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April 4, 2018

Baker proposal would rate homes on energy efficiency

Photo/SHNS Energy Secretary Matthew Beaton said the Department of Energy Resources will work with stakeholders to develop a standardized metric for grading home energy efficiency.

A home energy efficiency score would eventually become part of the valuation of all homes on the market in Massachusetts under legislation Gov. Charlie Baker filed on Tuesday to elevate awareness of home energy efficiency and target the residential sector for greenhouse gas emission reductions.

Under the bill, home energy auditors would be required to provide homeowners with an easy to understand scorecard that would grade a home's energy efficiency and provide recommendations for how the home's energy performance could be improved.

The ultimate goal, according to Baker and Energy Secretary Matthew Beaton, would be to require the disclosure of these scorecards for all real estate transactions by 2021, giving potential home buyers valuable information about the expenses associated with living in the properties they may purchase.

While the proposal was cheered by the environmental community, realtors expressed reservations over making home energy audits a prerequisite for sales. Real estate groups warned it could slow turnover in an already tight housing market and add to financial pressures on families in low-income communities.

"If someone doesn't have the resources to improve their home it will just be like a scarlet letter on their home," said Michael McDonagh, of the Massachusetts Association of Realtors.

Baker announced the legislation on Tuesday flanked by representatives from the Environmental League of Massachusetts, the Sierra Club and the New England Clean Energy Center.

ELM President Elizabeth Turnbull Henry said the legislation will ensure that homebuyers are as informed about what they are purchasing as consumers of new cars or refrigerators.

"This proposal is smart and well-considered and, frankly, everything we hoped it would be," Henry said.

The administration pitched the the idea of energy efficiency scorecards as an important consumer reform that would help tens of thousands of homeowners save on energy costs while at the same time helping the state stay on track to meet its carbon emission reduction requirements under the Global Warming Solutions Act.

Programs like Mass Save, which the governor himself has used, offer free home energy audits, and help homeowners make improvements with rebates and other incentives.

"The goal here is to provide homeowners with detailed information about the efficiency of their home and how they can make improvements that will lead to savings on their utility bill," Baker said at a State House press conference, comparing it to the miles-per-gallon rating stickers required on all new vehicle sales. 

The residential building sector in 2014 accounted for 26 percent of greenhouse gas emissions in Massachusetts. "This legislation will help us reduce that number," Baker said.

Beaton said the Department of Energy Resources will have to work with stakeholders to develop a standardized metric for grading home energy efficiency, and the agency under the bill will have the ability starting in January 2021 to mandate the disclosure of the energy efficiency score for all transactions.

He said the lead time will allow the state to build a foundation of trained auditors that will be needed to perform the required inspections and also consider possible exemptions for homeowners who may have a need to sell before an audit can be conducted.

"The power of information for consumers is something we're all incredibly invested in," Beaton said.

About 60,000 homes are audited for energy efficiency every year, according to the administration, but Baker said it will take something like the bill he is proposing to build enough "velocity" behind programs such as Mass Save to reach all 1.8 million homes in Massachusetts.

"This program will make it possible for people to make investments in their homes that can dramatically improve their energy efficiency and it will also provide people who are making decisions to purchase homes with far better information about what the ongoing expense of purchasing that home will look like," Baker said.

Baker said he had his own home in Swampscott audited through Mass Save, and was able to cut his energy bills by replacing 120 light bulbs. Auditors also found three issues in his home, Baker said, that would have caused it to fail a home inspection had he put it on the market to sell.

"There are a lot of people leaving a lot of very low-hanging fruit in their own home on the table right now by not participating in this program," Baker said.

However, realtors said the program should be voluntary, not mandatory.

"We have a lot of elderly we can't get out of houses in order to free up housing stock so the governor can fill them with families that we desperately need," said Greg Vasil, CEO of the Greater Boston Real Estate Board. "We don't want any barriers to entry."

The Massachusetts Realtors Association encourages homebuyers to request energy audits as a condition of sale, but does not think the government should mandate it.

"Our main concern is the impact this will have on real estate transaction," said McDonagh, the group's director of government affairs. "There is the potential for delays, increased costs and confusion without any measurable impact to reduce greenhouse gases."

While energy audits would eventually be required before a sale, there is no requirement that a homeowner make the recommended improvements to enhance their score.

"If you're looking to change behavior, and this is a big change for people, first you start with a voluntary program so people understand it and get used to it. Then you make it more formal. I mean, say you do an audit on your house. Who's going to pay for all the work you need to get it up to snuff," Vasil said.

Vasil also said it was unfair of the governor to compare the energy efficiency scores with miles-per-gallon fuel standards listed on new cars.

"Cars are built on an assembly line, houses are not. We have the oldest housing stock in the nation. Every house is different," he said.

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