Deep retrofit

The Sacramento region’s housing market was as hot as the region’s summer temperatures a few years ago before the economic downturn. Thousands of homes were built, sold and resold. Nowadays, like other previously hot real-estate markets, Sacramento is experiencing a housing market downturn. There is little new construction activity, and the local resale market crawls at a snail’s pace.

But there are hundreds of thousands of older homes in Sacramento that present very potent energy-efficiency remodeling opportunities. Many of them were constructed before California’s stringent Title 24 building codes were introduced in 1978, and many others were built in the years hence but would not meet the code’s increasingly tight standards. In that inventory of older homes lies the beginnings of new economic growth for Sacramento, in terms of contractors and builders shifting to retrofitting many of these homes with significant energy-efficiency improvements.

We at the Sacramento Municipal Utility District hope to save owners of existing homes money and also spur a new spike in home remodels that really make a difference. So we kicked off the SMUD Energy Efficient Remodel Demonstration program in 2009. The program is a comprehensive, whole-house approach to retrofitting a home with energy-saving and energy-generating equipment and measures.

So far, partnering with developers, builders, and low-income housing agencies and advocates, SMUD has coordinated several home remodels. The retrofits are achieving very impressive energy reductions in the 53 percent to 62 percent range. Yes, you read that right: 53 to 62 percent reductions in homes that were built decades ago. Some of the homes were in foreclosure, others were dilapidated blights harming already plunging property values in neighborhoods and some were even slated for demolition.

The first project we tackled was in Fair Oaks, an older suburb of Sacramento (see before and after photos). Partnering with green builders Jim Bayless and Scott Blunk of GreenBuilt Construction and the National Renewable Energy Laboratory, SMUD delved into a short-sale home that was built in the 1980s before the building code was tightened. The 1,750-square-foot house was in many ways gutted down to studs. Energy-efficient insulation, windows and equipment, as well as renewable-energy technologies like rooftop solar panels were then installed. The home is achieving about 60 percent energy savings as a result, reducing electric bills by up to $1,700 a year.

This first experience last fall helped the project team learn a lot and is helping us structure a program where customers can choose different levels or packages of retrofitting at varying prices. Eventually, SMUD hopes to offer a combination of rebates and financing in those packages. Rebates for gas appliances are available from the local gas utility, as well as federal tax credits to incentivize customers to consider a SMUD Energy Efficient Remodel. The upgrades increase comfort, reduce maintenance, enhance value and reduce carbon.

The home now boasts a 2,295-watt rooftop photovoltaic solar electric system, a solar hot water, a super energy-efficient water heater, a heat pump retrofit (the home is all electric), LED lighting, a cutting-edge whole-house fan, improved insulation, high-performance windows, tight ducts, shade trees, a centralized computerized climate control and power generation monitoring system, as well as other features. The upgrades are priced at approximately $32,000 (excluding the solar PV and hot water system).

While that price may seem prohibitive, kitchen remodels alone easily exceed that figure with little or no return on investment. Energy-saving retrofits, meanwhile, when financed strategically, can deliver a return on money spent with the first reduced electric bill. In many cases, when the upgrades are financed, the monthly energy bill savings are larger than the monthly cost of the upgrades. The monthly savings go directly to the homeowner.

With the solar power option, we hope to achieve a zero net summer peak electric demand between 4 and 8 p.m., which means the home can produce as much energy as it uses during those hottest late afternoon hours.

In the past year, we have embarked on and finished four more demonstration homes and are planning more. Backed by technical advice and financial incentives from SMUD, these home remodels are intended to demonstrate to the building and remodeling community, homeowners and the home-buying public that existing homes can be significantly improved with relatively affordable energy-efficiency options and techniques. The demonstration program showcases the opportunity to incorporate upgrades as part of major remodels when buying any existing home, particularly foreclosed homes.

Obviously, with the tens of thousands of older, less energy-efficient homes in the region, SMUD sees benefits not only for customers who do the retrofits, but also for the electric utility and the community we serve in the form of reduced power consumption, especially at peak demand times like hot summer afternoons. SMUD also sees these R&D projects as a boost to help local contractors get new business and helping the region economically.

One of the more novel concepts is found in an older neighborhood in south Sacramento. Demolition had already begun in an abandoned home built in the 1950s. Insulation and framing could be seen from the street. By almost starting over and installing a long list of energy-efficiency measures, we were able to get 60 percent source energy savings from the home, which will now be resold to a qualifying low-income family. While many of the measures are relatively conventional—R-40 attic and R-19 wall insulation; high-E windows, air sealing, ducts in conditioned space and high-efficiency water heater, appliances and CFL fixtures—one aspect of the retrofit proved most important. We wrapped the entire outside of the home in Styrofoam blocks, even the roof. These several-inch-thick blocks resemble your children’s Lego play blocks. They interlock and provide practically zero air-permeable insulation. We even added the foam to the roof, covered it with plywood and reshingled. We then blew stucco onto the exterior walls for aesthetics, and the once-abandoned house is now an attractive home.

For builders like Jim Bayless, who did the work on the Fair Oaks house, the opportunities in new construction may have withered, but the potential for remodeling with an energy-efficiency focus abound. Bayless is an expert and a pioneer in building with an emphasis on sustainability. He built the Fallen Leaf subdivision in Sacramento, which was one of the first housing developments in the region to feature solar homes.

SMUD hopes the Energy Efficient Remodel Demonstration will launch a renaissance in making older homes perform much better than they were designed and built to. If past success in the energy-efficiency space is any indicator, we expect this to be a game changer.