Home Energy Scoring in Portland's Housing Market

The Home Energy Score, developed by the US Department of Energy, explains how homes perform compared to others in the United States in similar climate zones. To receive a score, homeowners hire an authorised home energy assessor to perform an onsite assessment that scores the home on a scale of 1 to 10. Home sellers receive a report that estimates energy use, associated costs, and affordable solutions to improve the home’s efficiency.

Through the  Home Energy Score Ordinance, Portland’s home-owners must now obtain and disclose their Home Energy Scores in their real-estate listings. This was initiated as a long-term, market transformation policy that shines a light on previously invisible energy information early in real-estate transactions, when it is most actionable. The policy is intended to stimulate consumer demand for energy efficiency upgrades and reduce carbon emissions.

The Home Energy Score program is now in its second year of implementation. Over 11,000 scores have been disclosed and the market is beginning to show early signs of compliance with and acceptance of the new requirement.

What is the policy? How does it work?

The innovative elements of City of Portland Home Energy Score include:

• Time-of-listing requirement: This means that prospective buyers are provided with detailed information not only about the home’s energy performance, but also recommendations for affordable energy efficiency upgrades that would improve the home’s performance. New homeowners are among the most motivated to make upgrades to a home. Sellers can benefit from this information too, especially in times of market downturn, when energy upgrades can increase a home’s attractiveness to potential buyers. In either case, early in the real-estate transaction is a highly actionable time for all parties. This policy component is unique to Portland. Other jurisdictions have required energy disclosure at later stages in the transaction, which evaluation has found to be too late for anyone to act on the information.

• Asset score: An asset score is akin to a kilometres-per-gallon rating that’s given to automobiles to help consumers understand fuel efficiency and costs. As asset-based rating increases the comparability between homes, as it assesses the home based on its size, shell condition and mechanical equipment, rather than on the behaviour of past occupants (which can vary greatly). Many other communities rely on bill disclosure rather than an asset score, but asset scores are best practice.

• Comprehensiveness: Addresses both new construction and existing homes. Some cities have focused on one sector or the other, but Portland’s policy is one of the most comprehensive.

What are the CO2 reduction goals?

Home energy scoring and disclosure are among the few policy tools available to local governments that can lead to residential carbon emission reductions. This is especially true in jurisdictions like Portland, where the city does not control building and energy codes, nor does it have much control over the utility sector. Home Energy Score is a long-term market transformation policy that will take a decade or two to have an impact. The ultimate goal of this policy is to increase substantially the adoption of residential deep energy retrofits that will reduce carbon emissions from homes by 2040.

Judging from analyses made by the municipality, the Home Energy Score could reduce residential carbon emissions 25% by 2030 (approximately 5 million tons of CO2e).

It will require upgrading tens of thousands of homes on an annual basis to reach this goal. This represents a level of consumer adoption of energy efficiency that vastly outpaces typical market activity. In 2012, Portland achieved a market high of 2,000 energy retrofits conducted in one year. These projects were orchestrated by Clean Energy Works, a weatherisation and jobs program developed and implemented by the City and funded with a one-time infusion of $20 million from the federal government. Market activity in recent years has fallen well short of these historical highs. Home Energy Score is intended to reinvigorate residential market activity by making explicit energy performance and cost information and by providing a roadmap of cost-effective energy upgrade opportunities for either the seller or the new homebuyer.