Customers seeking green tech more than ever from builders

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A new national survey of home builders reports a growing resurgence in renewable energy features in homes, a trend that is being seen in both single-family and multifamily construction.

According to the findings by McGraw Hill Construction team and surveys of National Association of Home Builders members, green trends cast aside during the recession are again on the rise.

The report said 12 percent of single-family home builders included solar photovoltaic panels in new home construction, for instance. More popular in single-family construction was geothermal groundsource heat exchange technology, which was used in 26 percent of projects. Harnessing wind was the least popular project, with only 1 percent of builders including the technology in their homes.

Despite clear Carolina skies and sunshine, solar panels are not a popular feature here in Charlotte, according to custom builder Matt Ewers with Grandfather Homes. He estimates that about 1 to 2 percent of new homes in Charlotte have solar panels. Ewers’ own home has solar panels, but he’s been disappointed with the technology, saying the expectations he was promised haven’t materialized – nor have the cost savings.

Government incentives

That doesn’t mean green standards are unimportant in Charlotte. Ewers thinks that local municipalities’ stringent building codes are driving the march to more energy-efficient homes. Draft-proof houses are required – though obtaining an actual paper certification is not – which can save thousands of dollars. Insulation is an area where Ewers said consumers should not compromise. In choosing between energy-efficient technologies, consumers should consider the life span of the products when making choices about green technology.

“Insulation is the bones of the structure,” said Ewers, and the best place to recoup money.

Kathy Spence, a LEED-accredited professional at Banister Homes, finds there’s a lot of interest from Charlotte consumers in solar panels, though the initial permitting and installation of a solar array – which can run $20,000 – can dissuade some potential customers. LEED stands for Leadership in Energy and Environmental Design, a green building certification program that measures design, construction, operation and maintenance of green buildings.

However, consumers shouldn’t shy away from solar products based on price alone, according to Spence.

“There are powerful tax incentives in place that end in 2015 that people should consider,” she said.

More clients are inquiring about geothermal heat pumps, looking at the heat pumps as an upgrade to existing HVAC systems, according to Spence. Interest in geothermal heating units has quadrupled in Charlotte in the last five years said Mike Beaver with Beaver Brothers Heating and Air Conditioning, because customers are more interested in energy efficiency and there are “some very nice tax credits in place.”

Long-term benefits

The benefits of the technology is that it can cut fuel bills in half; the equipment lasts twice as long as traditional heating ventilation and air conditioning systems; and the underground tubing lasts forever, according to Beaver.

While the new systems are more expensive, they are worth it in the long run, Beaver believes: “If you put your money in the bank, you’ll get a 2 percent return. Put it in geothermal and you produce an 8 or 9 percent return.”

“Consumers are better informed than they were five years ago,” said Spence. They want energy-efficient homes and have an understanding of how to make their needs a reality. “They want a quality-built envelope that provides for lower cost of homeownership, a more comfortable environment, and better air quality,” she said.

Among the items buyers desire in a new home are window overhangs on southern exposures, better insulation, water-efficient fixtures and landscaping, and LED lighting.

In the national survey, multifamily developers were more likely to use these power production features in at least some of their projects. For example, 45 percent of multifamily developers used solar panels; 42 percent installed geothermal property in some projects; and 13 percent reported using wind turbines.

However, the survey found that these features were more common in the single-family market, perhaps due to incentives like the section 25D power production tax credit offered by the Internal Revenue Service made for energy efficiency improvements on new and existing homes. Nationally, more than half of single-family builders who reported installing solar panels did so on more than 25 percent of their projects. More than three-quarters of single-family builders who install geothermal heat pumps do so at more than 25 percent of their homes.

On the other hand, among multifamily developers who reported installing solar panels, the majority did so on fewer than a quarter of their projects. For those multifamily developers who reported using geothermal equipment, the installations are in fewer than 25 percent of their properties.

Short-term costs

Here in Charlotte, some developers are incorporating green technology into their multifamily projects more than others, who are not convinced that consumers will pay the difference it costs in rent for greater energy efficiency.

“Historically, consumers are not willing to pay the extra rent for it even if their utility bills are lower,” said Ken Szymanski, executive director of the Greater Charlotte Apartment Association.

Szymanski said this is an age-old question developers consider even when they weigh retrofitting older buildings.

“We use green certification on every project,” said David Ravin of multifamily developer Northwood Ravin. In some projects, Ravin said, he uses a limited amount of solar-powered technology to heat some of the pools and supplement energy at the community clubhouse; but it’s not on a massive scale.

Ravin believes that interest in green technology has gone through a cycle. Prior to the downturn, there was an interest in including more green features in multifamily construction, largely driven by lenders who required it for loans.

“The recession put everything in start-over mode and the requirements faded,” said Ravin, who admits that to some extent, interest in green technology is making a slow comeback.

“We thought it would be driven by the end use, but it really hasn’t,” he said. Young renters are somewhat concerned with energy efficiency, but at the top of their wish list of “must haves” in an apartment is enhanced Wi-Fi and cell phone capability. “The green movement has really been driven by corporate responsibility.”

But in the single-family home sector, Spence predicts that green building is here to stay.

“Options considered green are now fundamental to building.”