Major U.S. homebuilders selling energy efficiency as pocketbook issue

Reuters reporter Helen Chernikoff has authored a nice analysis of the growing role of energy efficiency in the business strategies of major U.S. homebuilders. Her reporting shows that the big boys in the industry–players renown for shaving costs and maximizing shareholder value at every opportunity–have taken to selling energy efficiency as an important tool for reducing long-term cost of home ownership.

That Toll Brothers Inc., Lennar Corp. and two other major builders issued press releases in the last 60 days touting the money- and energy-saving  technologies they are building into their new homes should send a message to that segment of the Washington state homebuilding industry that has thrown a fit over an improved state energy code–and to the public officials who have bent to their complaints.

One builder, Meritage Homes Corp., is building entire communities of energy efficient houses. Each home in its 210-unit Lyons Gate development outside of Phoenix comes with $50,000 in upgrades to lighting, climate control, water and insulation systems. Yes, the upgrades add to the cost of building–though Meritage says they will not add to the homeowners up-front cost. The company sees energy efficiency as a key market driver for housing in the long run and is willing to accept somewhat smaller profit margins in exchange for greater share of a market increasingly worried about ongoing energy costs.

Chernikoff’s piece acknowledges the risk that even the perception of a higher initial price tag can scare off some buyers in this difficult real estate environment, and notes a key solution to the problem: training sales people to present the value of energy efficiency along with other amenities.

“There are choices beyond just what kind of counter tops you want,” an industry leader told her. “There are choices in energy efficiency that substantially change cost of ownership.”

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