Using Disclosure for Market Transformation: Berkeley’s new Building Energy Savings Ordinance (BESO) and the U.S. DOE Home Energy Score

In today’s Regional Forum held by the Bay Area Regional Energy Network (BayREN), StopWaste presented on how the City of Berkeley’s Residential Energy Conservation Ordinance (RECO) was updated to the new Building Energy Savings Ordinance, or “BESO,” why it was updated, and how the new BESO, or a version thereof, could be a gentle but powerful move that could be used by many local governments to make residential energy improvements easy, accessible, and desirable – without mandating them.

Past Ordinance

The City of Berkeley’s original Residential Energy Conservation Ordinance (RECO) was passed in 1987. The RECO created a structure in which energy efficiency improvements would often be required in the process of any home sale or substantial renovation. The RECO was an innovative move to push for residential energy efficiency – but was difficult to administer and enforce, and sometimes led to significant expenses for homeowners. The RECO was also prescriptive – meaning that it requires following a specific checklist of measures. Many older ordinances take a prescriptive path, which – depending on the variety of the building stock and interests of the home owners may work – but is less flexible and sometimes does not fit with the needs of the building, or allow for innovative energy-saving ideas that the building owner may have.

The New Building Energy Savings Ordinance (BESO)

The new Ordinance takes a Residential Energy Assessment and Disclosure (“READ”) approach – that is, it removes the mandatory requirement for building upgrades, but seeks to use transparency on building energy performance to drive market transformation by motivating homeowners, buyers, and sellers, to take energy-efficient actions of their choice, that make sense to them. According to StopWaste, the READ model:

  • improves energy literacy
  • empowers consumers
  • drives investments in energy upgrades
  • increases market transparency by creating a clear rating system

To do these, the City of Berkeley is using the new Home Energy Score recently established by the U.S. Department of Energy. Through the Home Energy Score process, an assessor visits a residence and conducts a brief home walkthrough in order to score the home on a scale of 1 to 10 (1 being least energy efficient). This score provides very high-level information on the home’s energy performance to potential buyers, which can provide additional value during a purchase in a similar way that the miles-per-gallon data on a car provides additional value when car shopping. (A recent study conducted by UC Berkeley and UCLA found that energy-efficient or green homes are valued at an average of up to 9% more than comparable non-green homes.)

That’s how it’s done: a quick walkthrough by an assessor, with no specialized equipment. The Home Energy Score does not provide the level of information that a HERS rating would – but is inexpensive, fast, and provides a reference of home energy performance – and in the case of how the process has been rolled out in the City of Berkeley, it also provides some follow up guidance to homeowners on how they may implement potential improvements. Through the BESO, the City of Berkeley is requiring energy assessment and disclosure for every building at point of sale. More information on the Home Energy Score is available in a Home Energy Score fact sheet on the City of Berkeley’s website.

Post-Energy Score Technical Assistance

Once a homeowner has a score, it’s critical to connect them to resources to take action and improve that score (if desired). The U.S. DOE has a tool to do this, but, with support from BayREN, StopWaste has modified this to dovetail with offerings through Energy Upgrade California to connect Bay Area users directly to California-relevant resources. As assessors move through the home, they mark energy opportunities for score improvement, and homes with scores of 6 or lower then receive follow up through a BayREN-supported third party that can provide technical assistance and recommend steps for implementation.

The Home Energy Score process has served homes on a voluntary basis outside of Berkeley – including in Oakland, Napa, Vallejo and Solano. As the program grows, so does the need for new qualified assessors. Current qualified assessors to date are home inspectors (the assessment can be done very efficiently during a home inspection) or energy efficiency contractors. If you know of parties interested in becoming assessors, they can access resources on the Department of Energy website, or StopWaste’s website.

If you are interested in learning more about the program, visit StopWaste’s website, or the HomeScoreCA website.

Other Resources

The use of energy disclosure to drive rational market decisions to save energy is a proven technique – and is also being used by the state in implementation of new programs as directed by AB 802. For advice to policy makers on developing strong, stakeholder-supported residential energy disclosure programs for energy efficiency, take a look at toolkit materials and information available from ACEEE.

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