Newsletter Sign Up!

For Builders and Homebuyers: Why ENERGY STAR Makes Sense

By: Philip Drader and Daljit Basan

ENERGY STAR® qualified homes offer more than just the obvious environmental benefits. There are also clear economic and social reasons for energy efficient building design. It’s simple: ENERGY STAR qualified homes are approximately 20% more energy efficient than homes built to minimum building code requirements.


Evolution of ENERGY STAR

Since 2001, Natural Resources Canada’s (NRCan) Office of Energy Efficiency has promoted the international ENERGY STAR symbol in Canada and monitored its use. Products with the ENERGY STAR symbol help save energy, save money and protect the environment.

In 2005, NRCan expanded the ENERGY STAR initiative in Canada to include energy-efficient new homes.   To qualify, homes are designed by builders and verified by Certified Energy Advisers to incorporate energy efficiency features that result in significant energy savings and improved home-owner’s comfort. The increased efficiency of these homes translates into reduced energy costs for homeowners, this is especially important as the cost of energy continues to rise.

When also considering the parallel ENERGY STAR Homes program in the U.S. (administered by the EPA), there have been on the order of 1.6 million homes labeled to date.


The Business Case is Clear

ENERGY STAR qualified homes offers a win-win situation for both builders and homebuyers. They help save energy, save money and protect the environment. Here are some key findings to help reinforce the business case for ENERGY STAR (ES) qualified homes:


Benefits to the Builders

  • Higher Return on Investment: With a 40% markup, a $3000 upgrade is sold for $4200, making the builder an additional $1200 per home. In the resale market, some studies have shown an increased price per unit between 4% – 9.6%.
  • Sell homes faster: The internationally recognized brand helps market your homes and attract future homebuyers. Various studies from the US (California, Washington, Oregon) have shown certified homes in the resale market spend 18 days less than the average home. The 2011 study completed by the Appalachian State University in North Carolina, titled Market Impacts of ENERGY STAR Qualification for New Homes provides statistically significant analysis that ENERGY STAR qualified homes sell faster and for higher prices than comparable nonqualified homes, providing valuable evidence that there is a market advantage for ES homes.
  • Acquire a reputation as a quality builder: 89% of Canadians recognize the ENERGY STAR symbol and 71% of Canadians prefer to buy ENERGY STAR qualified products whenever they can (link for reference).
  • Marketing Opportunities: The ENERGY STAR brand is promoted by many other organizations as a symbol that represents quality, reliability, value and energy efficiency.
  • Be a part of the sustainable movement: If you don`t lead, you will be behind. From a 2011 MIT Sloan study, it was noted that sustainability is now a permanent part of 70% of corporate agendas. According to a study by the McGraw Hill Construction, the green share of the single-family residential market has grown from 2% in 2005 to 23% in 2013 and should reach between 26% and 33% of the market by 2016, being worth as much as $105 billion.
  • Work with more professional tradespeople: Builders have found that tradespeople act more professional on the job-site because they know the home will be an ENERGY STAR home.


Benefits to the Home Buyers

  • Save money on utilities: ENERGY STAR qualified homes use considerably less energy for heating, cooling, hot water, lighting and appliances, expecting to save approximately 20% on your energy costs each month.
  • Improved comfort: In the winter they stay warmer, in the summer they are cooler and all year long they are quieter and draft free. As a part of the ENERGY STAR qualification process, a mandatory blower door test ensures a home is nice and airtight. Due to better ventilation the environment is also more fresh and healthier.
  • Increased property value: Green buildings show higher property values and average sale price increases of more than $20 per square foot. People also value energy efficiency and want to talk about it. A 2009 study completed in the Greater Toronto Area, found that “an astonishing 92% of homebuyers are likely to choose an energy efficient home again in the future.”
  • Available grants and incentives: Various government bodies, energy utilities and NGOs are offering prospective homeowners with incentives as a part of their energy-efficiency programs.



It is clear that ENERGY STAR makes sense: the environmental benefits are aligned with the economic and social factors included in any builder or homeowner’s decision-making process. They are proven to be a success in the markets and will continue its growth within the housing market.  Below is a fantastic infographic summarizing these benefits (note that it is U.S.-based, but mostly relevant for Canada).  To learn more including technical, marketing and training resources, visit our ENERGY STAR for New Homes webpage.
New Homes Infographic
New Homes Infographic


Contact Us Now!




Philip is Mr. Practical. Having been involved with ENERGY STAR and LEED since 2007, Philip spends much of his time on site, and has been working with builders and trades to teach and empower them to build quality, high performance homes that meet the requirements of these programs and others.  As a trainer of Certified Energy Advisors, he not only supports builders, but also teaches those who do, helping to increase industry capacity to build homes to these high standards.

Philip walks his talk, drives a hybrid, and applies home performance principles in his own life: he’s done extensive renovations on his own rental property, gutting and rehabilitating his 100 year-old home to make it comfortable and energy efficient.




A graduate of the Honours Environment and Business program, Daljit has comprehensive and up-to-date training within the environmental field. Daljit understands how to integrate the tools of business and sustainability, providing a unique niche within the environmental industry.

As a Sustainable Design Specialist, Daljit works closely with energy efficient building programs including ENERGY STAR, LEED®, and Built Green.

Leave a Reply

Your email address will not be published. Required fields are marked *