Analysis details benefits, costs of building energy-efficient homes

November 30, 1998

ANN ARBOR—With high winter heating bills on the horizon in much of the country, a new University of Michigan study shows that the total energy used during the life of a typical home in the U.S. heartland could be reduced by 65 per cent while also reducing the home’s long-term cost by approximately $52,000.

The study, conducted at the U-M School of Natural Resources and Environment, shows that simply increasing the thickness of exterior walls would dramatically decrease a typical new home’s energy consumption. Over the life of the home, an increase in initial purchase price and financing would be offset by lower energy and maintenance costs.

About 1.5 million new homes are built in the U.S. every year. For the study, U-M graduate students Steven Blanchard and Peter Reppe (pronounced Repp-ee) employed a technique called life cycle analysis to determine the total energy consumption of a 2,450-square-foot home built in Ann Arbor, Michigan. The two-story, four-bedroom home is slightly larger than the national average for new homes. But in its architectural style and features, including a living room with a vaulted cathedral-style ceiling, the home used in the U-M analysis is similar to many new homes being built across the country. The most comprehensive tool available to assess the environmental impacts of residential home construction, life cycle analysis quantifies a number of factors, including the natural resources used and the global greenhouse gases emitted over a given period, in this case, the 50-year assumed life of an average American house. The analysis starts with the production of the materials used to construct the home, through its use by a family of four, and its eventual demolition.

Blanchard and Reppe found that over its lifetime, the standard home used energy equivalent to 2,525 barrels of crude oil. The same home, designed to be energy-efficient, used energy equivalent to 1,008 barrels. The purchase price of the energy-efficient model would be $22,000 more than the estimated market value of $240,000 for the standard model. If energy costs remain the same for the next half-century, the lifetime cost of the energy-efficient home would be $799,361, compared to $800,361 for the standard model. But if energy costs rise by just 1 percent annually, the total lifetime costs of the energy-efficient home would be $51,761 less in 1998 dollars.

According to Blanchard and Reppe, most of the energy savings would be realized by equipping the house with 12-inch-thick walls, the so-called Saskatchewan wall. Made from double two-by-four studs with a 3.5-inch space between that is completely filled with blown-in cellulose insulation, the walls have an R-value of 35, more than twice the standard new house average. (R-values measure resistance to heat loss. The higher the R-value, the less heat flows through a material. The average R-value of the exterior walls of new houses is 14.)

“Increasing the thickness of the walls improved heat insulation by 60 per cent,” says Reppe, a research assistant at the National Pollution Prevention Center, based at the U-M School of Natural Resources and Environment and coordinator for the multi-million-dollar “green” renovation of the School’s headquarters in a 100-year-old building on the Michigan campus.

The thicker walls also reduced the per-pound “embodied energy” of the material by 87 per cent. Embodied energy is a calculation increasingly used by environmentally aware designers and builders. It captures the amount of energy that went into a material during its production, plus or minus the amount that will eventually be wasted when the material is destroyed or discarded, or recovered when the material is re-used or recycled.

By installing energy-efficient appliances, including a stove and clothes dryer powered by natural gas, Blanchard and Reppe reduced annual electricity consumption by approximately 40 percent. Among the other energy-saving features of the home are high-performance windows, improved roof insulation, an efficient furnace and air conditioning system, and compact fluorescent lights.

Since the benefits of greening the American dream home are substantial, both to cost-conscious homeowners and to the environment, why aren’t more energy-efficient homes being constructed?

One reason, according to Blanchard and Reppe, may be that homeowners move, on average, every eight years, so the long-term financial benefits of buying a green dream home won’t be realized unless energy efficiency becomes part of the calculation of a home’s fair market value.

Another reason is that without volume, markets for energy-efficient systems and the contractors needed to install them will not develop, keeping costs high.

The purchase price, and resulting financing costs, of energy-efficient homes could be reduced if design changes were made along with energy-saving features, notes Blanchard. “Our analysis was limited to decreasing energy use, without making the kinds of simultaneous design changes that a developer and architect might easily make to reduce construction costs,” says Blanchard.

The full, 70-page, illustrated text of the study, funded by the Charles Stewart Mott Foundation and the National Pollution Prevention Center, is available on the Internet, at



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