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Why Energy Score Matters When Buying a Home

When shopping for a new home, what’s the main number people tend to focus on? Listing price. Determining whether a listing price is fair and deserving of an offer is influenced by many familiar factors, such as location, number of bedrooms and bathrooms, square footage, yard space, age of appliances, and so on. But that doesn’t tell you the whole story.

Utility bills represent a significant portion of what it costs to maintain a home each year. The average household pays $2,500 in energy costs every year, or over $200 per month. A Home Energy Score, which sums up a home’s energy efficiency, is another important number buyers should consider when weighing their options for a new home.

Home Energy Score Explained

The Home Energy Score, developed by the U.S. Department of Energy (DOE), is a rating scale that helps home shoppers understand a home’s energy performance, similar to a miles-per-gallon rating for a car. Homes are scored on a 1-10 scale, with 10 being the most energy-efficient.

What Factors Influence a Score?

A score is determined based on a home’s envelope — that is, foundation, roof, walls, insulation, and windows — along with square footage, heating, cooling, and hot water systems. Keep in mind, resident behavior and non-permanent fixtures, such as lighting and appliances, are not factored in. The inspection can be completed when you have your standard home inspection, although the energy audit must be performed by a Home Energy Score Certified Assessor, which you can locate on the DOE’s website.

Once complete, the report will tell you how energy-efficient the home currently is; it should also include a “Score With Improvements,” which estimates a future score and cost savings if energy improvements are made.

Why Get a Home Energy Score?

Your home is one of your biggest investments; purchasing one that is energy-efficient will help you save money on monthly utility costs and improve your comfort levels. Plus, when your home uses less energy, it also benefits the environment. Whether you prefer to buy a home that already has a high score, or you’re willing to make the improvements needed to achieve a higher score, a Home Energy Score can help you make a more informed decision.

If you’re not planning a move anytime soon, knowing the energy score for your current home can also benefit you for the same reasons: smaller utility bills, increased comfort, and less environmental impact. Especially if you live in an older home, finding out your score and making the necessary improvements may be well worth the effort.

Selling your home? A Home Energy Score can help you, too. One study found that listings that included energy costs sold for a higher percentage of the asking price and spent less time on the market. Ask your agent to include your home’s energy score in its MLS listing, which may make it more attractive to potential buyers. For added transparency, consider supplying your agent with sample utility bills to share with interested buyers.

Energy Efficient Mortgages

Another benefit of knowing a home’s energy score is potential eligibility for an Energy Efficient Mortgage (EEM). These financing options allow qualified borrowers to obtain a larger mortgage by accounting for the home’s lower utility costs. An EEM can be used to purchase a home that’s already energy-efficient or to finance energy-efficient improvements. It can also be used to build a new home.


U.S. Census Bureau | Better Buildings | U.S. Department of Energy | Elevate Energy, Moving the Market: Energy Cost Disclosure in Residential Real Estate Listings


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