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Does Energy Efficiency Always Increase A Home’s Value?

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Does Energy Efficiency Always Increase A Home's Value

If you’re in the process of building or renovating a house, the topic on whether to incorporate energy-efficient aspects will surely come up.

The added expense, however, will lead you to question whether the investment is worth it.

There are numerous benefits in doing so but one of the most attractive reasons builders tell homeowners is that energy efficiency can increase the value of your home. 

Of course, who wouldn’t want that?

However, many people still question whether this is always the case, so here are some reasons that will explain why implementing energy-efficient methods can increase a home’s value. 

The added value of green building features

When you’re faced with a quotation of how much will it cost to add energy-efficient features like solar panels or cavity wall insulation, it may give you pause before deciding to go for it.

You’re not alone because for most people, the high upfront cost of making their homes more energy-efficient can be a barrier.

Will these added features actually translate to financial returns in the future?

According to a UK government study, the answer is yes.

The research released by the Department of Energy and Climate Change or DECC states that energy-saving improvements on a property could increase its value by an average of 14%, and in some parts of England, this increase could reach up to 38%.

This is a monumental increase which means huge monetary rewards for homeowners.  If you’re looking for what this means in terms of cash value, the study found that improving your home’s Energy Performance Certificate or EPC could mean an increase of up to £25,000 in value.

Lower operational costs for the homeowner

Incorporating energy-efficient methods in your home adds value to your home because it automatically lowers the operational costs of the property.

Whatever green improvements you have in mind, it will surely mean savings for you or the homebuyer in the future.

For example, if you install renewable energy sources like solar panels or wind turbines, this means that you won’t have to solely rely on the national power grid for your energy source.

One of the advantages of renewable energy is that it can save you money in the long run because you can produce your own energy. Plus, not only are you benefiting financially from renewable energy but you are also contributing positively to the environment.

Another example is replacing an old boiler with a more energy-efficient one. An outdated boiler is usually inefficient and it can consume a lot of energy. By replacing it with an A-graded energy-efficient model, you can increase your EPC rating and also lower your bills dramatically. While this may be a costly investment, it will actually amount to a significant saving for your home. 

More attractive to the environmentally conscious home buyer

Sustainability is fast becoming a requirement for the new breed of future homeowners. It is not enough that the house is designed aesthetically well or that it is exceptionally functional; home buyers are also looking whether the home is designed with sustainability standards in mind.

If a home is energy efficient, it can attract home buyers who are environmentally conscious. 

These buyers would typically be agreeable to paying more money towards a property if they see how the home features can save them money in the long-term.

Millennials, for example, are well-known to be more environmentally aware and have been shown to pay extra for products and services that are advocating for the environment.  A study revealed that at least 40% of millennials want an environmentally friendly home.

Competitive edge over other homes

If your home is energy efficient, then this gives it a competitive edge over similar properties that do not have the same green features.

Imagine yourself as a home buyer offered two identical properties with the same size, design, and fixtures. The only difference between the two homes is that one of them has energy-efficient features like solar panels on the roof, triple glazed windows, and smart home automation.

If the two homes are offered at the same price, which one will you choose?

Unless you have something against saving money, the no-brainer choice is the home with green features. What this shows is that while energy efficiency may not provide a price increase, which is very rare, then it will still give your home an edge over other non-energy efficient homes in the market. 

According to a survey conducted by the National Association of Home Builders in the United States, energy-efficient strategies made the most-wanted list of what home buyers want in their homes. The study also revealed that energy efficiency would positively influence the purchasing decision of more than 80% of home buyers.

How to increase your home’s energy efficiency

There are various ways to increase the energy efficiency of your home. Here are some recommendations on how to make your home greener. 

1. Swap your light bulbs

The next time you need to replace your light bulbs, consider going for a LED light. While LED light bulbs have become more affordable in recent years, they still cost more at around £8 per bulb compared to a £1 incandescent bulb. However, LED bulbs consume significantly less energy which will mean lower energy bills. LED bulbs also have a longer lifespan lasting an average of 25,000 hours compared to just 1,200 hours of the incandescent bulb.

2. Change your windows

Changing to windows that are double or triple glazed means the heat will not leak through. This means that you will save more on heating bills.

3. Upgrade your boiler

As explained earlier in the article, upgrading an inefficient boiler is a worthwhile investment that could significantly improve your energy efficiency rating.

4. Install solar panels

If you have the financial means to do so, installing solar panels is a worthwhile investment that could instantly add value to your home.

5. Install home automation solutions

If you have a big house, having a home automation system that will control your lighting, heating, Wi-Fi, and other electric appliances will be a great way to ensure that you’re not wasting energy unnecessarily.

Making your home energy-efficient

If you want to increase the value of your home, one sure-fire way to do that is to implement energy-efficient methods that will not only provide you with monetary rewards in the future but will also offer remarkable benefits to the environment. 

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October 2019

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