SAVE Act: Building Energy Efficiency into Home Value
Statement by Alliance to Save Energy President Kateri Callahan On the Sensible Accounting to Value Energy (SAVE) Act
Washington, D.C., October 20, 2011 – “Every so often, a policy proposal turns out to be every bit as good as it sounds – and I’m pleased to say that the bipartisan SAVE Act (S. 1737) co-sponsored by Sens. Michael Bennet (D-Colo.) and Johnny Isakson (R-Ga.) is a prime example. S. 1737 would encourage energy efficiency by recognizing that an efficient home can save its owner tens of thousands of dollars in energy costs over the life of a mortgage – and it’s a national policy that won’t cost taxpayers one dime nor expand government one inch!
“For the first time, the cost of home ownership that is used to determine the affordability of a mortgage would include energy costs along with mortgage payments, property taxes, insurance and, where applicable, condo and homeowner association fees. This is appropriate, because energy costs are typically the second highest cost of owning a home after the mortgage payment itself. However, a new home that is 30% more efficient than an average house will save the homeowner about $20,000 over the life of a 30-year mortgage.
“In addition, an efficient home is worth more, and should therefore qualify for a larger mortgage. But the current appraisal system almost never includes that value. Under the SAVE Act, the present value of the energy savings – as much as $10,000 in the above example – would be added to the home’s value in determining the mortgage cap. While the price of the house will be a little higher, to cover the builder’s up-front costs, the homeowner will save more in utility bills. Both come out ahead.
“The SAVE Act has garnered support from homebuilders, energy efficiency advocates and business and environmental groups – constituencies whose views don’t always coincide. It joins the ranks of other bipartisan energy-efficiency proposals – notably S. 1000, the Shaheen-Portman bill on building efficiency, the Bingaman-Murkowski bill on consensus standards and the Udall-Brown bill on utility bill information – in harnessing the power of energy efficiency to help consumers, create jobs and improve the environment.
“If Congress can agree on anything, it should be on saving money with energy efficiency. The Alliance to Save Energy urges Congress to pass the SAVE Act and send it to President Obama as quickly as possible.”