In 2011, Emerson Climate Technologies surveyed more than 1,000 homeowners and found that 57 percent of respondents indicated they would invest $5,000 in a home energy upgrade if it paid for itself in two years. Perhaps as a result of this increased interest in energy awareness, a few utilities are offering substantial incentives for deep energy retrofits (DERs), which can be complex, expensive projects that are designed to shave rate payers’ energy bills by 50 percent or more.

Even with generous subsidies, DERs can run into the six-figure range, and some note that a relatively small number of homeowners may want to commit to large home renovation projects that are focused solely on saving energy. That is why savvy contractors working in this niche market focus not only on deep energy reductions, but on non-energy benefits, such as improved comfort, better IAQ, increased home values, and a more durable home. Emerson research backs up this approach, noting that approximately 70 percent of homeowners surveyed said they would be interested in purchases that would improve comfort, have less impact on the environment, and reduce energy costs.

Deep Savings

So, what constitutes a DER? According to 360Chestnut, an online resource that helps consumers determine which projects make the most sense from an energy-efficiency and rebate/incentive perspective, a deep energy retrofit is when a home undergoes extensive changes to cut its energy use by up to 90 percent. As the organization noted, the goals of residential energy efficiency are to use less energy and to utilize that energy as efficiently as possible. For the average home, which uses about half of its energy for heating and cooling, this means attacking the envelope of the building to make it as tight as possible and then reengineering the HVAC system to be as efficient as possible.

Brian Butler, owner, Boston Green Building, Allston, Massachusetts, started offering deep energy retrofits about five years ago, when the real estate market tanked. With not much work to be had, he became interested in a pilot program that was being introduced by the local electric and gas utility, National Grid, which offered $30,000-$60,000 in incentives for DER work. “The timing was great for us because work was becoming scarce, and this fit extremely well with our business model as a green company.”

Since the program started in 2009, Butler has performed an average of three DERs a year, and while he said there is no typical DER customer, many of his clients come from the nearby Massachusetts Institute of Technology (MIT) or are technology geeks who are fascinated by the numbers and science behind the retrofits. But, he also said that some clients are interested in DERs simply because they want to do the right thing or be more comfortable in their homes.

“Different people come at it for different reasons, but it’s always in the back of my mind when I’m interviewing a new client,” said Butler. “If they’re already starting to check a bunch of boxes in my brain, I may bring it up, but it can be a tough value proposition, especially if the home is built after the 1960s. Once you start getting into anything more recent than that, it’s hard to make a good case for a DER.”

Dr. Iain S. Walker, residential building systems group leader, Lawrence Berkeley National Laboratory, Berkeley, California, has researched DERs in the U.S. and around the world. In documenting their performance, he found they are generally successful, with homes typically halving their energy bills.

But there are also challenges.

“We have found that financing opportunities are poor, and it would certainly help if energy costs were included in mortgage assessments,” said Walker. “DERs also take a lot of time, effort, and money, and there is an amount of risk involved in that not all homes are going to break even financially after the retrofit. Homeowners have to decide if the non-energy benefits (which are key marketing tools) of a healthier, more comfortable, more durable home are worth the expense.”

Another non-energy benefit is that energy-efficient homes are at least 9 percent more valuable, according to research, said Butler. “Buyers are getting wiser to the real costs of owning property and what it means in terms of thermal comfort, IAQ, and resale value. In addition, the International Building Code has adopted ever-stricter Home Energy Raters (HERS) requirements for new homes in its last two iterations, and when it calls for new homes to start hitting HERS ratings near zero, existing homes are bound to fall way behind. A partial or comprehensive DER is a way to stay ahead of a quickly changing market.”

For the time being, at least, homeowners investing in DERs are generally not doing it for financial reasons, they are motivated by “doing the right thing” and living a lower-impact lifestyle, according to Walker’s research. “It is likely there are insufficient people with such an outlook for DERs to become mainstream; however, continued efforts to reduce costs and increase financing opportunities are still worthwhile.”

And there is no question that DERs can be pricey, with Butler noting that most of the retrofits he is involved in range from $200,000-$400,000. However, he takes exception with those who say DERs are expensive, because deferred maintenance is often a significant part of the project. “You can’t say that this is a $200,000-$400,000 DER because, in many cases, it’s an old house that needs siding and roofing, the mechanical systems are on their way out, there is lead paint, old plumbing, knob and tube wiring, and possibly asbestos. Deferred maintenance issues should not be blamed on the cost of a DER. I stick by my guns that a DER costs between $25,000 and $50,000, and if homeowners are getting significant incentives from the utility that may cover half of that, it’s actually a pretty good deal.”

The Process

DERs are very comprehensive and leave virtually no part of the home untouched. The process Butler utilizes is called the wrap-and-strap method, which involves stripping off all the house’s siding and trim; cutting off the eaves, edges, and rakes; and essentially reducing the home to a box. Once in this simple geometrical shape, it is easier to wrap the home with two layers of 2-inch rigid foam board, which gives an effective R-value of 6.5 per inch. “By adding this continuous layer of insulation on the outside, we’re doubling the R-value of the wall before we triple the value when we fill the cavities in a typical 2-by-4-inch stud wall,” said Butler.

The goal of this process is to get a connection from the walls through to the foundation so there is no interruption in insulation. “We put insulation on the inside of the foundation, continuous to the floor, and if there is an unconditioned attic space, we insulate the attic floor,” said Butler. “More frequently, we’ll insulate the roof and bring the attic space into the conditioned envelope because it is just going to be a better and easier way to get that unbroken line that you can draw all the way around the house.”

After the wrap comes the strap, which involves screwing in wood furring strips every 16 inches to penetrate the foam boards and grab the underlying wood frame. That nail base allows the siding to be attached, along with waterproofing membranes, then finally the flashings and roofing. At that point, said Butler, it’s difficult to discern that a retrofit has even occurred.

Then, attention turns to HVAC, specifically ventilation, which Butler says is the most important part of the retrofit. “The whole idea behind a retrofit is to eliminate drafts and get uncontrolled leakage under control. By sealing up the house very tightly, we absolutely must provide mechanical ventilation, which we often do through the use of a heat recovery ventilator (HRV).”

Heating and cooling systems often need to be replaced during the course of a DER because the equipment is usually less efficient and oversized. That latter point poses a particular challenge, as it can be difficult to find HVAC equipment small enough for a home that has undergone a DER. “We’ll run energy models on the wall thicknesses, window performance numbers, and our anticipated blower door tests, and we’ll have numbers so low they won’t even register on the charts for calculating equipment,” said Butler. “They don’t make equipment small enough for these homes. Sometimes we just need 1 ton of capacity in places 3 ton would normally be installed.”

Homeowners undergoing a DER often choose variable-speed, high-efficiency air conditioning or heat pump systems, which significantly reduce energy costs over the long run, said Frank Landwehr, vice president, air conditioning marketing, Emerson Climate Technologies. “A system that can vary its capacity to meet the required load will allow the homeowner to continue making upgrades into the future, as the system will adjust as the load decreases. This flexibility will ensure that comfort factors, such as dehumidification and air quality, will be maintained throughout the DER, as well as avoiding equipment problems due to improper load matching as things change.”

Ductwork usually has to be replaced, too, as it is often poorly installed or in the wrong place, said Butler. “In most houses, all the heating and cooling is supplied through a very thinly insulated duct in a completely uninsulated cavity. It might as well be outside. The poor mechanical system has to chug away, trying to heat or cool the interior of the house through these ducts that leak and are only covered with R-8 insulation.”

This is why Butler often ends up minimizing or completely eliminating ductwork and using ductless heat pumps instead. “The best mini-split systems will work admirably in these DERs because the houses can coast for several days with no heat. But, it’s not a comforting feeling to know the only heat source is a heat pump, so I usually specify at least a handful of electric baseboards as backups, just to be on the safe side.”

Once the DER is finished, it is a good idea to commission the systems to make sure their performance is meeting expectations, said Linda Wigington of the 1,000 Home Challenge, an initiative dedicated to demonstrating the potential to reduce energy consumption of existing North American homes by 70 percent or more. “It is important to see if you’re meeting equipment specifications as well as meeting performance specifications in terms of house tightness. Part of that can include having feedback systems built in, but it may also be worth installing a reconditioned electric meter that can be used to submeter loads. It costs about $35, and it gives homeowners a very simple way of knowing how their different systems are performing.”

With energy costs continuing to increase, homeowners are becoming more interested in making serious improvements to their houses in order to reduce gas and electric bills — especially when local utilities offer attractive incentives to significantly cut energy usage. Contractors who understand how the DER process works are uniquely positioned to help these homeowners achieve significant energy savings, as well as a far more comfortable, durable, and valuable home.

SIDEBAR: Deep Energy Laboratory Research

Researchers at Lawrence Berkeley National Laboratory (LBNL) are currently studying deep energy retrofits (DERs) in order to both document their performance and identify barriers that can be changed to increase the number of DERs. As a result, group leader Dr. Iain S. Walker identified the following important issues:

• Most homes were significantly tightened (by a factor of four on average), but some homes neglected this important and relatively low-cost aspect of home improvement;

• For the best DERs, keep it simple and avoid complex systems. Start with good air-tightening principles, add insulation and good windows, and buy the best HVAC equipment, appliances, and lighting systems that are readily available;

• There can be a significant difference between site and primary energy (or CO2 equivalent) assessments, particularly in homes that swap gas heating and hot water for electric;

• The non-energy benefits of increased comfort, safety, and durability are very important;

• A good plan and attention to detail are just as important as selecting the right kind of insulation or appliances. The best example is air sealing — someone needs to take responsibility for making sure the home is tight, otherwise you can use lots of caulk but get poor results;

• DERs need to be commissioned to deliver the expected performance. This includes a culture of QA/QC [quality assurance/quality control] as well as actual performance verification, such as airflow diagnostics for HVAC systems, envelope leakage, and duct
leakage testing; and

• How occupants use a home can significantly change the energy use. In a DER, with its high-performance envelope, the plug loads that are controlled by occupants matter much more. These plug loads can be controlled by selecting high-performance appliances and other electronic devices, and smart power strips and occupancy sensors can help, too, together with a little education for the occupants.

One of the challenges with DERs, said Walker, is that almost all are one-offs that require considerable upfront effort by the contractor and homeowner. He suggests that another way to approach DERs is for contractors to prepare packages of upgrades that can be applied to many homes. “In much of the U.S., our housing stock is in urban and suburban areas with many almost identical homes side by side. If we can find the right package for one home, we can apply it to thousands. This takes much of the guesswork and risk out of the decision-making process and should lead to lower costs.”

DER contractors may want to offer to do the work in stages over several years, as this decreases the immediate financial burden and household disruption. But, Walker cautions this approach requires stages that must be carefully planned to avoid missing out on potential savings due to the order in which work is done. “The classic case of this is to insulate an attic before air sealing, making future air sealing very difficult, time consuming, and, therefore, expensive.”

Publication date: 6/23/2014 

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