Total $50 to $295 a Year...
Updated Building Code Could Produce Long-Lasting Benefits
The study examined the cost effectiveness of increasing the state’s residential energy code in new home construction. Nebraska last updated its statewide energy code in 1983.
This study compares the first year and life cycle cost impact of:
The findings were clear: An upgrade to the 2000 International Energy Conservation Code from the 1983 Model Energy Code would generate dollar savings from reduced energy use in excess of any mortgage payment increases due to higher construction costs. The difference would mean a Nebraska homeowner could pocket between $50 and $295 a year in savings, depending on where the homeowner lived. Figure A illustrates the savings for four different house sizes in four Nebraska cities.
An upgrade to the 2000 International Energy Conservation Code from the current average code used across the state produced first year net savings in every case, as illustrated in Figure B. While the savings are not as dramatic, they are still compelling: The difference would mean a Nebraska homeowner could pocket between $25 and $124 a year in savings, depending on where the homeowner lived.
Hundreds of Thousands of Dollars Saved Statewide
Based on statewide housing construction figures, an upgrade from the current state average to the 2000 International Energy Conservation Code would produce a combined first year cost savings of $254,000 for buyers of new homes this year. And their savings will grow in subsequent years as energy costs rise. Over the next thirty years, the houses built during a single year will provide their collective owners with $5.5 million in net savings. These savings would be available to the homeowners for additional expenditures, which could bolster the state’s economy.
After implementation of the 2000 International Energy Conservation Code, savings will continue to grow as more of Nebraska’s housing stock is built to the new standard. Adoption of the 2000 International Energy Conservation Code by the State of Nebraska will result in more than $59.6 million (in 2003 dollars) saved over the life of the houses built before 2015, even if there is no housing growth during this period. Because these savings come from reductions in energy use, adoption of the 2000 International Energy Conservation Code would also help to shield Nebraska homeowners from future fluctuations in energy prices.
Savings Are Compounded
Other benefits to the state included additional investments in construction cost, which translates to approximately 1.13 million dollars in the first year, benefiting local builders and suppliers while increasing the value of the state’s residential infrastructure. While the new code would require marginally higher construction costs, any increase in mortgage payments is more than offset by the annual energy savings. The actual first year energy savings are $340,000, and will continue to compound each year as more houses are constructed to the upgraded standard. With more than 80 percent of the money Nebraskans spend on energy leaving the state, this savings produces a strong and immediate benefit for the state’s economy. Thus, the code upgrade benefits builders, suppliers, homeowners and the state.
About the Study
The study considered the reduction in energy costs associated with energy code upgrades and compared those savings to any increases in costs of construction required to meet the code. Weather conditions, construction costs and utility rates were considered for four cities selected to represent climate zones in the state: Chadron, McCook, Norfolk, and Omaha.
Details, including how the building components were constructed to meet the various codes, how the state average requirements were determined, development of the usage patterns, economic data used in the cost calculations, the basis for choosing the four cities mentioned above, and the documented sources were included in the full report.