Whether you intend to sell a property or rent it, whether you invest in commercial or residential real estate, understanding the potential value added by energy efficient upgrades can help you to get the most out of any remodel or renovation. By reducing the amount of energy your building uses, you can both reduce the cost of utilities every month for the life of the property, and increase the value to any potential buyer.
The ‘thermal envelope’ is an important aspect of any building’s energy management. This refers to the barriers owners and builders put up to prevent hot or cold air from escaping and pushing up the cost of climate control such as insulation and weather stripping. In order to improve the thermal envelope, ensure that the building is well insulated, especially the roof and/or attic space.
Replace any single pane windows with double and any external wooden doors with steel. Most modern windows will come with a low-emissivity coating to let in the light but not the heat of the sun. They’ll also have non-conductive gasses injected between the panes to keep thermal transfer through the glass down to a minimum. Newer steel doors will be equipped with a magnetic strip, which will create an effective seal with the jamb, requiring little to no other weather stripping. Just the window replacement could add up to $9300 in resale value and save up to $456 each year on utility bills.
Manicured lawns are one of the most inefficient features of any home or commercial building, but they are almost non-negotiable from a seller’s perspective. Still, there are some landscaping changes that can help you on your way to a greener building. Strategically planted trees that shade your windows will help to reduce summer cooling costs significantly. You can also impact heating costs in the winter by planting to create a windbreak.
The upfront cost of energy efficient appliances may be more than you want to pay, but the savings in utility bills will allow you to recoup those expenses fairly quickly and continue to save for the life of the building. Improvements in kitchen appliances are saving consumers millions of dollars already, and innovations like tankless water heaters and mini-split ductless air conditioners are taking efficiency even further.
Making more extensive retrofits to incorporate a solar power system into your building can actually leave you making money for part of the year, depending on where you live. Installing solar panels and a grid-interactive inverter will allow your building to generate its own power, and any excess will be sold back to the utility company. During the winter and other times when the sun isn’t shining, you will still be connected to the standard grid for your power supply.
These systems will require a steep initial investment, but with the constantly rising costs of power, the savings will increase exponentially. How much money you save will depend on how much sun exposure you get, how much power you use, and the cost of power in your area, but in general it can amount to over $1000 per year. At this time there is also a 30% federal tax credit for qualifying residential or commercial solar power systems.
Frank Newhouse is a freelance writer with experience in property management and personal finance. He currently writes for AC Florida, which connects customers in the Miami area with the air conditioning services and supplies they need.