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If a Passive House is so cost-effective, why isn’t everyone doing it?

anderslewendal | Posted in Energy Efficiency and Durability on

We build over 1 million homes a year and only a handful are PHPP. Either the cost of fuel is too low or the cost of a Passive house is too high. Apparently, the ROI does not cut it.

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  1. GBA Editor
    Martin Holladay | | #1

    There are lots of cost-effective measures that Americans fail to take advantage of -- not just Passivhaus specifications. The reason is simple: most people prefer to spend less money up front, even if their long-term costs will be higher as a result of their short-term perspective.

    If someone is buying a home, remember that the average American moves every 7 years. It's hard to make a long-term investment if you know you're going to move soon.

    Again, this doesn't really have anything to do with Passivhaus specifications. Think about compact fluorescent lamps. Many people would still rather buy an 89-cent incandescent instead of a $3 CFL.

  2. anderslewendal | | #2

    You are right. The question is: How do we change that behavior or thought process? If I explain it well, most of my clients build at least a PGH. I think I read on your site that the average home in America leaks 30% of its heat to the outside. If the average American leaked 30% of its fuel from their gas tanks, I am guessing they would stop by a mechanic and fix it. We probably only keep our cars for an average of 7 years (that's a guess). If we can show a reasonable ROI on efficiency measures, we should be able to convince our home buys to agree. Banks should understand the numbers? If appraisers used the energy addendum, we could show some value to the banks too.

    I have nothing against the PHPP except that no one wants to use it. I can't make the numbers work either.

  3. jinmtvt | | #3

    I don't want to push agains't builders, designer and engineers too much again,
    but they too have part to do with the fact that not so many passivhaus or super insulated houses/buildings exist.

    Only from the few examples on this site,
    we've already learned the majoration of costs attributed to designer/architects/pros when going for a "green " building.
    It also seems to be much more exagerated in USA compared to easter Canada, where it is much easier to bypass the costs of many professionals when building your own home.

    Then, there is not as much to gain from using a fixed standard such as PH when you live in a moderate climate such as 3/4 of USA.

    the ROI is not quite the same for zone 8 vs zone 4.

    As MArtin pointed out, it is very hard to convice regular folks of anything more than their near future if an investment has a 10+ years payback period, most will chill out.

    Right now we are at a position where building costs need to get down first,
    then PH or other similar efficiency/performance standards will be much easier to push.

    I've seen many projects in the 400K-600K$ range , where material costs where probably under 150K$ ... and i would never pay more than 250-300k$ for the same building.

    Payments on a 400K$+ house are prettty steep for the average household,
    and it ain't going to get better at the rate good jobs get cut around here.

    But i want an Iphone5c something NOW , my 5s is so out now ... ( NOT )

  4. jinmtvt | | #4

    Martin : i've been trying to convice friends recently of purchasing the HD 30$( after gov rebate ) CR/LR6 cree spots without success ( and i mean without ANY success ...none has done the move yet )
    And it takes only 30 secs using very basic maths to figure out they are going to pay themselves rather quickly ( equivalent incan light with the fixture costs almos the same neway )

    It wasn't hard to convince myself to purchase 60 of those 2 years ago when HD in USA had a sale for new product. :) ( where still selling for 75-85$ here in canada back then )

  5. Expert Member
    Dana Dorsett | | #5


    Hell, I'd be thrilled if most of the homes built actually met IRC 2012 CODE MIN!

    The average US-'merican moves every 7 years, but more than half of US home-owners have lived in them for more than a decade, and more that 25% of home owners have held onto the place for 20 years or more.

    Most home buyers are ignorant or apathetic (or both) about energy use, until there is a big round of energy price inflation, as happens from time to time. Only a very small percentage (the accounting math-nerds and the energy nerds) run the net-present-value (NPV) analysis even on custom homes, let alone trying out the numbers on already build shoulda-been-code-min-but-probably-aren't-really tract homes or "starter" homes. If one analyzes the actual purchasing behavior of consumers, things energy related have a discount rate on the order 60% or higher when analyzed on a NPV basis, which is pretty pathetic, extremely short sighted thinking. If they did the actual NPV to break even at a 7 year occupancy the discount rate would be nearly an order of magnitude lower.

    Short-termers are all about resale value, which given the purchaser behavior, puts a near-zero premium on efficiency.

  6. wjrobinson | | #6

    Builders build to the market. I stand with most builders in my area as doing a very good job verses price.Get in the business and you will see prices are not high. Starting with $50,000 in kitchen materials before labor and profit and it's not going to be a home as that is below 4-500,000.

    There are some good examples of homes at a good cost here at GBA if you go to the right tab above.

  7. anderslewendal | | #7

    Dana is mad as hell and I don't blame him. Maybe we need to spend more time convincing Americans that PGH's save them money. Anytime we can show a ROI of at least the average ten year T bill, convincing our clients to buy an energy efficiency improvement should be easy. If every home was commissioned before it went on MLS, buyers would make much more educated decisions.

  8. Expert Member

    Anders, I think the answer owes a bit more to the wider culture. There is surely a bit of cognitive dissonance when you are confronted by a city like Las Vegas or a weekend Nascar event or the traffic streaming from any major city to far flung suburbs and then your builder suggests you think about spending a bit more on low-e windows. It may be the right thing to do but it is at odds with so much else that we see around us.

  9. Robert Swinburne | | #9

    People go to a bank and prequalified for a construction loan. Say $300k. They have a list of what they "need" in their new house which adds up to about $450k. Then begins the process of elimination. They fire the first architect because he won't tell them what they want to hear which is that he can get them all they want in $300k Then they decide to do it themselves and bypass all professional help. Then they end up buying a modular which is being advertised as green but in reality barely meets code. If they still decide to try to build a high quality home, their builder will tell them that double stud construction will add $30 k to the price of the (1200 s.f.) home. He will tell them that rain screen siding details are too complicated and will add 12k to the cost of the home (after you explain to him what rain screen siding details are). He will also tell them that you can't build a home without a boiler. He won't build a house with "that new-fangled cellulose". He will have never heard of Passive House or Pretty Good House or anything like that. He may not even be aware that his state has an energy code.

    This is one architect's experienced perspective.

    Oh and the builder will tell the clients that the house needs to breathe. Then put 6 mil poly v.b. everywhere.

  10. anderslewendal | | #10

    Robert: It is all about education. My current project added a 2x4 wall on the inside of a standard 2x6 frame wall creating a staggered 9" wall with cellulose. The added cost to the job is less than $3000.

    There is no reason why a client, their architect, and builder cannot estimate the cost of a new home within 5% before drawing one line on a cadd program. Building energy efficient homes does not cost much more. Good design, quality construction, and an educated client is all we need. We have to learn how to start our homebuilding relationships better.

    If we can demand better, safer, more energy efficient vehicles, we should also have the capacity to ask for the right balance of cost and energy efficiency in our homes. Unless market forces do not work. If we leaked as much fuel from our cars as we do in our homes, people would be up in arms.

  11. Robert Swinburne | | #11

    @ Anders
    Mostly, I manage to avoid this sort of builder. There are many great builders to choose from where I live and they do most of my work. But I keep running into this sort anyway. There are lots of them out there. My own experience is that the additional costs can be designed out elsewhere, usually through simplification, making the whole project richer. (and more durable)

  12. GBA Editor
    Martin Holladay | | #12

    You wrote, "If we leaked as much fuel from our cars as we do in our homes, people would be up in arms."

    The analogy isn't very precise. We're not talking about leaks, really.

    In 1955, Americans could buy cars that got 18 miles to the gallon. The gas tanks didn't leak.

    Now they can buy cars that get 40 miles to the gallon. The gas tanks still don't leak.

    An older house might require $1,000 of heating fuel per year. The oil tank in the basement doesn't leak.

    A new home might require $300 of heating fuel per year. The fuel pipes still don't leak.

    You can't blame the homeowner or car buyer for not being sure what the ultimate efficiency numbers are going to be. Is it possible to make a 100 mpg car? Yes. But if I can't buy one, so what? It's not really accurate to say that my 40 mpg car is leaky.

  13. anderslewendal | | #13

    Martin: If home buyers purchased energy audits before they bought new or old homes, they would find out which ones were leaky and which were tight. The pipes do not leak but the envelopes and ducting do. You already knew my comment was a metaphor.

  14. user-1072251 | | #14

    "only a handful are PHPP"
    actually, it's a pretty good record for something that was completely unknown to the public only a few years ago. Lots of people are interested in "net zero", superinsulation and the like. What's needed right now is more houses so people can see and feel the difference; and especially more builders and architects that understand what this is all about. We're trying to change a very staid, very conservative industry and yes it is difficult and hard and takes some time. And it can't be about NPV or "returns" which will put most buyers to sleep. We have to be selling comfort, ease of living, low maintenance, low fuel bills - advantages they can see now, not 7 or 12 years from now. Most buyers can't find a builder who knows anything about this, let alone one who can build a sustainable house anywhere near their budget. Those of us who are able, must build good affordable, sustainable houses and get the word out.

  15. anderslewendal | | #15

    Bob: I agree. We have to get the word out. DOE and BSC studies are not getting to the average builder. Educating locally is probably the best bet. We created a local forum (thanks GBA for the idea) to educate our community and builders. It is called Locals mostly do not go to GBA for advice, but may go to a local forum that is staffed by local professionals.

    Regarding NPV's and ROI's, my clients do value the opportunity cost of their resources. Over insulating, for example, is wasteful both fiscally and environmentally. Over insulating creates CO2 in the production and installation that may never be returned in fuel savings. The opportunity cost of over insulating might be buying a Prius and replacing that '85 Dodge with a V8. In the long run, which expense will save more CO2? CO2 are dollars. We have to do the math.

    That said, I am a fan of low ACH and pretty high insulation values.

  16. Expert Member
    Dana Dorsett | | #16

    Martin wrote:

    "An older house might require $1,000 of heating fuel per year. The oil tank in the basement doesn't leak."


    Try 1000 gallons! (At $3.50-4.00/gallon, recent-years New England pricing.)

    Lots of older homes can be heated for $1000/year at buck-a-therm natural gas.

    I don't know of any older home that getsby on $1000 of heating oil (250-300 gallons) $300 of $4 heating oil would 75 gallons- a PHPP might get it that low, but not many others.

    I DO know a family of four in MA living in a 1960s vintage 1200' one story cape w/full basement spending north of three grand a year on oil to keep the place barely above 60F. (I've given them the mini-split talk, AND the air-sealing talk too. Can't push a string.)

    And sometimes the oil tank in the basement of that older house sometimes DOES leak, making it a hazardous waste spill to clean up, which yet another reason to get off that high-carb fuel sooner than later.

    AJ Builder: I'm not faulting the tract home builders for the not-quite-but-almost-code condition of low-priced starter homes- it's a remarkably low margin high risk business in many markets, and developers can only charge what people can pay. In that biz time is money, and building in a hurry doesn't mean it's going to be as tight or the insulation installed as perfectly as when the time-budget allows it. But without upgrades in the code no progress on efficiency can be made, (a few thousand PHPP houses notwithstanding) and without enforcement of the upgraded code those gains can be illusive too. IRC 2012 is no PHPP, but it's actually pretty good compared to the existing fleet of US housing stock, and if all new housing in 2013 were actually being built to that level I'd be satisfied (at least for now. :-) ) Utility prices have to hit the right pain threshold, and buyers have to know the alternatives and press for them before the market will follow building efficiency. Even at (truly painful) $4/gallon+ heating oil I don't see much evidence of the market becoming better educated on it. The perception seems to be that high-R/low-operating cost comfort is only for the 1%.

  17. anderslewendal | | #17

    FYI: Montana is not adopting the 2012 IECC. I am curious if other will. Let me know if you find out.

    If we can get most builders to achieve an ACH 4, we will save a ton of fuel. Back to building for the 1% for now.

  18. Expert Member
    Dana Dorsett | | #18

    Anders: As of this month, IRC 2012 is in effect state-wide in Maryland, Rhode Island, South Carolina, Utah, and Washington.

    Mississippi & Wyoming have adopted it statewide with revisions/imitations, though some local jurisdictions in those states take the whole thing.

    That's 5 of 50 states, with 2 partial.

    About 17-18 state codes are currently (or soon will be) based in IRC 2009. Montana is in the company of 10 other states with codes based on IRC 2006.


  19. user-946029 | | #19

    Anders - Love the "leaky" analogy. I might have to use that sometime, as it evokes a great visual.

    Dana - Love the passion. Keep it up. Will you be at the 2015 I-code hearings this week?

    According to the link provided, the 2009 or 2012 IECC has been adopted in parts or all of 38 states. Unfortunately, adoption & compliance are two different things.

  20. Expert Member
    Dana Dorsett | | #20

    Rome wasn't built in a day- it didn't even BURN in a day! But we don't have a millennium to fix the efficiency or carbon issues either.

    There's no rocket science to tighter higher-R dwellings- builders can figure out how, and WILL when building leaky inefficient crap is no longer an allowable option (at any price point.) Using lowest-cost methods & materials to get to IRC 2012 in tract building isn't a huge cost adder, and the sticker price up-charge to the home-buyer sees is offset by lower utility bills- the annual mortgage + utilities out of pocket numbers can be higher, lower or the same, but won't change a whole lot, but it's a more comfortable home.

    I'm neither a code nor building professional, and wont be attending any code-upgrade hearings any time soon.

  21. user-1140531 | | #21

    If you promote higher performance homes to the public, they will demand it. If they demand it, builders will compete with each other to provide ways to meet a variety of possible options at the lowest possible cost. However, if you force higher performance through broad bush mandates in the codes, there will be no competition between builders to keep the cost down because they all have to provide the same thing. It will be a uniform passed through cost at the highest possible price.

  22. anderslewendal | | #22

    Thanks. Dana: Montana did adopt the 2009 IECC and requires an ACH 4 instead of the code 7. I agree that building tighter homes is a no brainer for all builders. Unfortunately, code and enforcement are two very different things. We do it with our eyes closed now. It really is no big deal and saves clients money. If we can get the public to demand better performance, we will respond. I hope it comes soon.

  23. Expert Member
    MALCOLM TAYLOR | | #23

    Ron, I wonder. Look at wood stoves: The largest increase in efficiency occurred when the EPA mandated it. The effect wasn't limited to the US, but had a knock-on effect on all manufacturers that wanted to compete in that market. Sometimes regulation has its place.

  24. LucyF | | #24

    I wonder if a radical change would occur if women were more educated on high performance homes. I have found some statistics that say the purchasing choices of the family are primarily made by women.

    Women account for 85% of all consumer purchases including everything from autos to health care:
    91% of New Homes
    66% PCs
    92% Vacations
    80% Healthcare
    65% New Cars
    89% Bank Accounts
    93% Food

    This is from a website that calls itself " she-economy - a guy's guide to marketing to women", but it did not quote the specific studies.

    I've never seen an article in Better Homes and Garden or Martha Stewart Living or Southern Living (3 magazines I've read for 20 years or more) that really focused on energy efficiency. For example, in October 2013 Southern Living magazine, there is an article, "Smaller but Smarter" about a house that P. Allen Smith built. It is described as "An eco-friendly cottage by P. Allen Smith shows you 33 ways to get the biggest bang for your buck without sacrificing style". It states, "It would also feature the most up-to-date green construction principles..." "This home is the anti-McMansion."

    The list of 33 ways to get the "biggest bang for your buck" include 6 things that inform the reader about "the latest green construction principles" - the metal roof, HardiePlank siding, efficient windows, rainwater collection, ductless HVAC, and local materials. The major problem is that it is superficial list that does not really inform, inspire perhaps, but not inform.

    We need to get substantive articles in these kind of magazines and websites to inform women so they will look at more than the countertops in the kitchen and subway tile in the bathroom.

    You've been a home builder for awhile, what do you think of this idea? What is your experience selling these features to women?

    P.S. We love that area of Montana. My family usually goes to Big Sky at the end of January, but since we are building my brother's house this year, we are sadly staying home. We will miss it.

  25. anderslewendal | | #25

    Lucy: you are absolutely right about women making a majority of purchasing decisions including new homes. That is a great idea to get more building science or energy efficiency information into women's magazines.

    I also wonder why we do not have a much higher percentage of women home builders in our country. I do not lift anything heavier than my phone. I ask women often who is more intuitive, better at design, more trustworthy, more creative, better at budgets. Is it men or women? Building healthy, affordable and safe homes is an honorable and satisfying profession. Maybe we can make a difference by getting more women into the business.

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