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Stop Building to Codeand Save Money
Steve RommeMarch 2017
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Agenda
• Cost of Ownership
• Code Compliance
• Saving Money
• Summary
• Next Steps
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Introduction
• I am NOT– An engineer, architect, physicist, chemist
– A builder, framer, plumber, electrician, HVAC contractor
– A building inspector or energy rater
• I am– A former ICF builder, solar contractor and passive solar designer
– Reasonably familiar with the UDC energy code
– Financial analyst who also knows building science
– Plain talking independent guy, that doesn’t mix words
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Cost of Home Ownership
2,423 sq. ft. ranch, Oshkosh, $250,000 Mortgage
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Mortgage$1,100
Energy Bill$262
Water/Sewer Bill$37
Maintenance$50
Property Taxes$417
Property Insurance$125
Monthly Cost of OwnershipDollars Percent
Mortgage $1,100 55%
Energy Bill $262 13%
Water/Sewer Bill $37 2%
Maintenance $50 3%
Property Taxes $417 21%
Property Insurance $125 6%
Total Monthly $1,991 100%
Monthly Costs
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The Builder’s Cup
Create an insulated cup with the lowest cost of ownership now and over 20 years
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Code Compliance
• Three paths to compliance
– Prescriptive• Meet minimum standards by component
– Thermal Envelope - UA trade-off• Use REScheck® to comply with maximum allowable total envelope U value
– Performance• Use REM/Rate® to comply with maximum allowable energy costs
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Prescriptive
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Thermal Envelope/ UA Trade-off
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Performance-based
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• Energy costs when compared to same house with “reference features”• Using the same fuel• Using most of the same building materials• Limits window area to 18% of floor space
• Energy costs savings not allowed• Hot water usage• Internal gains• Internal window shading
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Quiz Time
• Which compliance path ensures the lowest cost of ownership?
A. Prescriptive
B. Thermal Envelope/UA Trade-off
C. Performance-based
D. All of the above
E. None of the above
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Building to Code
• Prescriptive– Always more expensive to own
• Highest energy bills, sometimes higher mortgage costs
• Thermal Envelope - UA trade-off– Always more expensive to own
• Only allows for insulation trade-offs
• No consideration for BUILD COSTS, fuel type, air infiltration, lights or mechanicals
• Performance– Almost always more expensive to own
• Can identify the lowest energy costs– Excluding LED lighting and water usage
• Does not consider BUILD COSTS or maintenance costs11
Monthly Cost of Ownership
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Building to Code Wastes Money
• UDC Energy code provides three methods of compliance, but none of them:– Consider the BUILD COSTS (mortgage costs)
– Consider maintenance, water usage or LED bulbs
– Require performance testing (so what do you really get)
– Guarantee performance (good luck, see you later)
Now what?12
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A Better Plan
• Provide customers with the best value– Focus on home ownership costs
• Optimize the combination of MONTHLY mortgage and utility bills
• View energy code as minimum performance and good installation guidelines
• Don’t guess!
• Invest in a new and better process– Optimize, specify, inspect, test and guarantee
• Home ownership costs will always be less than code– Including new process costs
• Planning and construction time will be the same– Optimization and specification can be completed in a day
– Inspections can be completed in less than an hour each
• Construction quality will be better– Built to specification and verified along the way and with final testing
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Monthly Cost of Ownership
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Optimization• Focus on mortgage, energy and water bills
• Find the lowest combination
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Optimization
• Find the bottom of the V – where ownership costs are lowest
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Optimization• Energy savings should always be greater than the associated
mortgage increase
• Example– Upgrade the gas HVAC system
• From 90% with 13 SEER A/C
• To a 98% modulating, 18 SEER A/C
• Cost adder $3,200
Do you invest in this upgrade?
NO!16
Base CaseMortgage $1,100Utilities $262 Total $1,362
98%/18 SEERMortgage $1,115Utilities $251 Total $1,366
SavingsFirst Year ($42)20 Years $735
$3.50
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Upgrade Description
Non-ECM
(90%) Air
Heat (13)
A/C
Non-ECM
(93%) Air
Heat (13)
A/C
(95%) 2
Stage Air
Heat (13)
A/C
(95%) 2
Stage Air
Heat (16)
A/C
(98%)
Variable
Air Heat
(13) A/C
(98%)
Variable
Air Heat
(18) A/C
Hybrid
Non-ECM
(93%) Air
Heat (15)
A/C
Hybrid
(95%) 2
Stage Air
Heat (15)
A/C
Hybrid
(95%) 2
Stage Air
Heat (18)
A/C
Hybrid
(98%)
Variable
Air Heat
(18) A/C
(96%)
InFloor Heat
(13) A/C
Installation Cost Change $300 $1,200 $1,900 $1,700 $3,200 $1,800 $2,700 $3,700 $4,200 $16,400
First Year Savings vs Low Build Cost -$5 $28 $0 $19 -$42 -$199 -$173 -$127 -$155 -$866
20 Year Savings vs Low Build Cost $98 $1,647 $1,202 $1,710 $735 -$4,041 -$2,711 -$781 -$1,274 -$16,433
Optimization
• There are better HVAC options
Do you invest in either of these?
Maybe
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Optimization
• HVAC upgrade options are good, but not the best
Reducing air infiltration costs less and saves more
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Air Infiltration None Minimal eFree Basic eFree Ultra Extreme
0.20 0.13 0.08 0.06
$600 $1,350 $1,350 $8,050
First Year Savings vs Low Build Cost $68 $55 $77 -$296
20 Year Savings vs Low Build Cost $3,065 $3,309 $4,116 -$3,136
Performance
Installation Cost Change
Upgrade Description
Non-ECM
(90%) Air
Heat (13)
A/C
Non-ECM
(93%) Air
Heat (13)
A/C
(95%) 2
Stage Air
Heat (13)
A/C
(95%) 2
Stage Air
Heat (16)
A/C
(98%)
Variable
Air Heat
(13) A/C
(98%)
Variable
Air Heat
(18) A/C
Hybrid
Non-ECM
(93%) Air
Heat (15)
A/C
Hybrid
(95%) 2
Stage Air
Heat (15)
A/C
Hybrid
(95%) 2
Stage Air
Heat (18)
A/C
Hybrid
(98%)
Variable
Air Heat
(18) A/C
(96%)
InFloor Heat
(13) A/C
Installation Cost Change $300 $1,200 $1,900 $1,700 $3,200 $1,800 $2,700 $3,700 $4,200 $16,400
First Year Savings vs Low Build Cost -$5 $28 $0 $19 -$42 -$199 -$173 -$127 -$155 -$866
20 Year Savings vs Low Build Cost $98 $1,647 $1,202 $1,710 $735 -$4,041 -$2,711 -$781 -$1,274 -$16,433
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Optimization
• The entire home must be modeled and all options must be compared against each other to ensure optimization– No cookie cutter solutions
– Software makes the task fast and painless
• Let’s take a look at the software
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Delivering a Better Value
• Optimization identifies the best recipe– No guarantee the home will be built that way
• You still need to build it right– Provide written specifications to key sub-contractors
– Audit during key build points (framing, insulating, drywall, finished)
– Complete performance testing
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Delivering a Better Value
• Avoid wasting money– Framing 16”oc
– Not spending the time to air seal the envelope
– Using electricity when natural gas is available
– Many more - Myth Buster – tomorrow afternoon
• Know key energy and cost drivers– Fuel type
– Energy usage
– Conditioning costs
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Optimization Drivers
• Fuel type
– Natural gas is much cheaper than propane or electricity• Use it wherever you can
• Low savings potential means upgrades to insulation and mechanical efficiencies are not justified as easily
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$49.51 $48.86
$39.31
$23.88
$15.28
$6.26
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
WE Elect Alliant Elect WPS Elect Med Elect Propane Nat Gas
Cost / Million BTUCosts from 2015 bills inflated to expected 2017/18 rates
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Optimization Drivers
• Always model the home to know total savings potential– 5% increase in furnace efficiency is $36/year
– 20% increase in A/C efficiency is $29/year
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Major Appliances $167
Lights-Fans $336
Plug Loads$492
Cooling$147
Heating $714 Hot Water $476
Water / Sewer$448
Water Service Charge $359
Energy Service Charge $453
Non-Optimized
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Optimization Drivers
• Always model the home to know conditioning saving potential– Adding 1” of foam to above grade walls might save $35/year
– Triple pane windows might be able to save $75/year
– Insulating the basement floor will save almost nothing
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Above Grade Walls$233
Windows/Doors$154
Ceiling/Roof$49
Foundation Walls$67
Infiltration$261
Slab Floors$16
Ventilation$70 Framed Floors
$18
Conditioning Costs of Non-Optimized New Home
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Our Results vs Code
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Who wins the Builder’s Cup
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Summary
• Building to code is a waste of money
• The better way to build– Optimization is the only way to get the most for the money
• Cost to optimize is $2,000 and it always pays for itself immediately
• Can be done with eFree Advisors or other optimization provider
– Specifying, inspecting and performance testing ensures you get the most for your money• Can do it yourself, with FOE, or eFree Advisors
• Now that you know…
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Questions?Steve Romme
www.eFreeAdvisors.com
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