December 29, 2008

Oil prices may fluctuate but builders still recognize the benifit of green

by Environmental Building Strategies in Energy 1 Comment

Homebuilders were slapping on solar panels and added other eco-friendly enhancements as energy prices soared earlier this year, hoping greener homes would lure reluctant buyers.

But since July, the cost of oil has plunged from $147 a barrel to about $36, while home prices continued to fall.

Home builders were adding $20,000-worth of solar panels, high performance insulation, low-leakage air ducts and other systems in order to lure buyers because there electric bills will be cut in half.

An example of this technique working was a green community in California, Encore development, where sales figures in July showed that homes with green features sold 1.55 homes per week, compared with 0.88 homes per week for similar homes in the same city that weren’t green.

But that advantage disappeared in the second half of the year. So why are home builders sticking with green. Many know that they can’t get financing without pre-selling a majority of their product. They recognize that by standing out and delivering a better product buyers are more willing to purchase and financiers are more willing to loan them money.

Many builders are shying away from initial expensive green investments such as solar panels and looking at increasing the efficiency of homes. This is done by sealing the envelope of the home and having more efficient systems, lowering the water usage and improving the indoor air quality. These changes add little to no extra charge to the construction cost but provide substantial savings in energy use.

Oil prices may fluctuate, but the benefit of going green is far beyond your immediate energy bill.