Demonstration Project - Energy Retrofit

While scanning his remodeling radar screen for new business opportunities not long ago, Bill Asdal, CGR, spotted a flashing light. Three factors - high energy costs; the availability of new, energy-efficient products; and the legions of older houses wasting energy like dripping faucets - converged at this point on the screen to form a brilliant, new remodeling niche.

The more Asdal studied the market potential, the brighter the light became. The customer base is enormous; already there are some 67 million existing homes around the country, each one becoming more outdated energy-wise with every passing year. Retrofitting these houses should be an easy sell, since homeowners have everything to gain by installing energy-saving products and making alterations that quickly pay for themselves and continue to produce lowered monthly fuel bills. Yet, oddly enough, the market’s a sleeper, largely unexplored. "It’s not on most remodelers’ radar screens as a sales tool or niche," says Asdal, owner of Asdal Builders in Chester, N.J.

Asdal aims to wake up this sleeping giant of a business. The NAHB Research Center hopes to send a construction industry wake-up call, too. On behalf of the U.S. Department of Housing and Urban Development’s Partnership for Advanced Technology in Housing (PATH) initiative, the Research Center is testing and analyzing products and systems that can help achieve the PATH energy retrofit goal of a 30-percent reduction in energy use in at least 15 million existing homes by 2010.

Over the past year, Asdal and the Research Center have focused these hopes and efforts on a house Asdal owns and operates as a rental property in Henderson, Nev. The house is the subject of a ground-breaking test case to show that a typical older house in a searingly hot climate can be transformed from energy hog to energy miser. In the process of turning the Nevada house’s energy consumption around, the project accomplishes another goal, too - defining the process remodelers can use when selling and carrying out energy retrofits of older houses in their markets.

The 1,270-square-foot, three-bedroom, two-bath ranch ran up $1,429 in energy bills last year. Electricity averaged $87 a month, with a spike to $189 in July, and gas $29 a month. Project manager Craig Drumheller, an energy engineer with the Research Center, says the 14-year-old house is just old enough for its HVAC system and other components to begin reaching the end of their useful lives, making replacement a practical financial choice. Compared with the energy efficiency of high-tech new products, the original systems and appliances in the house seem even more ancient.

The case study is a four-step process (For a detailed report go to www.nahbrc.org, and click on "Asdal Builders: Las Vegas, Nevada."):

• Assessing the original energy efficiency of the house;
• Balancing cost and payback of retrofit options;
• Choosing a package of retrofits that’s expected to deliver energy efficiency and a healthy return on investment; and
• Determining how the energy retrofits measure up once installed.

The process began in early August 1999. Drumheller, Asdal and the project team combed the house from floor to roof, evaluating its pre-retrofit energy efficiency. They began with measurements and a general description for use in calibrating energy-use calculations. Among the key facts: The house is one story, facing west, with uninsulated slab-on-grade foundation, standard 8-foot ceilings, double-pane windows with aluminum frames, R-19 attic insulation and about 6 square feet of attic ventilation, 224 wall construction with R-11 insulation, stucco and wood exterior. The HVAC system is a packaged gas-fired unit mounted on the east side of the roof. Though the original, conditioned living area was 1,070 square feet, a 200-square-foot bite had been taken out of the two-car garage and converted to a utility area; an HVAC duct that runs through the attic to this room was uninsulated. Equipment included a forced-air gas furnace with cooling unit (9.5 SEER) and a bevy of appliances ranging from the 1988 refrigerator to a 1999 dishwasher.

Nevada Power Co. performed a complete energy audit on the house. A blower door fan was installed to measure how much air leaked into the house with doors and windows shut. A duct-blaster fan forced air through the duct system with registers and returns covered to check for leaks. Both tests showed that the house and ducts were relatively airtight. "Much better than we expected [for a house of its age and construction]," says Drumheller.

On the other hand, Nevada Power and the Research Center team zeroed in on such glaring energy inefficiencies as the aluminum window frames and the uninsulated duct. Cooled air in the bare ducts became so hot passing through the attic, says Asdal, that the system was actually blowing hot air back into the living space.

Diagnosis in hand, Drumheller began evaluating the financials. Starting with a list of 21 retrofit options - some innovative PATH technologies and some conventional - he used a computer model to weigh their potential impact. The analysis covered numerous angles, from estimated installed cost based on retail price of products and labor, to simple payback based on the energy savings each upgrade triggered. Products that would be installed for more reasons than energy efficiency alone were assigned a proportional cost and value of the energy efficiency gains. Recognizing that all systems interact with each other, Drumheller factored in, for instance, the fact that a high-efficiency refrigerator would release less heat into the house and thus lighten the air conditioning load. With manufacturer information and the software, "I worked back and de-rated the energy savings for each item based on the chosen scope of modifications," he says. Bottom line: The projected energy savings are carefully calibrated and, if anything, on the conservative side.

The team put together a retrofit package expected to save 44 percent in annual energy costs - beating PATH’s 30-percent savings target. And the price tag for the retrofit is a modest $10,838, right in line with the original budget of 10 percent of the property value. "This is a reasonable rule of thumb for most comprehensive energy retrofits," Drumheller says.

Next, Drumheller put together the package. He nixed all retrofits with a simple payback of more than eight years. "Strictly from an economic standpoint, anything with a payback of more than seven or eight years will typically not pay compared with more profitable ways to invest a person’s money," he says. The one exception to this rule was the radiant barrier, which the Research Center wanted to test. A full suite of new vinyl windows with low-E glass would not make the cutoff if the full cost were considered. Instead, Drumheller separated out the cost and payback of the windows’ energy-efficiency improvements.

The final list of 12 retrofits features six innovative PATH systems and six conventional energy-saving products.

By March, most of the retrofits were complete. Attic insulation was installed in June after the energy-saving impact of the radiant barrier had been measured.

Installing some of the products was an eye-opening experience. Stapling the radiant barrier to the trusses in the attic was a challenge, since reaching the stapler into tight corners was tough. "We could have saved roughly $200 if we had laid the barrier across the attic floor," says Drumheller, but that would have defeated the purpose of moderating attic temperatures. Sealing for air infiltration took longer than expected too because the installer was unfamiliar with the process. The extra labor time drove up the cost of this retrofit and somewhat delayed simple payback.

Last August, the Research Center team installed two devices to track the house’s performance before and after the retrofits. Both instruments have been collecting data every 15 minutes since they were installed. Drumheller and Asdal will tally up the numbers this fall.

There are a few early indicators, though. In April, the refrigerator’s performance was "on line with projections," according to Drumheller.

The clothes washer’s energy use was more mysterious. Asdal couldn’t figure out why the high-efficiency washer was producing no energy savings - until he discovered that the tenants were running the clothes through two cycles to rinse all the soap off. Now they know to use less soap and use just one cycle.

To obtain the most from some energy retrofits, both the house and the habits of the residents need updating.

Also See:

The Energy Retrofit Niche

Retrofit Components