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Time-of-Sale Energy Disclosure: Knowledge means consumer power

Time-of-Sale Energy Disclosure: Knowledge means consumer power

Posted by Chris Duffrin  |  Date January 15, 2019

This year, the City of Minneapolis is proposing energy disclosure policies to serve all its residents — that means energy benchmarking to better manage large buildings; time-of-rental energy reporting to protect prospective renters; and time-of-sale reporting (which this post explores) to inform potential home buyers.

As a rule, energy disclosure policies are designed to inform and protect consumers. In Minneapolis, the new initiatives also align with the City’s Climate Action Plan and Clean Energy Partnership, all promoting greater energy choice and control for residents.

Good energy reporting relies on good energy assessments, a field we know well at the nonprofit Center for Energy and Environment. CEE has conducted tens of thousands of home energy visits throughout the Twin Cities, and nearly 9,000 in Minneapolis alone. Over decades, our staff have employed each home inspection measurement in the City’s current disclosure plan. We have a unique understanding of both the work to be done and the crucial value of doing it.

As the City Council refines the time-of-sale energy disclosure program for home buyers, there are a few key points all Minneapolis residents should understand:

  • Purchasing a home is the biggest investment most people make in their lifetime, and home buyers deserve to know what they’re buying into.

  • As it stands, 70% of Minneapolis homes lack adequate insulation, making homes less comfortable and putting millions of homeowner dollars into unneeded fossil fuels each year.

  • To limit the cost and number of inspections, Minneapolis will fold its new energy disclosure report into the existing Truth in Sale of Housing (TISH) process for all home purchases.

  • Minneapolis will employ industry-standard assessments to reliably determine each purchasable property’s energy performance and how to improve it.

  • To assess the insulation in homes built before 1980, inspectors will drill a discreet 2" hole from the inside on an exterior-facing wall of the seller’s choice (typically in a closet), to be capped with a plastic plug after testing. This test, a standard practice for energy auditors, is already performed in about 5,000 metro area homes annually.

  • To assess air-leakage, inspectors will perform a “blower door test.” Now a global industry standard, the approach was invented in Minneapolis and uses a large fan set up in a doorway to measure air leaking through a home’s exterior.

  • Each energy disclosure report will provide a standardized energy rating and outline possible home energy improvements for every home sold in Minneapolis, but there are no required energy improvements tied to this policy. Taking action (or not) on the information is your choice.

  • The report will also inform homeowners about key energy impacts in their home tied to attic and wall insulation, the heating system, windows, and air-leakage.

  • To help make energy improvements, if desired, Minneapolis is currently offering 0% financing, and the utility also offers up to $1,400 in related rebates.

In partnership with CEE, the City completed a pilot to evaluate energy disclosure as a part of TISH. The pilot found that TISH evaluators are already collecting some energy data — and, with the exception of the blower door test, the data needed for an energy report could be collected relatively easily in less than 15 minutes. Although a blower door test would likely add another 30 minutes to the inspection, it provides valuable details on how leaky a home is.

City officials continue to research the options and invite input from community businesses and residents to help inform their decisions. Although valid questions remain about the testing process and final price of reporting, TISH inspectors will only need to collect a few more points of data than they already collect to make energy disclosure meaningful to a potential buyer. And even the highest cost estimates amount to relatively minimal spending for such a major purchase.

The City Council is continuing to hammer out the details because Minneapolis communities are demanding action on both consumer protections and climate change. As you likely know, living in one of our country’s coldest cities without enough wall insulation is uncomfortable, wasteful, and unnecessarily expensive, especially when insulation pays for itself rather quickly through reduced heating bills.

On average, we spend more every year on our utility bills than on home insurance. With that much money on the line, home buyers need to understand the impact energy has on their total cost of ownership. And low ratings won’t prohibit any homes from selling — in fact, data from other cities indicates that low-rated homes do still sell,although the most energy efficient homes sell at a premium. Across the board, savvy home sellers are likely to be rewarded for higher ratings.

For more info, read up on all the consumer-minded energy efforts under way in the City of Minneapolis. And take it from a nonprofit who knows from experience: Paying a bit more for energy information about your home — or your potential future home — can give you the control you need to make the smartest investments.

Related links

Transforming the Market for Energy Efficiency in Minneapolis (CEE 2018)