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How to quantify the value of energy saving improvements

Posted by greentomatoenergy . on 5 October 2012 at 8:53 am

A question we get asked a lot is whether energy saving improvements add value to your property. For many of our clients, a positive answer makes the capital expenditure easier to bear as you know that you get the value back on a sale.

Traditionally, energy and energy efficiency measures have been largely invisible and their success hard to measure. This led to difficulties in recognising value. However, as more of us are becoming more aware of our energy consumption, more of us are documenting the improvements we make and we’re required to produce an EPC when selling a property, this must be changing.

A recent study (clicking the link downloads a pdf document) carried out in the US by the Appraisal Institute and the Institute for Market Transformation concluded that while it was obvious that energy efficiency features can increase a property’s value, it was not obvious how “real estate appraisers” (or surveyors if you’re not American) assess the effects of energy efficiency on a property’s value. It suggests that surveyors should benchmark energy consumption, analyse the equipment installed and look at documentation provided when arriving at the property value.

While it is pretty obvious to those of us in the industry that our suggested measures add value (ie. if a house costs less to run or if it has a guaranteed, index-linked return attached to the property, it must be worth more than without), we need to ensure that the occupier can prove this to the surveyor or estate agent. This means taking before and after meter readings (if possible), providing a pack of drawings and detailed maintenance requirements.

I know that MCS requires this for approved installations, but the documentation we provide needs to be specific enough to convince any surveyor of the added value to the property they are surveying.

For those of you installing energy efficient measures at home, ensure that you receive and put in a safe place, all warranty documentation, instruction booklets, as-installed drawings and projected energy savings/generating data. Then ensure that you keep an eye on your actual consumption/generation data. If it’s not working as projected, speak to your installer. Otherwise save all of the data so that you’re ready to show off when you want to sell your property.  

By Akta Raja 

Photo by Zaveqna

About the author: greentomatoenergy specialises in cost-effective renewable technologies and low carbon building.

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