5 ms·

I've often thought that the price of the house should include the first thirty years of projected energy use. You then get a monthly rebate to pay for energy us

I've often thought that the price of the house should include the first thirty years of projected energy use. You then get a monthly rebate to pay for energy use (or to cover taxes in escrow). This would strongly incentivize energy efficient homes because it would show up in the sticker price (and included in a mortgage). I see two large sticking points with the idea: 1. it would obviously drive up the price of new housing. 2. I don't know how easy it would be to game an energy audit (which would have to locale specific).

ipython 4y ago
I like the concept but agree with your point (2). Building codes are already strict and yet often the tract houses are still shoddily built.
- biomcgary 4y ago
  I think the problem with most building codes (that I've encountered) is that they focus on process (use this material, this way) vs outcome (require this much energy, this resistance to fire). This makes building predictable, but stifles innovation. Personally, I live in a passive solar strawbale insulated house that reclaims greywater for an indoor garden, which is very awesome but was quite expensive to build. I bought it for below the build cost after it went into foreclosure after the 2008 crash (so the 2 acres it's on was essentially free).
  - lazide 4y ago
    Innovation in building has a long history of product failures, angry owners, and lawsuits/followup laws banning or restricting it. Generally, it’s a bad idea to be using any construction product unless it’s been around at least a few generations without major issues.
    - nordsieck 4y ago
      > Generally, it’s a bad idea to be using any construction product unless it’s been around at least a few generations without major issues. In your opinion, does that apply to stuff like 3d printed concrete houses where the material is very old but the application technology is extremely new?
      - lazide 4y ago
        100% it does. Buckminster Fuller’s geodesic homes are another - typical materials in atypical layouts. Tons of weird issues, from leaks in difficult to access areas, to weird condensation problems with no solutions. Every building has problems. New styles of buildings or new materials create new problems with no known solutions (or no solutions at all), a surprising percentage of the time.
greesil 4y ago
Speaking anecdotally and within the confines of the bay area, the problem here is existing stock.
- epa 4y ago
  Tax disincentive to fix your house. Prop 13 leads to poor quality housing.
  - greesil 4y ago
    Oh, everyone has a big PG&E bill here unless you're fortunate enough to be in Santa Clara. I'm thinking about landlords and old housing stock.
jnsaff2 4y ago
The interesting upside of your idea is that the energy price is included. 1. bank has more confidence in credit worthiness and can offer better rate 2. customer is more knowledgeable 3. energy cost can be hedged on the futures market
- pgwhalen 4y ago
  Who is hedging energy cost in this scenario? As I understand if, the risk isn’t actually moving from the homeowner, it’s just an accounting trick where they pay upfront but get a tax rebate. My point being, if homeowners aren’t hedging energy costs now, why would they begin to?
  - jnsaff2 4y ago
    Bank? Developer? Whoever has to package it in and therefore has to hedge it as well.
    - pgwhalen 4y ago
      You’re missing my point, or you’re reading GP in a way that I am not. Paying up front for expected energy usage does not place the risk (future price variation) on the bank. It’s just a lump sum. There’s nothing for the bank to hedge.
      - jnsaff2 4y ago
        I totally just wrote down my thoughts that came into my mind reading the GP. Not arguing with you. Tho I don't see how you could ever "pay up front" for energy for that long of a period without someone doing a futures deal. As a person especially today the energy prices fluctuate wildly. Edit: making a hedge for your energy for the lifetime of the building (or yourself) does not in any way negate the idea of the GP. TCO is still made explicit and the energy part can be compared with other buildings and smarter decisions about insulation will be made which should drive developers into building better.
phpisthebest 4y ago
So you want people to pay upfront, on a variable cost, variable use consumable @ 4-6% interest rate. That seems like a bad idea soo many fronts. Hell I do not even like the annualized utility plans the companies offer that average out utility costs over the year No, I want to pay exactly what I use, as I use it. No more, no less
- salamo 4y ago
  In practical terms I don't even see how it would make sense. The median mortgage is $1100 per month. Say the average monthly energy bill is $200 on top of that, and interest is 5%. Instead of paying $200 to the utility company, I pay $200 + interest to the bank, and the bank just keeps the interest?
salamo 4y ago
Setting aside gaming the energy audit, I just don't see how it's possible to price energy 30 years out. The price of any one energy source fluctuates, the makeup of energy used can change (replacing a gas furnace with an electric one), and the overall amount can change (more people = more energy used). Another issue is that you'd be putting 2022 dollars in escrow to be paying energy bills in 2052. So if the escrow doesn't grow at at least the rate of inflation, home owners are losing real purchasing power. Maybe a simpler and more tractable solution would to just require projected energy costs to be listed in any home ads.
- biomcgary 4y ago
  > Maybe a simpler and more tractable solution would to just require projected energy costs to be listed in any home ads. I don't think my proposal could actually work as written above. Your suggestion is an excellent starting point for something that might actually work. My rationale for figuring a out a mechanism to include the energy cost up front is that many people only own a home for a few years, so they are less motivated to spend money on energy savings that they will never realize. Currently, when people shop for a home in a certain price bracket, they won't price in the energy savings of a better built home. If energy pricing was mandated in every ad, it might help. If the total cost of the house plus energy and taxes for the next 30 years (just projecting from current rates) was the top line number posted in ads and you had to dig down for details, it might be adequate incentive to nudge the market toward energy savings.
Kon-Peki 4y ago
I live in a state where solar installation comes with an upfront payment for the estimated market value of the expected tradable renewable energy credits your system will generate over the next 15 years. The solar installers sell it as a rebate of approximately 33% of the purchase price - you get a check in the mail a few months later. But behind all that is a really complicated process that the homeowner doesn't understand, buried in a bunch of contractual fine print that nobody reads. What happens when you sell the house? The closing needs to accurately prorate prepaid items that one side owes to the other. In the case of solar, the seller needs to pay the buyer for the portion of the "rebate" that hasn't been "used". In your scenario, the buyer needs to pay the seller for the energy that has been paid for but not used. This is a big issue that can't be solved with an energy audit. Your house will now need to be permanently connected to the internet so a 3rd party can collect the energy data. They aren't going to do that for free! What we are seeing with solar is that the whole process is opaque enough that it supports a collection of companies who structure things so that you get just barely enough of a discount for it to be worth it, and pocketing the rest of the savings for themselves.
- biomcgary 4y ago
  Sorry, my description wasn't clear. When a house is built and sold for the first time, the initial owners have to put money into escrow equivalent to 30 years worth of projected energy use (at current rates for electric and gas). They aren't pre-purchasing energy. The escrow pays out at a fixed rate over 30 years to whoever currently owns the house. No need to track energy usage. More efficient houses (insulation, solar panels, etc) will have much less projected energy use, so far less money needs to be put into escrow, which would make new efficient houses cheaper than new less efficient houses. Unfortunately, it does nothing about existing stock.

ipython 4y ago

I like the concept but agree with your point (2). Building codes are already strict and yet often the tract houses are still shoddily built.

biomcgary 4y ago
I think the problem with most building codes (that I've encountered) is that they focus on process (use this material, this way) vs outcome (require this much energy, this resistance to fire). This makes building predictable, but stifles innovation. Personally, I live in a passive solar strawbale insulated house that reclaims greywater for an indoor garden, which is very awesome but was quite expensive to build. I bought it for below the build cost after it went into foreclosure after the 2008 crash (so the 2 acres it's on was essentially free).
- lazide 4y ago
  Innovation in building has a long history of product failures, angry owners, and lawsuits/followup laws banning or restricting it. Generally, it’s a bad idea to be using any construction product unless it’s been around at least a few generations without major issues.
  - nordsieck 4y ago
    > Generally, it’s a bad idea to be using any construction product unless it’s been around at least a few generations without major issues. In your opinion, does that apply to stuff like 3d printed concrete houses where the material is very old but the application technology is extremely new?
    - lazide 4y ago
      100% it does. Buckminster Fuller’s geodesic homes are another - typical materials in atypical layouts. Tons of weird issues, from leaks in difficult to access areas, to weird condensation problems with no solutions. Every building has problems. New styles of buildings or new materials create new problems with no known solutions (or no solutions at all), a surprising percentage of the time.

greesil 4y ago

Speaking anecdotally and within the confines of the bay area, the problem here is existing stock.

epa 4y ago
Tax disincentive to fix your house. Prop 13 leads to poor quality housing.
- greesil 4y ago
  Oh, everyone has a big PG&E bill here unless you're fortunate enough to be in Santa Clara. I'm thinking about landlords and old housing stock.

jnsaff2 4y ago

The interesting upside of your idea is that the energy price is included. 1. bank has more confidence in credit worthiness and can offer better rate 2. customer is more knowledgeable 3. energy cost can be hedged on the futures market

pgwhalen 4y ago
Who is hedging energy cost in this scenario? As I understand if, the risk isn’t actually moving from the homeowner, it’s just an accounting trick where they pay upfront but get a tax rebate. My point being, if homeowners aren’t hedging energy costs now, why would they begin to?
- jnsaff2 4y ago
  Bank? Developer? Whoever has to package it in and therefore has to hedge it as well.
  - pgwhalen 4y ago
    You’re missing my point, or you’re reading GP in a way that I am not. Paying up front for expected energy usage does not place the risk (future price variation) on the bank. It’s just a lump sum. There’s nothing for the bank to hedge.
    - jnsaff2 4y ago
      I totally just wrote down my thoughts that came into my mind reading the GP. Not arguing with you. Tho I don't see how you could ever "pay up front" for energy for that long of a period without someone doing a futures deal. As a person especially today the energy prices fluctuate wildly. Edit: making a hedge for your energy for the lifetime of the building (or yourself) does not in any way negate the idea of the GP. TCO is still made explicit and the energy part can be compared with other buildings and smarter decisions about insulation will be made which should drive developers into building better.

phpisthebest 4y ago

So you want people to pay upfront, on a variable cost, variable use consumable @ 4-6% interest rate. That seems like a bad idea soo many fronts. Hell I do not even like the annualized utility plans the companies offer that average out utility costs over the year No, I want to pay exactly what I use, as I use it. No more, no less

salamo 4y ago
In practical terms I don't even see how it would make sense. The median mortgage is $1100 per month. Say the average monthly energy bill is $200 on top of that, and interest is 5%. Instead of paying $200 to the utility company, I pay $200 + interest to the bank, and the bank just keeps the interest?

salamo 4y ago

Setting aside gaming the energy audit, I just don't see how it's possible to price energy 30 years out. The price of any one energy source fluctuates, the makeup of energy used can change (replacing a gas furnace with an electric one), and the overall amount can change (more people = more energy used). Another issue is that you'd be putting 2022 dollars in escrow to be paying energy bills in 2052. So if the escrow doesn't grow at at least the rate of inflation, home owners are losing real purchasing power. Maybe a simpler and more tractable solution would to just require projected energy costs to be listed in any home ads.

biomcgary 4y ago
> Maybe a simpler and more tractable solution would to just require projected energy costs to be listed in any home ads. I don't think my proposal could actually work as written above. Your suggestion is an excellent starting point for something that might actually work. My rationale for figuring a out a mechanism to include the energy cost up front is that many people only own a home for a few years, so they are less motivated to spend money on energy savings that they will never realize. Currently, when people shop for a home in a certain price bracket, they won't price in the energy savings of a better built home. If energy pricing was mandated in every ad, it might help. If the total cost of the house plus energy and taxes for the next 30 years (just projecting from current rates) was the top line number posted in ads and you had to dig down for details, it might be adequate incentive to nudge the market toward energy savings.

Kon-Peki 4y ago

I live in a state where solar installation comes with an upfront payment for the estimated market value of the expected tradable renewable energy credits your system will generate over the next 15 years. The solar installers sell it as a rebate of approximately 33% of the purchase price - you get a check in the mail a few months later. But behind all that is a really complicated process that the homeowner doesn't understand, buried in a bunch of contractual fine print that nobody reads. What happens when you sell the house? The closing needs to accurately prorate prepaid items that one side owes to the other. In the case of solar, the seller needs to pay the buyer for the portion of the "rebate" that hasn't been "used". In your scenario, the buyer needs to pay the seller for the energy that has been paid for but not used. This is a big issue that can't be solved with an energy audit. Your house will now need to be permanently connected to the internet so a 3rd party can collect the energy data. They aren't going to do that for free! What we are seeing with solar is that the whole process is opaque enough that it supports a collection of companies who structure things so that you get just barely enough of a discount for it to be worth it, and pocketing the rest of the savings for themselves.

biomcgary 4y ago
Sorry, my description wasn't clear. When a house is built and sold for the first time, the initial owners have to put money into escrow equivalent to 30 years worth of projected energy use (at current rates for electric and gas). They aren't pre-purchasing energy. The escrow pays out at a fixed rate over 30 years to whoever currently owns the house. No need to track energy usage. More efficient houses (insulation, solar panels, etc) will have much less projected energy use, so far less money needs to be put into escrow, which would make new efficient houses cheaper than new less efficient houses. Unfortunately, it does nothing about existing stock.