy-saving retrofits, builders can use it to point out the built-in efficiency advantages of new construction.

Although HERS have been around since the mid-1980's, a lack of uniformity kept them from fulfilling their promise. Up to three years ago, there were as many as 20 different rating systems in the U.S., each with its own technical requirements. But recent years have brought the industry closer to agreement. The latest boost came with the Department of Energy's publication of preliminary HERS guidelines, along with a decision by DOE's Energy Star program to start rating whole houses in addition to appliances and heat pumps. Baden is optimistic about these developments. "Within three years all systems will operate the same way," he predicts, "and within five years we should have a uniform national standard." Uniformity should help builders and buyers take the ratings concept more seriously, and should help spread the use of ratings to new areas.

Baden, who is based in Alaska, points to his state as a good example of what happens when a HERS program reaches critical mass. After a decade with the rating system, says Baden, 83 percent of the state's new homes are now energy rated. The rating is included in the Realtors' Multiple Listing Service, which helps appraisers track resale values of rated homes. Ratings are also a part of the Appraisal Institute's database, so appraisers can compare similar five-star homes when establishing their value from a set of blueprints. Many home energy rating programs use energy labels to identify participating homes.

The upshot of all this has been a dramatic change in construction methods. Last year, says Baden, 75 percent of new Alaskan homes exceeded the State's MEC, 33 percent carried a five-star rating, and 15 percent qualified for five-star plus. "By equating energy efficiency to quality, we've created a consumer demand for efficient homes," he says.

Ratings can be flexible

One advantage of the HERS approach is that it can be tailored to meet local needs. For instance, in Ohio, the Department of Development--Office of Energy Efficiency is supporting a home energy rating program called HERO, Home Energy Ratings of Ohio. A "star" rating system was developed to identify the energy efficiency of new and existing homes and can be used as certification for energy-efficiency mortgages. Ratings are based on elements such as insulation, thermal efficiency, and heating and cooling efficiency of the home. HERO is fully compatible with the state's Model Energy Code. Like other rating systems, HERO uses stars to indicate greater efficiency.Vermont combines its star rating with an "electrical efficiency scorecard," that rates the electrical use of lights and appliances on a scale of zero to 10. Electric utilities use the scorecard to provide added incentive. Homes that earn acceptable star and electrical-efficiency ratings receive a waiver of the $350 hookup fee plus a $400 to $450 rebate. Richard Fasey of Energy Rated Homes of Vermont says that his organization has done about 2,600 ratings since 1987. "We've seen a marked improvement in efficiency of new homes," he reports. "When we started in the late 80's the average home was coming in at three-star-plus. Now most homes get between four and four-plus."

For more information on Home Energy Rating Systems and how they can work with the housing industry call Steve Baden at RESNET 907-345-1930.