Spring is around the corner, and with it comes the prime home buying season. As a real estate broker, I’m seeing the customary surge in business and am anticipating the coming months will be busy with marketing and showing homes. Keeping in mind my client’s priorities, I look for the usual things any good realtor does but I’m also keeping an eye out for well insulated building components, energy efficient appliances, a carefully sealed building envelope, heating system efficiency and fuel types, and optimum southern exposure for free heat gain during the winter.
Before I embarked on this new course in real estate, I was employed by an international consulting firm that conducts energy performance audits for Montana’s gas and electric utility customers. The audit included a “blower door” test to identify air leaks, a comprehensive gas appliance safety & efficiency inspection and an insulation evaluation. We installed energy and water saving measures and provided extensive customer education with suggestions tailored to improve the comfort and energy efficiency of each individual home.
From my personal experience, and from working with dozens of real estate clients each year, I know firsthand how important energy efficiency is to a homeowner’s bottom line. It’s may not be the first thing people think about when they shop for a home, but it should be close to the top. If you don’t consider the cost of operating the home, it will be tough to be comfortable and feel good about your investment when that first power bill hits your mailbox. And if history is any guide, there’s no reason to expect energy prices will ever really go down.
Meanwhile, the Montana Legislature and our Governor are faced with a familiar series of predicaments. Energy costs are an increasingly hard burden for Montanans to bear. Our nation needs a long-term strategy for energy security that doesn’t depend on the volatile Middle East or finite domestic energy supplies. It’s about time that we set our energy priorities straight in order to save money, plan for our children’s future, and protect our air, water, and the landscapes we treasure. On top of all that, Montana needs jobs.
The cheapest and quickest response to these problems lies in making investments in energy efficiency. Efficiency and conservation have always made sense to Americans: why waste precious natural resources and throw away hard-earned cash when there’s a better way?
Unfortunately, there are a couple of bills moving through the Legislature that will leave us with a whole new generation of inefficient homes and high utility bills, and do away with popular tax credits for energy conservation.
Senate Bill 159, sponsored by Senator Jason Priest of Red Lodge, eliminates significant future energy savings by setting an arbitrary five-year payback requirement for improvements to Montana’s energy efficiency standards. Energy codes play a crucial role in helping to ensure that homebuyers don’t get stuck paying exorbitant energy bills, and they lower energy costs for the business community, making Montana more economically competitive. This bill erodes the consumer protections provided by our energy codes.
As a practical matter, almost all of the substantial efficiency improvements on the horizon will pay for themselves in five to twenty years and therefore would not meet the proposed limit. For example, significant changes to insulation levels would be stifled. By mandating a five year payback on efficiency measures in buildings that last more than 75 years, this bill will slow the industry-wide adoption of energy saving materials and building practices, putting Montana’s building industry behind the rest of the country.
Ultimately, it’s cheaper to build a home right the first time, than to go back and fix it later, but with Senate Bill 159 we’re setting homeowners up for a lot of expensive work down the road.
Senate Bill 253, sponsored by Senator Bob Lake of Hamilton eliminates Montana’s popular conservation tax credit. In the last tax year, more than $8.4 million dollars was claimed in income tax credits for things like insulation, new windows, and more efficient heating systems. An individual can claim up to $500 each year, and a couple can claim $1,000. It is clear that these tax credits are working to encourage investments that will pay dividends for years to come in the form of energy savings, increased property value, and Montana jobs. I can attest to this tax credit salvaging more than just a few of my transactions, when the negotiations came down to a new heating system and I was able to use that tax credit as a means to encourage a seller or buyer to absorb a portion of that cost.
As a realtor with a commitment to housing affordability and energy conservation, I hope the Legislature and the Governor can see the wisdom in supporting a vibrant and innovative building industry that provides good paying jobs, makes housing more affordable, and helps to build our energy independence.
In Helena, I’m Freda Wilkinson, an Ecobroker Certified real estate professional. I’m speaking today on behalf of AERO, Montana’s Alternative Energy Resources Organization. Find out how you can help at aeromt.org. Thanks for listening.
This commentary aired March 31, 2011 on Montana Public Radio.