Increase Home Value: Home Energy Ratings and Solar

A home energy rating applies a number score to a home’s energy efficiency, using the Home Energy Rating System (HERS) Index.

The HERS Index is the nationally-recognized scoring system for measuring a home’s energy performance. The HERS Index Score can be described as a sort of miles-per-gallon (MPG) sticker for houses, with long-term energy performance rated on a scale of highly-wasteful (a high score) or energy effective (a lower score). You can learn more about getting a HERS Index Score for your home here. The index is administered by RESNET (the Residential Energy Services Network).

If you add solar — particularly if you can achieve net-zero status — you can dramatically improve your HERS score. This can raise your home’s resale value AND make it easier to get a mortgage. Lenders now know that energy-efficient homes — including those using solar — have a much lower mortgage default risk. 32% lower, according to a study by The University of North Carolina’s Center for Community Capital and the Institute for Market Transformation (IMT). The combination of energy efficiency and solar raises your home’s profile as a low-risk investment. RESNET Executive Director Steve Baden said of the study, “This is a real game changer. The finding that the lower the HERS Score, the lower the mortgage risk should increase consumer, builder, lender, real estate agent and appraiser confidence.”

A widely-accepted guideline for solar impact on home resale value reasons that for every $1 your home saves in annual energy cost , its value rises by $20. Saving $1,500 a year by using solar panels could mean a $30,000 increase in home value.

Take a look at these illustrations of a worst and best HERS scores. The worst-case “150” score means the house is bleeding energy and money. The best-case “0” score means the home is net-zero, producing as much energy as it uses, eliminating its owner’s electric bill, saving over $2,000 each year. You can use the live-action scale here.

WORST CASE — BLEEDING WATTS AND DOLLARS

HERShigh

BEST CASE — PRODUCING ALL IT USES — TAKE A LOOK AT THOSE SAVINGS

HERSlow