There is no denying the benefits that come with investing in a home that has undergone sustainable redevelopment.
Sustainable redevelopment refers to a home that has been built, rehabbed, or remodeled to include several sustainable, or “green” features, thus making the home not only more desirable, but also better for the environment. The “go green” trend has been gaining popularity since 2011 among home builders, homeowners, and investors, and is not expected to stop anytime soon. In fact, by 2020 it is anticipated that the majority of home builders will be constructing at least 60 percent of their homes utilizing sustainable features.
So why is this trend in such high demand? Because homeowners who buy a sustainable real estate development are reaping the endless rewards.
Before delving into the cost-saving benefits sustainable redevelopment can provide for homeowners, it is important to first examine how “going green” has a lasting effect on the environment.
Did you know that the United States is currently saving 56 percent of its energy due to sustainable technologies and policies already in place? Just imagine if even more homes and commercial properties were redeveloped to include environmentally friendly, energy efficient features; the U.S. would be able to preserve even more of its energy. If “going green” was not as popular as it is, the U.S. would be forced to spend money importing assets like oil, natural gas, or coal, which would eventually drain our own natural resources.
Energy efficiency also aids in decreasing pollution. The U.S. consumes so much energy – from power plants to automobiles – which, overtime, pollutes the air with harmful chemicals that hurt our environment. However, according to a study conducted by ASE (The Alliance to Save Energy), “investments in energy efficiency across the biggest sectors of our economy could abate up to 1.1 gigatons of greenhouse gas emissions annually, which is equal to taking all U.S. cars and trucks of the road for one year.” Clearly, sustainable redevelopment plays a key role in reducing our carbon footprint and encouraging environmental growth.
Now that we’ve covered just a handful of ways sustainable redevelopment improves the environment, let’s talk about what you really want to know: how energy efficiency benefits you, as a homeowner:
Sustainable Redevelopment And The Homeowner: Two Of A Kind
If you are a homeowner ready to purchase your first home, I highly recommend considering a property with energy efficient features. Not only will these features give you a piece of mind – you will be a contributing factor in helping to better the economy – they also make a home more valuable if you plan to resell. In fact, homes with sustainable components can sell for up to 10 percent more than homes with no energy efficiency. This usually bares the question, are energy efficient homes more expensive to purchase? The simple answer is yes. Homes that are sustainable are typically three percent to 10 percent more expensive (depending on which energy efficient features are included) than homes without. The complicated answer, however, is no. Although the cost of a sustainable home can be more costly up front, they are always less expensive to own. Homeowners living in homes that utilize less than five percent net energy will save up to $1,260 in one year, or $25,378 in 15 years – that makes sustainability sounds pretty good, doesn’t it?
Not only does sustainable redevelopment help homeowners save money by reducing their energy bills, it also qualifies them for some fairly hefty tax deductions.
Installing energy efficient appliances into a home – i.e. HVAC, LED & CFL light bulbs, washer and dryer, toilets, shower heads, insulation, appliances, windows and faucets – is considered a “capital improvement.” Homeowners with “capital improvements” qualify for a tax deduction as high as 10 percent of the costs of the appliances up to $500.
Artificial turf is another way homeowners can adopt sustainability and earn tax deductions. Although artificial turf can be costly up front, on average $6.95 per square foot (or $4,170 for 600 sq ft), it is just a one time investment. On the other hand, it costs, on average, $1,745 annually to upkeep an equal amount of square footage of real grass (or over $11,000 after five years).
If homeowners are really striving to achieve zero net energy, installing solar panels is another great way to earn tax deductions. Solar paneling can, again, be quite costly upfront; over $5,000 initially. However, the large tax deductions and overall ROI make it well worth it. The installation of solar panels also adds, on average, $16,000 to the resell value of an average home. So let’s break it down: if you want to cover 70 percent of your electric bill – assuming your bill is close to the national average of $100 per month – the total cost of paneling will be approximately $19,000, which includes everything from materials and inspections to labor. This might seem like a large number, but when you deduct the tax break and consider the decreased electricity bill, the project price drops dramatically (the reduced electricity bill can save up to $840 per year). Keep in mind, the homeowner gets to decide how many panels he or she wants to install. You can find individual panels for as low as $200 each, depending on the kilowattage, plus installation and inspection costs. Just remember, the more wattage the lower your electricity bill.
Tax deductions for solar paneling cover about 50 percent of the total project. The LADWP Solar Incentive Program covers up to $4,860 on a project of $10,000 or more. On top of that, homeowners with solar paneling receive a 30 percent federal tax credit. So using the example above, after calculating total tax breaks, the cost of the project would go from $19,000 to approximately $10,000.
If all this money saving talk is not enough to convince you to jump on the “green” train, how about the fact that an energy efficient home will have an overall positive effect on your quality of life. A properly insulated home, which is a feature in almost all sustainable homes, will keep you comfortable from summer to winter. If you’ve got insulated ceilings, floors, windows, and walls, your home will do a better job of keeping cool in the heat and keeping warm in the cold. You will also notice that you have to change your energy efficient lightbulbs a whole lot less, which is great for homeowners who are always on the go.
There is no doubt that sustainable redevelopment is where the future is headed, so it would be wise to embrace the train now and consider an energy efficient home for your next investment.
Here are 10 easy ways to improve your energy efficiency today:
- Use ceiling fans instead of AC
- Make sure your doors and windows are tightly shut when the AC is on
- Install low-flow shower heads and toilets
- Take shorter showers
- Be conscious about how long your lights are on
- Replace all lights with energy efficient LED or CFL bulbs
- Set your oven to convention mode
- Wait to do laundry until you’ve accumulated bigger loads
- Air dry your clothes or use your dryer’s low temperature setting
- Take advantage of the sun to light up, and warm up, your home