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The Future of Energy Star® and LEED® For Multifamily Housing Changes are Coming, Part One
By Ben Millar and Tom Karras

Multifamily housing market professionals have always dealt with financially complex projects. HUD, LIHTC and other financing requirements have influenced the structure of deals, and the design and cost of projects. Recently, “Green” and “Energy-Efficient” building certifications have also added to the complexity. The Environmental Protection Agency’s (EPA) Energy Star Homes certification program represents the leading energy efficient building certification. The U.S. Green Building Council’s (USGBC) LEED for Homes certification program is the leading green building certification in the residential market.

Both programs are going through an evolution. Starting in January 2011, Energy Star will be changing from the current Version 2.0 to an interim Version 2.5, and then on to Version 3.0. LEED for Homes is going through the public comment period for LEED for Homes 2012. The changes in both of these programs will create some challenges for multifamily housing professionals. Thankfully, many of our clients are already participating in “Green” and “Energy-Efficient” building certification programs. Therefore, they will overcome most of these challenges quite easily. However, a few obstacles will require some serious consideration and perhaps additional finances.

We have isolated some of the more difficult obstacles and analyzed the differences between the current versions of Energy Star and LEED for Homes with the future versions of each program. We have also used climate zone 2 requirements for the baseline.

Energy Star Homes
Energy Star Homes is an all-or-nothing program (certified or not certified). There are not extra point credits. The project simply meets the requirements or it doesn’t. While the current requirements aren’t always easy to meet, they are relatively simple to understand. However, Energy Star V2.5 & 3.0 incorporate significant changes. These changes are more easily understood if they are broken down into several topics: energy modeling goals, design changes, and additional checklist requirements.

Energy Modeling
Energy Modeling is used to determine the energy efficiency of a home when the performance path of certification is chosen by a builder. The performance path offers the greatest amount of flexibility when considering energy conservation measures (ECM’s). It allows a builder or developer to gauge the effectiveness (based on cost versus efficiency gained) of an ECM. The current Energy Star program (V 2.0) uses a HERS (Home Energy Rating System) Index as the primary gauge of efficiency. The HERS Index is completed by a RESNET HERS Rater.

The HERS Index is a scoring system created by the Residential Energy Services Network (RESNET) in which a home built to the specifications of the HERS Reference Home scores a HERS Index of 100, while a net-zero energy home scores a HERS Index of 0. The HERS Reference Home is based on the 2006 International Energy Conservation Code (IECC ). The lower a home’s HERS Index, the more energy efficient it is. Each 1-point decrease in the HERS Index corresponds to a 1% reduction in energy consumption compared to the HERS Reference Home. Thus a home with a HERS Index of 85 is 15% more energy efficient than the HERS Reference Home and a home with a HERS Index of 80 is 20% more energy efficient.

Currently, the Energy Star requirement for efficiency is a HERS Index of 85 (Florida and California have more stringent standards). We find most multifamily projects that we model achieve scores in the mid 70’s to very low 80’s. However, the new Energy Star Program (both V2.5 and V3.0) abandoned the HERS Reference House and the fixed benchmark of an 85 HERS Index.

Instead the new Energy Star Program now requires that the structure of the project is modeled with the specifications of the new Energy Star V3.0 Reference Home. The resulting HERS Index is adjusted by a Size Adjustment Factor (SAF) (size penalty) and becomes the target HERS Index. Multifamily buildings rarely have SAFs that change the target HERS Index because of their typical small unit sizes.

Once the target HERS Index is established the project is modeled again, this time using the project’s expected specifications “as designed”. Again a HERS Index is generated. If the “as designed” HERS Index is lower than the target HERS Index, the project will pass the energy modeling requirements. If not, additional ECM’s must be considered. Energy modeling can be an extensive and iterative process. The cost of the modeling can range from $1,200 to $6,000 based upon the complexity of the project. There is about a 66% cost increase for modeling under the V2.5 & V3.0 as compared with the existing V2.0.

After modeling several multifamily projects using the new V3.0 Reference Home Specifications we have found that the target HERS Indexes vary between the high 60’s and low 70’s. This is a significant step up in efficiency and doesn’t leave a lot of room for error. The next questions are invariably, “what changes do I have to make and how much will they cost?” These are easiest to answer by comparing the reference home of V2.0 (the HERS Reference Home) with the reference home of V3.0 (the design criteria for V2.5 are basically the same for V3.0).

Design Changes
Many of the changes to the program will not have a large effect on multifamily building projects. For example, the new radiant barrier requirement only applies when a building has air conditioning duct work in an unconditioned attic. Since most multifamily buildings’ equipment lies in conditioned or semi-conditioned interstitial space, this change will not affect most projects. The most influential changes to the reference home are to the windows, the lighting, and the HVAC system.

The efficiency of the windows effects the overall efficiency of buildings greatly. The Energy Star V3.0 Reference Home windows have a Solar Heat Gain Coefficient (SHGC) of .27 and a U-Value of .60. This is down (meaning more efficient) from a SHGC of .40 and a U-Value of .75 (IECC 2006). We have gathered quotes on Energy Star Windows (meeting the Energy Star Homes V3.0 Reference Home window specifications) and non-Energy Star Windows. The delta in cost ranged from $25 - $45 per window, which means for a typical multifamily unit with 4-6 windows the total delta in cost would be $140 - $270.

The Energy Star V3.0 Reference Home is now based on a home with 80% of its lighting coming from Energy Star lighting or CFLs. This represents a very large increase in efficiency for the home. However, the cost per multifamily building unit is low. For a unit with 16 lights the total cost delta may be $20.00 (if the project relies on screw-in CFLs and not hardwired fixtures).

The Energy Star V3.0 Reference Home is now based on a home with a HVAC system with a SEER of 14.5. This is an increase of 1.5 from the previous standard. The delta in cost per multifamily building unit is around $450-$700.

It is important to remember that the systems and materials detailed in the reference home are not necessarily prerequisites. However, because the Energy Star Program energy efficiency requirements for the units have become so stringent, it will become far more difficult to make up for very inefficient systems by using very efficient systems elsewhere. All the systems must be reasonably efficient.

Additional Checklist Requirements
Energy Star V2.5 and V3.0 both require additional checklists and inspections above and beyond Energy Star V2.0. The V2.5 and V3.0 are basically identical. However, although the completion of the additional checklists for V2.5 is required, most of the checklists are not enforced. They will be enforced once V3.0 comes into effect. The checklists needed for both V2.5 and V3.0 are the Thermal Enclosure Checklist, the HVAC Quality Installation Contractor Checklist, the HVAC System Quality Installation Rater Checklist and the Water Management System Builder Checklist.

Thermal Enclosure Checklist
The Thermal Enclosure Checklist (TEC) is very much like the Energy Star V2.0 Thermal Bypass Checklist. The TEC requires that the design and subsequent inspection encompass a more complete thermal enclosure and focuses more on aligning the air sealing features with the insulation. For multifamily projects constructed with block and/or concrete, the TEC shouldn’t present many issues at all. However, builders who use wood frame construction must pay particular attention to their framing and insulation methods. The new requirements may require a slight change in approach. The newly imposed attention to detail will actually have a positive effect on the final cost of the framing. The TEC inspection will be completed by the HERS Rater. (The Indoor Air Quality Checklist may be completed in lieu of the Water Management System Builder Checklist)

HVAC Quality Installation Contractor Checklist
The HVAC Quality Installation Contractor Checklist is a completely new checklist, which must be filled out by the mechanical design and engineering professional and the HVAC contractor. The design or engineering professional will be responsible for filling out the design calculations and the contractor will input the actually installed equipment.

The largest requirement and impact of this checklist is the ventilation requirement. Projects must now bring in outside air and exhaust air in accordance to ASRAE 62.2-2007. Many builders may already exhaust their oven ranges and bathroom exhausts to the outside. However, only a few have brought in outside air. The additional cost of bringing in outside air can range from $300 to $500 depending on the complexity of the strategy used to fulfill ASHRAE 62.2-2007. (If there are humidity issues costs may climb dramatically.)

HVAC Quality Installation Rater Checklist
The HVAC Quality Installation Rater Checklist is filled out by the HERS Rater and simply ensures what is designed and installed meets the requirements of Energy Star V2.5 and V3.0.

Water Management System Builder Checklist
The Water Management System Builder Checklist is filled out by the builder and ensures that the building handles bulk water issues appropriately by design and installation.

Each of the checklists should be reviewed during the design phase of the project. Developers should engage the services of a HERS Rater early. An experienced HERS Rater can walk project teams through the possible changes due to the checklists. The cost for completing the additional portions of the checklists may range from $75 to $175 per unit depending on the project and market.

Energy Star Summary
There are some big changes to the Energy Star Program coming up. The changes necessitate that multifamily developers spend time up front learning and incorporating the requirements of Energy Star V2.5 and V3.0. The cost of the new Energy Star Program can be estimated to be around $1,200 -$1,500 per unit. However this estimate is based on projects initially designed to the bare minimum of Energy Star V2.0. Projects which “overachieved” on V2.0 may qualify under the new program with little or no added cost.

In Florida, homes must already be almost as efficient as the national Energy Star V2.0 home based on State code. (Which is why in Florida the EPA changed the Energy Star Certification requirement from a HERS of 85 to 77) Said differently, the old Energy Star efficiency threshold wasn’t very high. Therefore, any builders who have been putting any real effort into making efficient buildings may have to spend less capital to reach Energy Star V3.0. The most effective measure you can take to control the costs of certification is to incorporate Energy Star early in the design phase of the project.

About the authors: Ben Millar, LEED AP is the director of Business Development and Tom Karras is Vice President of Operations at E3 Building Sciences in Bonita Springs, Fla. Ben can be reached at Ben.Millar@E3BUILDINGSCIENCES.COM.

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