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How to Finance an Energy-Efficient New Home

Consider an energy-efficient mortgage, which allows homebuyers to borrow more money to help pay for energy efficiency improvements.

Building a New Home or Addition?

Reap the benefits of efficient new construction and take advantage of incentives and resources offered by your local utility and private organizations.

Energy-Efficient New Homes Save You Money Because They're Built to Use Less Energy

ENERGY STAR qualified new homes are designed to be 15% more efficient than a comparable home, based on the California's Title 24 standards. The ENERGY STAR label lets you know that these energy-efficient homes are more comfortable, more durable, and cost less to own because they will help you save money on your energy bills.

With ENERGY STAR appliances and lighting fixtures you can use 10 to 50% less energy than standard models, increasing the efficiency of your new home even more.

A Features Checklist for Energy-Efficient Homes

Refer to the following checklist when talking with builders to find out which efficient features are available in their ENERGY STAR qualified new homes.

All ENERGY STAR labeled homes must be 15% more efficient than required by state energy code but each builder achieves this energy savings through a unique set of energy-saving features.

  • High-Efficiency Water Heaters: Water heating can account for 15% of a home energy bill.

    In a new home, look for an Energy Factor (EF) of 0.60 or more for a gas water heater and 0.91 or higher for an electric water heater. The higher the EF rating, the more energy efficient. Or, consider an instantaneous tankless gas water heater, which can have an EF rating of 0.80 and doesn't use any energy to store hot water when you're not using it.

  • High-Performance Windows: As much as 30% of heating and cooling is lost through inefficient windows.

    ENERGY STAR qualified windows can save more than 10% of your total annual energy costs. They can also help protect against sun damage and reduce noise levels in the home. Ask the builder to select windows, doors and skylights with spectrally selective, low-emissivity glazing.

  • Energy-Efficient Heating and Cooling Equipment: Helps save energy all year long, in any kind of climate.

    Choose a furnace with an annual fuel utilization efficiency (AFUE) of at least 90%, and an air conditioner with a seasonal energy efficiency ratio (SEER) of at least 13 and an Energy Efficiency Rating (EER) of 11 or higher. As an alternative to an air conditioner, consider a whole-house evaporative cooler for hot and dry climates.

  • Proper Home Sealing: Gets rid of air leaks, which can save 10% or more on your energy bill by preventing lost heat or cooling.

    The average home has hundreds of small holes where air escapes. All together, these holes can add up to the equivalent of leaving a window open all year long. Proper sealing will keep you comfortable all year round, reduce your energy bills, and improve indoor air quality by preventing moisture, dust, pollen and insects from entering your home.

  • Upgraded Insulation: Can reduce energy usage by as much as 20%.

    Properly-installed insulation helps minimize heat flow through walls, ceilings and floors — keeping a home comfortable year-round. Look for an "R-value" higher than R-13 for walls and R-19 for ceilings. The higher the R-value, the greater the energy efficiency.

  • Tightly Sealed Air Ducts: Can reduce a home's heating and cooling costs by up to 20%.

    Tightly sealed air ducts, especially in unconditioned spaces such as attics, are key to a home's energy efficiency.

  • Radiant Barriers: Reduces air-conditioning costs by up to 15%.

    Summer heat penetrating through a roof can increase attic temperatures to 140&def;F and work against efforts to keep a home cool. A radiant barrier blocks this heat, reduces the need for air conditioning and lowers energy bills.

  • For energy savings beyond the requirements for an ENERGY STAR labeled home, ask about upgrade packages that include:

    • ENERGY STAR qualified dishwashers, clothes washers and refrigerators. They incorporate advanced technologies and use 10 to 50% less energy and water than standard models.
    • ENERGY STAR qualified light fixtures, which come in a wide range of styles. Compact fluorescent light bulbs use about two-thirds less energy to operate than standard incandescent light bulbs.

Verify your home's eligibility with ENERGY STAR guidelines

Since ENERGY STAR labeled homes do not look different than other new homes, it is important to verify that the home is ENERGY STAR qualified. In addition, some sub-divisions include both standard efficiency homes and ENERGY STAR qualified homes. Ask the builder for verification that the home is 15% more efficient than code. Homes meeting the strict guidelines can be identified by an ENERGY STAR label on the circuit breaker box or through a certificate.

Use Flex Your Power's locators to find Rebates, Incentives & Services

Utilities and private organizations in California offer residents incentives and technical assistance for many types of energy-efficient home upgrades. Search for rebates, incentives and services.