Home Energy Audit: What is it and How Much Does it Cost?

510 Shares

Are you wondering what a home energy audit is and how much it costs? Will it be worth it to have one?

Most homeowners today appreciate the need to make a home more energy-efficient. Heating and cooling bills can be quite a hit to the budget, depending on your home’s size and energy efficiency.

It only makes sense to want to improve energy efficiency if possible.

One of the questions I often get as a Realtor is whether a home energy audit is worth it.

A home’s energy efficiency is measured by what is known as the HERS Index or home energy rating system.

A certified Home Energy Rater will determine a home’s energy efficiency, assigning it a relative performance score. The lower the HERS rating number, the more energy-efficient the home.

The U.S. Department of Energy has determined that a typical resale home scores 130 on the HERS Index, while a standard new house has a rating of 100.

A property with a HERS Index Score of 70 is 30% more energy efficient than a new home.
A property with a HERS Index Score of 130 is 30% less energy efficient than a new home.

You can see a complete energy rating scorecard to see how the HERS index will grade your home. This will give you a good indication of how your home stacks up against others of similar size and characteristics.

From many years of experience as a real estate agent and homeowner in multiple states, I would highly recommend an energy audit at your house. You will end up saving a significant amount of money in most circumstances.

Let’s review everything you should know about housing energy audits.

Facts and Stats Worth Knowing

1. A home energy assessment is a process that assesses the energy efficiency of a residential property.
2. During an energy audit, professionals evaluate the insulation, HVAC systems, and appliances to identify energy loss or inefficiency areas.
3. A property energy audit aims to find ways to reduce energy consumption and lower utility bills.
4. Common audit techniques include thermal imaging, blower door tests, and evaluation of energy usage patterns.
5. The benefits of energy audits include improved comfort, reduced environmental impact, and potential eligibility for energy efficiency incentives or rebates.
6. Conducting an assessment can result in up to 30% energy savings.
7. Approximately 7 out of 10 homes have air leaks contributing to energy loss.
8. Installing proper insulation after an evaluation can reduce heating and cooling costs by an average of 15%.
9. Homeowners who have had a review performed are 50% more likely to invest in energy-efficient appliances.
10. A housing energy review can identify potential savings of $400 – $900 per year on utility bills.

What is a Home Energy Audit?

A home energy assessment evaluates a home’s energy use. Professionals or homeowners conduct it to identify ways to improve energy efficiency. A home energy review is one of the most surefire ways to understand what parts of your home are inefficient. The process involves several steps.

First, an auditor examines past energy bills. This analysis helps understand the home’s energy consumption patterns over time. Next, the auditor conducts a walkthrough of the house. They inspect windows, doors, insulation, and HVAC systems for energy leaks or inefficiencies.

The auditor uses tools like blower doors and infrared cameras. These tools detect air leaks and areas lacking insulation. They also check heating and cooling equipment for efficiency.

Lighting, appliances, and electronics are evaluated for energy use. The auditor recommends energy-efficient replacements if necessary.

Finally, the auditor provides a report. This report outlines findings and suggests improvements to increase energy efficiency. It includes estimated savings and prioritizes recommendations based on cost-effectiveness.

Homeowners can implement these suggestions to reduce energy consumption and lower utility bills. An energy audit is the first step towards a more energy-efficient home.

How Much Does an Energy Audit Cost?

A home energy audit costs vary based on the audit’s complexity, the home’s size, and the auditor’s expertise. On average, prices range from $200 to $700. DIY audits are free but less thorough.

Some utilities offer audits at reduced rates or for free. Expect higher costs for more in-depth audits, which may include blower door tests and thermographic scans. Incentives or rebates can offset part of the cost. Always ask for a detailed quote upfront.

At the end of the audit, you will have a list of where your problems are.

Luckily for me and others who live in Massachusetts, a home energy audit is free! Mass Save will come to your home and provide a complete home energy assessment.

You can visit their website to schedule an appointment and get helpful energy-saving information.

I had an energy audit on a large home I owned in Hopkinton, Massachusetts. It was over 4400 square feet and over 20 years old, so it offered plenty of opportunity for energy improvements. That is precisely what happened. The energy audit and accompanying improvement helped me bring down my utility bills every month.

What Are The Benefits of an Energy Audit at Your Home?

Here is a list of reasons you may want to consider an audit of your property.

Identifies Energy Leaks: Pinpoints areas where energy escapes, like drafty windows or insufficient insulation, saving on heating and cooling costs.
Reduces Utility Bills: Reveals inefficient appliances and systems, leading to lower monthly utility bills through targeted upgrades.
Enhances Home Comfort: Improves overall comfort by maintaining consistent temperatures and reducing drafts.
Increases Home Value: Energy-efficient homes attract higher resale values and appeal more to buyers.
Improves Indoor Air Quality: It identifies poor ventilation and mold, enhancing the home’s air quality.
Lowers Carbon Footprint: Reduces energy consumption, leading to lower greenhouse gas emissions and a more negligible environmental impact.
Reveals Hidden Problems: Uncovers potential electrical or structural hazards, contributing to a safer living environment.
Guides Renovations: Provides a roadmap for future home improvements, focusing on cost-effective energy-saving measures.
Qualifies for Rebates: May qualify homeowners for government or utility rebates and incentives for energy-efficient upgrades.
Extends Appliance Lifespan: Optimizing energy use can reduce wear and tear on appliances, extending their lifespan.
Supports Local Economy: Hiring local auditors and contractors for improvements stimulates the local economy.
Educates Homeowners: Offers insights into personal energy use, encouraging more informed and sustainable lifestyle choices.

What To Expect From an Audit of Your House?

Initial Consultation: The auditor might begin by discussing any specific concerns you have, such as drafts or high energy bills.
Exterior Examination: Expect an inspection of your home’s exterior to identify structural issues or inefficiencies, like poor insulation or window leaks.
Interior Walkthrough: The auditor conducts a room-by-room inspection to assess energy use and identify areas of improvement.
Blower Door Test: This test measures air tightness and identifies leaks by depressurizing your home and using smoke pens to locate drafts.
Infrared Thermal Imaging: Thermal cameras may visualize temperature differences, highlighting insulation problems and air leaks.
HVAC Inspection: Your heating, ventilation, and air conditioning systems will be checked for efficiency and potential energy loss.
Lighting and Appliance Assessment: The energy use of lighting fixtures and household appliances is evaluated, identifying opportunities for savings.
Water Heater Check: Expect an inspection of your water heater settings and insulation to reduce heat loss.
Ductwork Examination: The auditor looks for leaks or obstructions in your duct system that could be wasting energy.
Utility Bill Analysis: Your past utility bills may be reviewed to understand your home’s energy consumption patterns.
Comprehensive Report: After the audit, you’ll receive a detailed report outlining findings, recommendations for improvements, potential savings, and priority actions.
Follow-Up Advice: The auditor may offer advice on implementing recommendations, including information on rebates, incentives, and trusted contractors.

Each step is designed to uncover where your home is losing energy and opportunities to improve comfort and reduce costs. The goal is to provide a clear roadmap for making energy-efficient upgrades that align with your budget and priorities.

My Personal Experience

When I completed my home energy audit, I was eager to get the suggestions completed. I took advantage of the discounts offered by Mass Save. They essentially paid for two-thirds of the cost of the improvements.

A property energy audit was one of the better things I did to save money during my homeownership.Click To Tweet

Is It Possible to Do a DIY Energy Evaluation?

Yes. However, I would not recommend it. A professional is trained to find the best ways to save money and energy. Here are some tips and suggestions for DIY. I have discussed many of these things in other articles about home energy savings.

Check Insulation: Start in the attic. Insufficient insulation here can lead to significant energy losses. Check if the insulation covers all areas evenly and meets recommended levels.
Find Air Leaks: Examine windows, doors, and external walls for drafts. Use incense sticks or a damp hand to detect air movement. Seal leaks with caulk or weatherstripping.
Inspect Heating and Cooling Equipment: If your HVAC system is over 15 years old, it might be time for an upgrade. Check and replace filters as needed.
Review Lighting: Replace incandescent bulbs with energy-efficient LED bulbs. Consider natural lighting solutions to reduce dependency on artificial light.
Evaluate Appliances and Electronics: Unplug devices not in use and consider replacing old appliances with energy-efficient models. Use power strips to manage energy consumption.
Assess Water Heater Efficiency: Lower the temperature to 120°F to save energy. Insulate the water heater and hot water pipes to prevent heat loss.
Monitor Energy Usage: Review your energy bills to track usage patterns. Look for any unusual increases in energy consumption that might indicate an issue.
Consider an Energy Audit Kit: For more accurate measurements, consider using a DIY home energy audit kit available at many hardware stores.

Each step helps you better understand your home’s energy usage and identify changes that can lead to significant savings. While a DIY audit is a good starting point, it might not capture all inefficiencies.

The following questions will help you better understand whether an energy audit is good for you and your home.

1. Do You Want Your Home to Be as Energy Efficient as Possible?

Some homeowners are looking for some improvement in their heating and cooling bills, maybe a bit more comfort.

Others are highly motivated to perfect their home’s energy use for energy cost savings, environmental concerns, or comfort.

There are some minor fixes that you can do pretty quickly yourself to improve home energy efficiency – sealing windows, sealing doors, etc. These fixes can help somewhat.

But there are probably some hidden issues you cannot detect alone. A home energy audit is the best way to uncover everything.

With the information you get from your audit, you should have the basic map for fixing all energy issues throughout the entire home.

If you are willing to pay for the necessary work to fix all the issues, you can expect to have an energy-efficient home.

2. What Is the Home Energy Assessment Cost in Your Area?

Some local utility companies offer incentives or will perform essential home energy audits for you for a reduced cost or at no charge. To know what an audit will cost, you need to call around and verify the price after taking advantage of any incentives.

Remember that the bargain audits usually do not cover every little detail, like a blower door test and an infrared test.

If you want the work, ask about the cost of everything.

Once you know the actual cost for your area, you can weigh it against your financial situation. Some homeowners do not have $500 to spare for anything but essentials, while others are happy to spend the money for even minor improvements.

3. What Will You Do With The Information From Your Home Energy Audit?

After the audit and the report have been delivered, you will still have to make repairs/renovations to your home to see any improvement in energy efficiency.

Some of the work you can do yourself, like adding insulation in the attic or sealing up your windows and doors.

But other tasks, like adding insulation to the interior of walls or HVAC work, will probably need to be done by a professional contractor.

Making improvements like adding insulation to an attic can help with energy efficiency but can also help prevent ice dams, which can be a significant headache.

If you live in a cold weather climate, you probably know exactly what I am talking about.

Just as you need to weigh the cost of the audit, you will also need to decide where to spend your available money to improve energy efficiency.

With the audit, you can work with a professional auditor who can direct you on which projects will yield the most benefit.

Even if you do not have the money right now to make all the repairs, having the audit can still be helpful for planning purposes.

You will know what projects you need to tackle over the coming year or more to achieve the energy efficiency you seek.

4. Are You Going to be Moving Anytime Soon?

If you plan on staying in your home for ten years or more and having the money for the audit, it makes sense to get one. The benefits of improving energy efficiency, at least the financial benefits, are usually only realized over an extended period.

If you spend $10,000 on improvements, it may take a while to recoup the investment in energy costs. But comfort is also a significant consideration as well. Enjoying your home more comfortably over the coming years is also essential.

However, if you consider selling your home in the next few years, making significant improvements may not be smart financially.

Many homeowners are given a rude surprise when they spend money on renovations and then fail to get that money back when they sell the home. The market is not always kind to owners who have made recent improvements.

To get an accurate picture of what improvements will mean to your home sale, you must talk with a reputable real estate agent in your area – one who knows the local markets. A good Realtor can give you an idea of what homes similar to yours have sold for, homes that have been renovated, and homes that have not.

5. Are You Strong Enough to Resist a Sales Pitch?

A reputable home energy auditor will be comprehensive when examining your home. It may take 2 hours or more for them to test everything.

When the report is delivered, you should feel like you got more than your money’s worth with all the information now at your fingertips – but there may also be a catch.

Most auditing companies do not only audit; they make improvements as well. So there is a good chance that the auditor will try to sell you many improvements, some of which you may not even need. And the cost for those improvements may not be competitive, either.

On the other hand, you may find the local utility company is offering a great deal – far better than you could ever get by hiring your outside contractor. If this is the case, getting these discounted home energy improvements may be worth it.

If you want to do your work to save money, or if you want to work with a contractor you know and trust, be prepared to resist the sales pitch.

6. How Can You Prepare For a Home Energy Audit?

Before the auditor arrives at your home, list all the areas of concern. Maybe you have felt certain drafty places or wondering if your attic has adequate insulation.

Make sure you have your yearly energy bills available for the auditor. This information will help determine what can be improved in your home.

The auditor will evaluate the size and number of your windows, wall space, etc.

Expect the auditor also to ask you some relevant questions, including:

How many people are living in the home?
Is anyone home during working hours?
What is the average thermostat setting for both heating and cooling seasons?
Are all of the rooms in the home being used?
Are there any rooms in the house where the thermostats are lowered?

These are all helpful questions the auditor can use to help in making your home more energy efficient.

Interesting fact: The average HERS index score for a home built in 2023 is 57, which is around 30% more efficient than a home built in 2006.

There Are Tax Credits For Improvements You Make

If you make energy-efficient improvements to your home, you may be eligible for significant tax credits. These tax credits can help offset the costs of these upgrades.

Here’s a breakdown of what’s available according to the IRS and ENERGY STAR:

Energy Efficient Home Improvement Credit

For qualified improvements made from January 1, 2023, through 2032, homeowners can claim a tax credit of 30% of the costs, up to $1,200 annually, for certain energy-efficient upgrades like windows, doors, and insulation.

Additionally, for specific equipment like heat pumps, biomass stoves, or boilers, the credit can go up to $2,000 per year. Notably, there are limits on the amount you can claim for doors ($250 per door, up to $500 total) and windows ($600).

A professional home energy audit also qualifies for a credit of up to $150.

Residential Clean Energy Credit

This credit covers 30% of the costs for installing clean energy equipment (like solar panels, wind energy, geothermal heat pumps, and battery storage) through 2032, with the rate decreasing to 26% for 2033 and 22% for 2034.

There’s no maximum credit limit mentioned for these clean energy upgrades. It makes it a potent incentive for homeowners looking to invest in renewable energy solutions.

Put Money Back in Your Pocket

Both of these credits aim to encourage energy efficiency and the use of renewable energy in residential properties. The credits are nonrefundable, meaning they can reduce the tax you owe to zero, but you won’t get a refund for any credit amount that exceeds your tax liability.

However, for the clean energy credit, if your credit exceeds your tax liability, you can carry forward the unused portion to future tax years, offering an additional financial benefit for investing in renewable energy.

To claim these credits, you must file IRS Form 5695 with your federal income tax return for the year the improvements were made. It’s essential to keep detailed records of all eligible expenses to support your claim.

These incentives help reduce the initial cost of making your home more energy efficient and contribute to long-term savings on energy bills. Plus, they benefit the environment, aligning financial savings with ecological sustainability.

Final Thoughts

Suppose you are considering getting a home energy assessment. In that case, Energy Star offers some excellent information, including a list of contractors who perform energy audits if your local utility company does not provide one for free.

Hopefully, you now understand whether an energy audit is worth doing for your situation!

About the Author: Bill Gassett, a nationally recognized leader in his field, provided information on what to know about home energy audits. He is an expert in mortgages, financing, moving, home improvement, and general real estate.

Learn more about Bill Gassett and the publications he has been featured in. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-625-0191. Bill has helped people move in and out of Metrowest towns for the last 38+ years.

Are you thinking of selling your home? I am passionate about real estate and love sharing my marketing expertise!

I service Real Estate Sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, and Uxbridge MA.