Stop Building to Codeand Save Money

Steve RommeMarch 2017

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Agenda

• Cost of Ownership

• Code Compliance

• Saving Money

• Summary

• Next Steps

2

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

4

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

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

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

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

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

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

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

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

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

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

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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