Here is the text version of the Zero Energy Ready Home webinar, "Voice of the Builder - Mid-Atlantic," presented in August 2017. Watch the webinar.
Alex Krowka:
Presentation cover slide:
Hi, everyone. Welcome to DOE's Zero Energy Ready Home training webinar series. We're excited that you can join us today for our third Voice of the Builder webinar, focusing on mid-Atlantic builders. Our presenters today are Jay Epstein of Health E Community Enterprises of Virginia and Kiere DeGrandchamp of High Performance Homes of Pennsylvania. Today's session is one in a continuing series of training webinars to support our partners in designing, building, and selling DOE Zero Energy Ready Homes. My name is Alex Krowka, and I provide coordination support for the program. I'm just going to take a moment here to cover some general notes on webinar housekeeping. All attendees will be in listen-only mode, however, we do invite you to ask questions throughout the session in the questions section of the GoToWebinar program. We'll monitor these throughout the webinar, and after the presentation we'll have some time to go over your submitted questions that weren't answered during the webinar. This session is being recorded and will be placed on the resources page of the Zero Energy Ready Home website. Please allow some time for this, since it does take a bit to go through the process to be added online. We will notify everyone once everything is uploaded. So now I'm going to go ahead and pass it over to Sam Rashkin, chief architect of the Building Technologies Office at DOE, who will give a quick intro to the ZERH program and kind of the purpose of these webinars. And then we'll go ahead and get started. So go ahead, Sam.
Sam Rashkin:
Hey, thank-you, Alex, and I want to welcome everyone to this webinar. We believe these webinars are so important, the ones featuring these Zero Energy Ready builders who are truly building what we believe is the home of the future. And why is it the home of the future? It's because essentially a Zero Energy Ready Home delivers a better experience in every way that you can hope for once you're in your home. You're just living with a house that's ready for the future, living in a house that's ready to provide total water protection that is so often front-and-center a concern with homeowners. It's unparalleled comfort that people will never have experienced before, a comprehensive set of air quality improvements that truly make the house health-ready, technology throughout the house that works better, lasts better, and a home that's ready to go to "zero" in the future or often is equipped, when it's constructed, to zero. And why are experiences so important like this? Well, just look to what's going to happen to the housing industry. Often we won't go to a restaurant that's not a four- or five-star restaurant just because of the $80 for an experience that we're about to embark on. We won't stay at a hotel that's a three-star hotel or less because for $200 a night, we want a better experience for accommodations. Well, stars and rankings will be coming to the housing industry, and these builders will be ready, because people are going to be more informed. They're going to expect a better experience. And what's truly most important is we can deliver that experience often for a better, lower cost. So welcome to the builders of the future. Welcome to this series that is going to show you how or why these particular builders have chosen this path, what technical solutions and marketing solutions are working for them. And the first thing I'll call your attention to today with these two builders are just look at the names of their companies. One is Health E Community Enterprise. Front and center with the health experience. And the other is High Performance Homes. Front and center with, this is a home that performs different. So they're even using this concept to almost brand their home and their business as a completely new level of home construction. So do pay attention. We're so grateful these builders are generous enough to share their experiences, their lessons learned, and I hope this is useful. Thank-you so much, and back to Alex.
Alex Krowka:
Thanks, Sam. Now I'm going to go ahead and introduce our first speaker, Jay Epstein, who is president of Health E Community Enterprises of Virginia Incorporated. Jay built Virginia's first solar community of 45 single-family homes, the Villas at Rocketts Landing in Richmond, Virginia. He won the 2016 DOE Housing Innovation Award in the spec category and is the winner of this year's 2017 DOE Housing Innovation Award in production building. Jay works with manufacturers testing new equipment to improve the building design, and has been on the frontier of green building since the '90s, working with the Building America program, and continues each year to take green building to the next level. He's literally gotten his method of building down to a science, and is ready to share with you the "Simplicity of the Build."
Jay Epstein:
Thank-you, Alex, and Sam. I'm glad to be here today. It's been a long journey. I've been involved with the Building America program since the '90s, since Bush and Gore were running for election, and they were talking about strategic oil releases, about the times we were building in Atlanta, Georgia, with Dennis Creech from Southface. And Joe, Building America program. And we were at that point guaranteeing the total heating and cooling bill at a dollar a day, showcasing what we can do with builders to build energy-efficient homes. And during that time, I was awarded the Energy Value Housing Award, and it was a different time than it is today. Back in the '90s, I came back from the mid-Atlantic awards, and I was a lot younger. Very, very younger. And I'd grab my surfboard and I'd go down to the beach and get ready to ride that big wave. Everybody is excited about what we're doing. And then the waves were flat. They really didn't care at that point. Last year and the year before -- well, actually since 2014, we found a different buyer, one that was aware of green building, one that was interested in the green building. And the solar side of it was like a magnet that drew them in.
I pose a question at the beginning of this presentation, and I hope you can answer it at the end. The majority of builders in America today build a home based on the 2012 building code. As you know, it's 2017. We wouldn't buy a new car in 2017 with that type of technology. So, you know, that answer I leave for you, the builder, and for the consumer to decide, after you review what we offer today in the houses of the future. The "Simplicity of the Build" came about through my involvement all the years, through the Building America background, building homes that were energy efficient. And what we realized at the Villas at Rocketts Landing after testing six of the units, sample testing, that we have not a development, homes, a group of homes that had a lot of new technology, but we're showcasing technology that's been around, with a few new pieces. And utilizing those new pieces, we were awarded, through the Simplicity of the Build in 2017 innovation award. And we'll talk about that as we go further. But one thing to remember is that when we're building homes, and we're taking them down to zero or we're taking them down to 10 or 15 or 19, that's great. I mean, these are the ones that we're capable of doing. But where we want to be depending on your reach and the type of home that you're building is that to get into this program, the Zero Energy Ready Home program, you need to be -- on the examples we'll show later -- below 54. And that gets you to the point where the homes that you're building are ultra-energy-efficient. So that the need for the solar panels on the roof can be less. So in other words, instead of needing 24 panels, you may need 15 panels. So the cost is less, and the payback comes quicker. And that's the gist of what we're doing. The Simplicity of the Build allows the builder to subcontract your superintendent, the sales staff, and the homebuyer to understand the building concept of the Zero Energy Ready Home and build homes of the future today. And I'm talking about this today from the builder's standpoint, because you always have the manufacturer coming in to their subcontractor before it gets to the builder, and they're telling them how to sell the product. Well, the key piece is, is that relationship with that manufacturer, that subcontractor, and the rater, which is a very important piece of this. And, the superintendent. They all get together in the field, and they all work through it.
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The Villas at Rocketts Landing had a progress of awards. In 2014, we had the most energy-efficient home in Virginia certified by Earthcraft. In 2015, seven of our homes were in the top 10 showing the consistency of the build. In 2016, we were awarded the Zero Energy housing award for custom design, the Beyond Home that showcased different building systems within the home, with cooperation from BASF, HP+ Systems, and Top Build. It was the first Beyond Home in the nation. But what was great about it is, is that when we were working with Earthcraft and a fellow by the name of Chuck Bowles, which is the founder, we spent about 15 months in the design build on what's the best scenarios through the HERS rating, to, in this house, and to bring it in cost-effective, and to be able to guarantee the total utility at less than $1.50 a day. That was the piece that really became the essence about what we're doing today. But the 2016 win was about a special build using the HP+ System, using their build science engineers, and letting make and design the other building systems around their wall system. And we did this in eight months. A terrific build, and we surprised everybody because we brought it down to zero energy. And even today, after it's been operating for over a year, the meter's still moving in reverse. It's never gone above zero. And at the Villas at Rocketts Landing, I basically decided that all 45 homes were going to be solar. You know, you create this widget, and you sit there and you go, OK, I've got 45 homes. You have to buy it solar. Well, you know, the widget was created, but you had 1,000 people come through. But those 1,000 people really didn't understand or trust the concept. It wasn't until you had the first five, six people in the homes, realizing what's going on and putting it out on Facebook.
So our next development that we're doing will be 100 percent Zero Energy Ready Home. It's called Walnut Grove; we'll showcase that in a little bit. But now we're opening the marketplace to 100 percent of the buyers. So we're giving the buyers the choice to upgrade now or later. So first is what went on in the Villas. We mandated it, here, and we were only targeting 1 to 2 percent of the marketplace. Now we're giving them the option to install it later. But they're still getting this ultra-energy-efficient home, the right direction that we need to be going. As you go through the certifications with the Simplicity of the Build -- and I keep coming back to that, because I don't want to overwhelm you with the fact that hey, you've got a rater. The rater is -- we have to certify the home as ENERGY STAR®, the Indoor airPLUS, and then Zero Energy Ready to get this thing through. It is not a mountain that you cannot climb. It's not even a hill. It can happen today. And I gave examples below. The Zero Energy program has a lot of marketing pieces, program marketing pieces. They regroup the wording of what we were using in the '90s, and they've changed it and they gave definitions. They brought it up to the 21st century. So in the '90s, I was using an integrated system approach. Today we use advanced technology comfort plus durability. And there's great pamphlets that describe each one of these. You know, then "environmentally conscious design and construction applications." You know, "healthful environment." It just makes sense. You know, it's more relating to the people today. Efficiency use of natural resources, water and energy, building materials, quality build, utility cost savings, ultra-efficiency, improved indoor air quality and comfortable living environment, healthful environment. And a tighter building envelope and ductwork, confirmed by testing, quality built, third-party certification. These are the words that we're looking for today, as you market your home. And it makes it easier for you to do.
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Again, as you're looking at this, here's the Housing Innovation Awards, the 2016 winner, 2017 winner. Not a lot different, you know, from the outside. Yes, you see the solar panels up front, which is always the draw. Solar panels on the rear on this one. And we'll discuss laying out the development later in the Simplicity of the Build. But the 2016 was in cooperation with HP+ and with James Hardy. It's a great house, and in fact, I'm keeping my first Zero Energy home -- it's that terrific of a home -- myself. It has enhanced indoor air quality. But the ultra-energy-efficiency, the enhanced indoor air quality, it's all there with the winner of the 2007. And it's all within the community. And it was nice being able to go back and sample-test six of my homes that were built, and to say, hey, they all qualify.
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Consumer education is our No. 1 goal. The solar panels on the roof grab the buyers' attention, as I was saying. It's like a beacon of energy efficiency, and opens the door to the ZERH concept. And it does open the door. In 2016, what I had to overcome with the innovation award and what I titled, "What I Did," and you'll see there's video connects at the end, is what's behind the walls. Because what happens with everybody out here is that, you build this home, you're concerned about what's behind the walls, the type of windows that you're using, and, you know, the type of insulation, whether it's a closed-cell or open-cell, whether it's cellulose, whether it has a thermal break on the exterior. The buyer doesn't see it. So you have to explain that. And we try to do that through the video. And you're more than welcome to go to Facebook and check out the video or our website. The most efficient way is the tour. Making sure that your site agent is educated in what you're doing. Have him part of the building experience. Have him watching the homes going up. And train him so that he can talk about the pieces that are involved. As you can see, the homes to the Power of Zero, what I talked about earlier, are great handouts and beginnings. Your YouTube videos, the "Simplicity of the Build." And I guess one thing that's not on here that I want to add is that, let the consumer know the limitations of the products that you're offering. Let them realize that we're in Virginia so it's a net-metering scenario. That if a storm comes in and that the power goes out, that we have a smart inverter, and it will shut it off. And it will not come back on until the power comes on in the neighborhood. You know, have those limitations up front. We actually have some handouts that I can supply if people wish.
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This is what makes the widget become something real. We're really excited about the homeowners' responses. And you can see here, here was a homeowner that was concerned about her allergies, and the second benefit was the utility bills. And this is our 2017 winner. And this is our standard build, the Simplicity of the Build. This is something that you can do. You can get these numbers down, if you wish, to the 14, but you can definitely get into the program below 54, if you are building with my type found here.
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You know, as you're looking through your certifications, the HERS index without on-site generation was 47 for our home. With the PVs, it was 14. But our target home based on size was 56. This is easily accomplishable. It's something that you shouldn't shy away from, say omigosh. You just have to realize that, that 2012 code is going to get you somewhere in the 80s to the 90s. You know, and you can do the simple pieces, and you're probably doing a majority of them. Because I'll show you things that'll say, omigosh, I do this already. This thing works. And then you can see the other stars to this: annual energy cost, the energy savings, and then the carbon print. What are we doing from the environmental side?
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And here's a utility bill. And this is something we showcase. But as you get more involved with this with the solar, you have to realize that again, you have to make the buyer aware of what could be a pitfall. Because if you have a buyer, what you're doing is, on a net-metering program in Virginia, what you're doing is you're banking dollars. In the fall, in the spring, when utilities are less, the weathers are mild, and that's what this reflects. So, you have that. And then it's used to offset the higher utility bills in the summer, and the hot, hot season, or in the cold, cold winter. So if somebody's buying a house in August, well, they don't have the benefit of any cost savings. So they're going to pay their normal utility bill without the solar really helping them to the full extent possible. So advising them of that. And what we do is we actually guarantee the total utility bill to be no more than $1.50 a day averaged every year. And that has worked with us.
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Again, this is -- work closely with your rater. If you're just getting involved in it or you're involved with it now, make sure that there's a good communication with your rater. As a builder, you're going to sit there and treat them like a building inspector, you know. "Oh, just coming out here to fail." Well, that's not what they're doing. They're working with you from the beginning to the end, to improve your building system, not only for you, but for your installer and for your buyer. That certification means something. And then they'll go through -- like our wall construction, our 2-by-6 walls, we are insulated with cellulose. If you improve your airtightness of your home, if it's structurally stronger, if it's airtight, and then you can utilize an ERV to bring in your fresh air, it just makes sense. And you're getting those air exchanges down. And you get a bonus factor. You get a bonus factor on your HERS rating, because your rater's going to assume that you may have air exchanges of 4. And after the blower door, it realizes that's 2. On our 2016 winner, it was 1.2. Just crazy numbers that you can go down to, but may not be necessary for you. I'm just trying to show that we can have a lot of people join into this program, and we can do it with the Simplicity of the Build.
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I'm going to go give you some tips, but the tips are going to be on -- again, I'm an asthmatic. My concerns are indoor air. That was my key piece. I was asked that question, what of all these building systems do you like? Well, I like the energy recovery ventilator. I think it's something that every house should have. But there are pitfalls when you're installing them. What happens is, and I talk about the first one, if the ERV is located outside of the mechanical room, at pre-sheetrock inspection, mark the lines for fresh air intake to the air handler, and mark the exhaust air to the house, then inside. The install, it could be reversed, because they're following lines and it could be unmarked. So I tell my raters, when they're out there inspecting it pre-construction, mark it so we don't have that issue. The other thing is making sure that your fresh air intake is in line with your air handler. So on those extremely hot days and those high-humid days that we're now having, or those really humid days in the winter, cold days, that we're making sure that ERV, when the air handler is operating, that it's going through the evaporator coils, that it's helping to dehumidify. Or heat it. Run fresh air intake, you know, high, and the exhaust low. I mean, it's a simple commonsense approach. And you'll find that a lot of this is just common sense. You don't want to pick up the fertilizers when you're cutting the grass, on your fresh air intake. You want that down with the exhaust. And then you can build a home based on the MERV ratings, on this ERV. You may have a client, and we've had clients that had Lyme disease, has an immune disorder, and she's very sensitive to the pollens and things of the outside air. Well, we come standard with a MERV 8. We can increase that to a MERV 12 or even go to a HEPA. It really helps people with allergies, asthma, and COPD.
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And advanced framing. These are the things that we've been doing for years. At least I've been doing this with the Building America program as far back as I could date. I probably have pictures of Betsy -- I know I do -- of Betsy Pettit in here. Another one's just dating back in just something that we found standard. The ladder T-walls, the stacking effect, the California corner, which is the old name for it, your three wood corner, through end blocking. The blocking is kind of new in what we're doing now. The blocking's there because we're on 2-by-6 walls, 24-inch center. And we've all experienced the wavering wall. Well, to avoid the wavering wall, we know that the OSB expands. Well, with that OSB expanding we need to keep an eighth of an inch separation. Well, that's an air gap. Well, if you use blocking, which you have the extra wood left over from the house, that will seal that and still allow the wood to expand and keep your exterior walls straight.
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Air-sealing is one of the key pieces to controlling your HERS rating and the efficiency of the house. You know, making sure the exterior penetrations are sealed and all electrical fixtures on the exterior walls are sealed, at wired inlets or boxes. One of the other pieces is, make sure to put your cable in a blue box, not just mounted loops. Your insulating contractor will do the caulking and sealing around the windows, the studs, and the wall plates. And which will be reviewed by the rater. Again, the rater becomes your friend. It becomes the person with the third eye looking over you, making sure that they're following this procedure. The rim bands are sealed in the 2017 submittals with 5.5 inches of open-cell foam. And what you'll find is what you missed will show up in the blower door test. Instead of the Pascals being at 50, kick 'em up some after you've had your test done, while the rater's there. While you may have a subcontractor there. And that caused that extra suction. You may find areas that you can really grab into that you can improve on. The mechanical supply duct. The ductwork is between the floors. That's what we try to do. Or it's in the conditioned crawl. As the registers are installed, the ceiling, caulk bead is used to seal the register to the ceiling before the register cover is attached. Also, the nickel finish. What we use, the word is a nickel finish, on the mastic. And that's on the main duct lines throughout, all the joints. One thing that always comes to my mind through all the years that I've been involved in this is that, hey, we can pass the home with leakage because it leaks into the conditioned part of the house. And I don't know if I agree with that, as we start to tighten down these houses, and because of the effect of the tightening down of the houses, we reduce the size of the mechanical, the air handler, and the tonnage drops. Make sure your mastic and your ductwork is sealed, and make sure that you have the duct blaster on pre-construction, to look for those leakages, and seal it. Because it may at the end affect your CFMs in one of your far bedrooms. Or the air cooling of the house. You know, once a rater has tested the home with a blower door test -- you know, as I said before, ask him to just increase the Pascals and see what actually is leaking, beyond test.
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The other piece are the windows. And I've been through the whole Holy Grail, as you would use the word, of window-world. And I would set in my mind that the Holy Grail was the R-5, that gave you the higher insulation value, that actually was the window. And in the 2016 presentation, the innovation award winner, I went to a group called Becca, which made the window frames. And I used a local installer, a manufacturer for the windows. And Becca came down and did a case study and says, hey, we've never used these windows like this. He says, usually we're using a triple-pane window, installing the frames for bulletproof glass. I said, well, now you have a new use for it. And what we're finding is that we don't have to buy the European windows. We're finding that they're being made here in America. Pella, the different manufacturers, and the pricing is not what it used to be. It's maybe 50 percent more for your triple-pane. So it becomes affordable, but it becomes an option that you can offer. The standard ENERGY STAR window -- argon-filled, doubly -- is about a $25 surcharge. Get you a solar heat gain loss of 22.0 and a U-factor of 0.30. It works. It works, it works, it works. Proven with this year's submittal. And we were able to focus on that building system to keep our score below 54. Roof overhangs of 1 foot have been standard. Nothing has really changed in that reflect from the years that I've been involved in this. But now, it allows us a little bit more room for the solar, the solar panels, a new benefit.
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I'm going to talk a little bit about -- and we're going to get into solar panels, just for a second. And we're going to talk about what you have to do to make that happen, and how simply you can do it. You're looking at three homes. They're all identical. The footprint inside is identical. All I did was change the roof so that we have solar panels facing toward the south, southeast. So it's just a roof flip. So, in your designs, you may have two or three roof designs depending on how you're sitting them on the lots. The array tilt -- look at your latitude in the area that you're building in. That will give you the optimum tilt, that average tilt that you need. And then look at the pitch of the roof and size it to that. In this occasion in Richmond, we used a 7:12 pitch or an 8:12 pitch roof, depending on whether or not we needed more panels. And that got us close to the 31 on 6 degrees. And then system shading. And I'll talk about that in a second when we look at a site map. But system shading is very important in your branding. But if you do these things up-front, it becomes a simple, matter-of-fact, commonsense approach.
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Achieving value for your ZERH -- it's by far the, I would say, the one piece when you're starting your widget, when you're starting this in a new area, that you need to do your homework on. There's not a simple place to start. But I hope the form that I showed you before and the little pieces that I'm talking about will get you, and the appraiser giving value to your product. So the high-performance home appraisal addendum is something that's put together where the buyer and seller signs it together. And we're requesting a green certified appraiser. In our area we have 29 green certified appraisers. You may not have that where you are. You may not have one. But what you need is you need a willing appraiser, that's willing to take their time to understand the process before completing the appraisal. So what you have to give them is you have to give them the ammunition. You have to give them the pieces that they can work with to back up their assumptions. So in the description of materials, show your upgrades, as I have listed here.
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The key to building the home as I said before is, you've got to build it cost-effectively, at appraised value, that offsets the cost of improvements, and makes you a profit. This can be done if you are following -- if the appraiser is working with you on giving value. You're just getting ready to show value for them. We already talked about the marketplace, the 100 percent of the buyers. But I'll give you an example below. Let's look at the upgrade estimates for an energy improvement cost versus present worth of energy improvements. And we're taking the house that was sold at $330,000 with solar. As you can see, the upgrades, the conditioned crawl. There was cost savings, 2-by-6 exterior walls, that passes on. The attic access. We use what's called an attic zipper, which is a sensational piece that actually works well, where you can actually Velcro R-50, which is what we have in our attics above it, and it's just a great, simple piece. R-21.5 cellulose in the walls, R-49 in the attic. The windows, the low-e-argon windows, you can see the cost there. The heat pump hot water heater, the carrier 15 SEER variable-speed heat pump. The ERV, energy recovery ventilator, that's a MERV 8. And Earthcraft design, inspection costs, or Top Build, which is who we're using now. The total cost of the construction upgrades were $9,000, which is about 3 percent of the cost of the home. And you can stop there and offer it at that point. And they're getting this ultra-energy-efficient home. It by far just makes sense to the buyer. Then you can add the solar feature. This one has a 5.4 kW system. And there's your added cost for that. And if you install that yourself, you'll find that there's an extra profit mode built into that. But now we're at $25,000 for a total build on a $330,000 house. Less than 10 percent. It just makes sense. Now, we need to justify those values. So the homes are designed for continued saving and producing the electricity for the life of the 30-year loan.
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The energy of the savings of the first month start as the buyer moves in. And this testing with this home, in year 1 the saving is $1,991. This represents the difference between the energy cost of a conventionally code-built home and the energy cost of the upgrade zero home with PV panels to generate power. And this is one piece that you can actually use in sales. But we're still back with the appraiser, convincing him that we're going to give him value.
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The next graph shows the present value of the utilities over 10, 20, 25, 30 years. And it's discounted for 4.5 percent. The savings in utility costs continues. The present value for 25 years is $29,000. Year 30 would be $32,000. So in summary, we're actually showing that these costs of improvements, there is a return, and they have value. And that's what you have to show the appraiser. What happens next. I'm having fun.
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I have to continue to say. You know, the Simplicity of the Build is showing me that we can build in a simple manner when it's understandable to a lot of the builders out here, and we can build homes at an easier fashion in an easier way. We can still bring in innovation; we are adding innovation as we go forward. And we can standardize those innovations as we go forward. But we know we have a baseline that we can start with, a baseline that other builders can get involved with. So with the Rocketts, I've got one lot left. And now I can say my widget works. It was tough at first, but now the widget works. And again, for this community, with the widget design we were awarded the innovation award. And what's next in the future? We're opening up a new ZERH community. We are now 100 percent committed to the Zero Energy Ready Home, because it's committed to us through marketing. It's opened up the marketplace to 100 percent of the buyers, so they have a choice. And we're proud to be getting this new development. We're right now in site development. There'll be 75 single-family homes. The prices will start in the $340s. The homes will be built, as I said, to Zero Energy Ready. The buyer now has a choice, you know. And presales start in another month or so. But still, in the meantime, as my world evolves, and I'm still involved in three condos, which are LEED-certified condos, that will be Zero Energy Ready townhomes. So that will be our submittal for next year. And then I'm still working with BASF, HP+, on a beach house that's under construction now. That will be another submittal that has a thermal break that's 360 degrees around the exterior of the house, using the HP+ system. We're excited to get involved with that, too.
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For more information about the Simplicity of the Build, I have it listed here. To the right are my links to the website, to the videos. We have a video; it's one with popcorn, I would say. It's a nine-parter that takes you through the building systems on a 2016 win. There's also another video up, which is on my website, which was put together by James Hardy, that talks about what motivates what I do. And it's a very good piece, and it's used on their website. And so visit the builder's story. And I thank you for my time here. And I've enjoyed doing this presentation. Again, with my thoughts, and everyone's thoughts are now centered on Houston and Louisiana, and I hope them well on their endeavor through this storm. Thank-you.
Alex Krowka:
Thank-you, Jay. That was a fantastic presentation, and we really appreciate you coming on to do that for us. We did have a couple questions come in, but in the interest of saving time, we're going to save those questions until the end. So I'm going to switch it over to Kiere DeGrandchamp here. Kiere is the head of construction operations and builder of High Performance Homes. He has more than 30 years of environmentally responsible residential home-building experience, dedicating the past decade to net-zero-energy home-building specifically.
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Kiere has worked through the architectural designs, structural engineering, land development, and construction of over 70 net-zero homes across the United States. His recent national award recognitions include the 2015, '16, and '17 U.S. Department of Energy Housing Innovation Awards, the National Green Building Standards gold and emerald level certifications. And he has been invited back to the Capitol Hill for the third year in a row to present on sustainability in the home-building industry. In 2014, Kiere founded and started High Performance Homes Pennsylvania, HPH, operating from the Links at Gettysburg Golf Course as a small, custom, Zero Energy Ready Home builder that focuses on on-site, French country homes and offsite custom homes ranging from modern to traditional and everything in-between. He holds a bachelor of science and engineering from the University of Maryland, and his goal is to change the world. So, go ahead, Kiere.
Kiere DeGrandchamp:
Thanks, Alex. I appreciate you having me here, and I want to thank Sam Rashkin.
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We talked briefly coming in to this that we probably wouldn't be here if it weren't for Sam and his innovation. I know he can't talk right now, so I hope he's just blushing. The fact that he had the foresight to think of the future of home-building, develop ENERGY STAR, and now the Zero Energy Ready. And I want to thank Jay Epstein, my builder comrade and friend. He and I spoke a little bit yesterday so I'm not going to overlap too much of what he said, but he had so many great points, I'm just going to try to expound a little bit on it. As Alex has explained, I started HPH in 2014 and have been building for an awful long time, over 30 years. But I was challenged with the possibility of doing a Zero Energy Ready or net-zero, and that intrigued me, and now that's all I do. I live and sleep this. So I've been building here at the Links of Gettysburg for about three years. We have dedicated all of our building practices to the Zero Energy Ready program, to the DOE. We also go through the other certifications, the NGBS, which is National Green Building Standards, similar, but DOE Zero Energy Ready was what I'd been doing from the beginning, and I didn't realize it until Sam and I got together and he said, hey, this product that you're building really does fit this perfect. And my little tagline is, and I told my daughter, all I want to do is change the world. So that's why that's on there.
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So we were asked on this webinar to, I guess, talk about the marketing, how a Zero Energy Ready or net-zero builder can market, and what trials and tribulations that we have and will have. So I just want to over a couple things -- points. So what we generally do when we're marketing, DOE has an extensive library of logos and marketing pieces that we choose online. We have pamphlets. Fortunately we're able to be sponsored by the Department of Energy to do a little bit of teaching, so we do have a great slideshow presentation that we use in many of our handouts, brochures, to educate the clients or the potential homeowners, as much as they want. But when we're doing our pro forma for new homes, we have a description of the energy cost savings. We have the ability to say, OK, you've got this 2,300-square-foot house, and on a regular home it's going to cost you X. And Amy has the charts down, so we can also show what it's going cost at the net-zero or near net-zero. We do build with solar shingles and solar panels. Solar shingles up here at the Links of Gettysburg, but we have the ability to strip that off and just make it Zero Energy Ready. One of the most important things when we're marketing is the customer testimonial. They're our biggest advocates. I could have a thousand advertising agencies, wouldn't do what one good word from a happy client that's been in the home for years, living in a healthy low-cost, safe environment that they've chosen. Again, I did speak briefly about the classes and the training programs that we have for the appraisals, as Jay has explained. It is so important when we're at the -- I might not say the top of the market as far as cost is concerned, but we are above what a regular code-built home would be. So it's important to get the highest appraised values. So we do offer these classes for the appraisers, the real estate agents, the local architects, and the homeowners who are interested. Why this marketing is important and why is it successful? It's the third-party verifications, as Jay has explained, it's the No. 1. I can sit there and say, I've built a bunch of these houses, and they're all fantastic and people are always happy. But it's more important for us to have it DOE-certified through a third-party verifier that checks every single little fenestration, every little flashing detail, all the little nuances that make it a Zero Energy Ready Home. Without the proper checks and balances, we're just saying it's going to be good, and then when you go to the testing, the blower door, which Jay alluded to with the ACH50, air exchanges per hour, basically we depressurize the house to see how much leakage there is. If you've got a leaky house, you generally don't know it until then. And that's going into the forensic mode, trying to figure out what happened, where is it going wrong. So the third-party verifiers are so important in order for us to truly check as we're going along. Again, the happy customers are the best agents. They are. I'm very fortunate where probably the last three or four years, I've had, every client has been -- I consider a friend of mine. We've got testimonials on our website that you can see. And they are wonderful and genuine. I'm very fortunate here at the Links where I get to see these people on a daily basis, so it's neat to have them as our best advocates.
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So this is an example of what we can and do do. Amy will meet with -- Amy is my director of sales and marketing, I keep referring to Amy -- so Amy will meet with the potential client and show them our credentials. Show them that we won the 2015, 2016, and now 2017 Zero Energy award. Very happy and proud doing that. Also, the 2017 award winners, pictured in the lower right, that is our lot 66, it's Craig and Leann's house, and this is their actual data. So what Amy will do is she will collect the energy bills, each client after they move in, to every three months or so. She puts them on a comprehensive spreadsheet so that she can track the data, see where it is. And also, if somebody wants to entertain a similar-size home, they can say, OK, well, what did this annual model cost. And you can see from here that the average utility cost over a year is about $44 a month. Little bit of highs, little bit of lows, but that's a good number. When it comes to the HERS, HERS is like the miles per gallon for a house. It tells you where you are in relation to the rest of the industry. 100 is a code-built home, 2009 is what they build to here in Pennsylvania. 2012 is what most of the country builds to. Jay and I and others like us are building literally into the future, probably 2015, 2020. I'm sorry -- 2020, sorry. I get corrected. So when you're talking about a code-built home at 100 HERS, a very good home, ENERGY STAR, is going to be right around 60, 50. And those are fantastic homes. Well, we're fortunate, where at this home is a 16. And if you take off the solar it would be a 35. We do feature all of these homes in our community page on the website, and also on the Facebook. So it is important for us to be able to market that.
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Oh, there's Craig and Leann right there. We don't have a live link, but if you guys want, we can send you the information. Click on it or just go to HPHPA.com, and you can see what Craig and Leann and everyone else has been saying about our experience that we had with them. And we truly do feel like a family with them, and that's what they have on this written brochure. So again, we're videotaping their testimonials, we're taking professional photographs of their homes, we're doing all the certifications. When we have the fortune to have the announcement for the 2017 HIA award, Amy and I went over to Craig and Leann and handed them their plaque and said, guess what? You're the top 1 percent of 1 percent. They were tickled to death.
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We did talk briefly about the appraisers. It is very, very important to try to get a green appraiser. As Jay said, he has got many down in Williamsburg. We have little to none. It's a little bit of a struggle, but we have been building consistently for three years at the top of the market where the appraised values are showing, and it's becoming easier and easier, but we are creating our own appraisals. But Amy will hand this document to the homeowner to make sure that when they're talking to the bank, they're educating the bank and the appraiser, as well. So on the far left, you see it's an Indoor airPLUS checklist. We do not only Zero Energy Ready but Indoor airPLUS and WaterSense. These homes are very healthy. We have an indoor air quality system that sinks everything down to 0.001 micron. Not to bore you guys too much, it's a MERV 14 titanium dock, (inaudible) plates with ultraviolet light. In essence, it knocks out all of the smells, the allergens, the bacteria that's in the air. So you're living in a very healthy environment.
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And there's Sam -- Sam and I looking at actually this house, lot 66, the 2017 award winner. We use a Superior wall. So I guess I was in a webinar -- I'm sorry, in a seminar -- with Sam many years ago. He says, Kiere, you're doing this right. You're doing everything right. Well, why don't you consider a Superior wall? So I think this is the first house I've used it on, and I've used it on every single one ever since then. People ask me my challenges that I've had. Well, the No. 1 challenge in building an energy-efficient home is the ACH50, or the air exchanges per hour, and air-sealing. Fortunately we have companies like (inaudible) who will certify the windows for their air leakage. We have to take great lengths in running around and making sure that everything's sealed up. The hardest part was the band board, lost R-value, and also the thermal envelope. Thermal envelope (inaudible). The entire structure has to have a good R rating for it. So my solutions, on the air-sealing, I use a lot of adhesives and sealants and foam. Generally when I was building houses in the past, I would go through a case of glue, as it were, and now when I'm building to my level or building probably seven to eight, nine case loads, I'm sealing everything up. I put a layer of glue on top of my wall, and then I put my sill sealer on top of that, and then I go from there. Everything is completely checked, verified, taken pictures of. One of my best innovations is I put down there SIPs band. I build with SIPs, which is structurally insulated panel system, which means it's a 5.5-inch-thick EPS foam core all the way around the perimeter of the house. It has OSB on the outside and OSB on the inside. But I was still struggling, because I would do a conventionally framed band board. So now what I do is with the Superior walls, I have a 10-inch wall, I take a 3.5-inch SIP, and I put it all the way around the perimeter. That gives me an R value close to 16 just to start, and it makes it completely sealed. So I don't have to worry about it; I don't have to think about it. I can see it, I can foam it up. I do put another 1 inch of open-cell, and a little batt, so I can get R-30, which is what I'm trying to get on my continuous walls. So again, back to the whole home approach, building super-insulation, I use the SIPs panels that are R-25 to 30. I use the Superior walls, which is 21. I do an R-10 under slab, so that your feet are comfortable, you're not just standing on the 55-, 58-degree temperatures of the earth. It's actually a little bit warmer to your feet. It's helping the house. And then when I've built it in the house, I hang the drywall in the ceiling, and I take 1 inch of closed-cell foam. I spray the entire ceiling with sheetrock on the top. What that does is two things: It gives me a little bit of R value extra, plus, it completely seals it. That way, when I'm doing my blower door test, I know I'm consistently getting a 1 to a 1.1, 1.2, without even undergoing too much work.
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Everybody asks me, well, doesn't it cost more money to build like this? It does, it does. In general, we say 7 to 10 percent. So we take this house that is 2017 and won, lot 66, Craig and Leann's. It's about $500,000, somewhere around there. It's a good round number. So we're thinking 7 to 10 percent. So we broke it down. Where did that cost come into play? Well, we do geothermal; it's a standard here. So geothermal HVAC cost an additional $15,000. We do a SIPs construction exterior wall like I said before, and that's about $5,000 more. The solar shingle technology installed is about $23,000, but fortunately, through the Form 5695, there is a tax credit of 30 percent currently for the homeowner, so that's nice. The Superior walls adds about $5,000, and then another $1,500 in small charges, that's the air-sealing, the special attic access, I have to put into that house, things along those lines. Does it make sense, for this incurring cost? No, it really doesn't. And that's the first thing I said yesterday when I was talking to Amy about this. It doesn't make sense to us, because it does cost more money. Then I started rethinking it this morning, and it does because I don't have any warranty issues. It's a perfect home that's been double-checked by the best industry standards, and a third-party verifier. I know not to worry about any air leaking, any bugs coming in, any water coming in, any issues at all. Plus, it's the right thing to do. I didn't start building like this just to make a name for myself or make money. I do believe that this is the responsibility of the builders. We have the technology; why wouldn't we be able to do it? The impact of building like this. We're finally starting to gain a little recognition, through programs like this, through DOE. Sam Rashkin has been the biggest advocate of standing on the podium, the highest PR. Yes, we can build like this. It is a possibility. It's not just on paper. We've built 70 of these, and they work. They work perfectly. The nicest thing is, the code is increasing, the IECC is getting closer and closer to where this high-performance home technology is. So in California I think in a couple years, they're going to be pretty much where we are. So the nice thing is, the availability of the practices and the fact that we are building to this level, it's creating demand. People are understanding it. People want it now. Before they didn't even know to ask for it, and now they are.
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So for further information on us, we are on Facebook. We do the Tour of Zero products through DOE. You cannot click on this, but we can get you the information, or you can write it down. Like I said, all we want to do is just change the world.
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So thank-you very much to Sam and Alex and DOE for giving us this opportunity. I'd love to do this more. That's it.
Alex Krowka:
Great; thank-you, Kiere. That was another great presentation. We've had a couple questions come in.
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So we'll go over a couple of the questions, and then we'll finish off with some closing thoughts from Sam. One of the questions, or a couple of the questions, have been whether or not the recording of the webinar will be available, or if the PowerPoint slides will be available. They will. We have been recording this webinar, and as I said at the beginning, it will take a little bit, probably a couple weeks, for us to get the webinar posted onto the DOE Zero Energy Ready Home resources page. But it will be up there, and I will notify everyone once that happens. Once we post the video, we will also post the presentations, so everyone will have access to that. So I guess going to some of our questions here, for both Jay and Kiere ... Is anyone doing prefabricated stud walls with exterior insulation and installed windows?
Kiere DeGrandchamp:
For me the SIPs panels are kind of prefab. They come out in sections 4 to 6 feet, generally. They do make them much larger, but they become cumbersome and heavier. The windows are not installed, but I actually talked to Sam, I guess a couple weeks ago, and there is a prefab plan that I do want to go visit, to see if we can make that happen. Because I do think and I agree with Sam that is the future. The more we can take out of the field and put into a controlled environment like the Superior walls are and the SIPs panels are, the better the product will be.
Jay Epstein:
What I've found is -- this is Jay -- what I've found is that it's the framing cost. It's that labor cost. In Virginia, this area, we're about $3.75 a square foot. When you get down to South Carolina, it could be as much -- over $10 a square foot. So that's when you'll find that prefab walls are more effective costwise, but we're still stick building. And what we do is we make the framers believe. You know, we work with them at that framing stage, with the superintendents, to frame them the way that we want them to be framed. And if it takes a little bit longer for them to learn the way, then we allow that. But we build it right, from the ground up, from the sticks. Because right now, labor at $3.75 works.
Alex Krowka:
Got it. Thank-you. And then what brand of ERV do you guys use?
Jay Epstein:
I'm using Renew Air, I'm testing a Brond. The Brond ERV is a little bit cumbersome. They always say with an ERV, well, you can put it out in the garage. But it just doesn't make a lot of sense, because if it's not airtight and you've got problems with your car running or something like that, it'll send those gases all the way through. So just from a commonsense approach, we dictate an area in our mechanical room or the next room over, so we can run the lines to it. The key to that ERV is how does it communicate to the air handler? Excuse me -- to the mechanical system? So that's why we're testing now the Trane multistage compressor, because that will have a longer run time. It'll basically, instead of having the shut-in, shut-offs, it'll consistently run longer while you're running the ERV.
Kiere DeGrandchamp:
Yea, this is Kiere. I'm at a little dichotomy, where my first 50 or so I built with the ERVs at each (inaudible). And then I had to go and do a service call. I had to check it out. And you have to get up on a bucket and open up the ERV side and two filters inside. One says you have to wash or clean every three months, one said six months. And I kind of got scared. What if people aren't taking care of that? What if that just falls short of the maintenance package? So I actually built the last five to 10 without an ERV, using the Panasonic system. Now I am introducing unconditioned air from the outside, and if I had a model around that, but with my low MERVs, low ACH50s, high-performance, lower bills, right now it's a good fit. I am in conversation with another ERV company that has external filters and more easily accessible for the homeowner, or service tech. I'll probably go back to that.
Jay Epstein:
Can I add one more piece to that? What we've done, and Kiere's right -- we have a problem with maintenance. You know, the ERV is another filter that has to be changed. And the ERV filters can cost. You know, they can be $10, $15 a piece. What we did is we went online, got the MERV 8 filter in a roll. And I bought a whole roll of it for like -- I think it was less than $100. And what I did is I cut 10 or 12 of them up, you know, 10-inch-by-10-inch filters, and put a ribbon it and handed it out to all the homeowners. Giving them an incentive to change the filters. But filters change is an issue.
Alex Krowka:
Got it. And then, if you guys use damp spray cellulose in the walls, are you ever concerned about added moisture in the walls?
Jay Epstein:
I think I can answer that one. (Laughs.) I almost added a couple other pictures. Yes, we use closed-cell foam. Excuse me, we use the sprayed-in foam. 20 percent of it is moisture. You're hitting that back wall where the OSB is. The manufacturer says, hey, you can close it up, wait 48 hours, whatever, you know. I didn't believe that. So we have two moisture probes. We have one that's a 5.5-inch moisture probe. And then we have one that's for the wood. So we're checking the moisture before we put the sheetrock in, but during the times of the season, when you've got high humidity on the outside, you have no ventilation going on in the inside, you've got your cellulose sitting there, there's no way for it to dry to the outside. So it takes a little bit longer. So monitoring the cellulose is the way to go. And that's with a -- like I said, it's a 5.5-inch probe that we utilize. And that gets to that back 2 inches. And that's how we've overcome the issue.
Alex Krowka:
Great; thanks, Jay.
Kiere DeGrandchamp:
I do not use cellulose.
Alex Krowka:
Alright, so we'll go ask a couple more questions here, and then we'll need to wrap up. So the second to last question: With such low building loads and the elimination of the federal tax credit for ground-source HVAC, why not go to a Mitsubishi or Fujitsu ductless or even ducted system, since they're known to produce more Btu per watt due to their lack of water recirc pump?
Kiere DeGrandchamp:
That's hysterical. I mean, we have this conversation almost daily. I've got a 4,000-square-foot house that only needs a 1.6 ton, so we laugh -- why don't we just do a window air conditioner? Because literally, the load is that low. I'm actually -- I did the geothermal, but because of the 5695 tax credit not being available anymore, we do give people an option to go to an air source. And yea, I am going to look into the ductless. I'm just going to say it's a little foreign to me right now and high-risk at first. I want to make sure that what I'm doing is right. I just need to get an HVAC tech to explain it to me a little bit better. That is not my strength, so I lean on my third-party verifiers to help me.
Jay Epstein:
In my viewpoint, it's only one part of the building system, the HVAC. And we're able to downsize it now. And the air flow going through the conditioned part of the house, the ducting system, we're used to that. We're used to that way, of the past, and it seems to be a proven past that's going into the future. As far as getting a higher SEER value, the Trane units that are coming out -- and what's going on is that geothermal lost its tax credits. So now Carrier, all the manufacturers are coming out with multistage compressors, because they can compete with them now in the pricing. So we're finding that that may be the next wave of the future. But I'm not saying not to do the split system. Again, I'm kind of stuck in the old ways, and I move forward in a proven pattern. And with the HVAC like Kiere was saying, the tonnage requirements are reduced because of the tightness of the house. That tends to be the way that I'm going forward, would be my next one -- we're actually setting one in right now -- is the multistage compressor. So we have longer run times, and it works, and it will run in unison with the ERV.
Alex Krowka:
Got it. Thank-you. And then our last question before we go over to Sam: Do you find many of your customers also have electric vehicles? And if so, how does it affect electricity usage?
Kiere DeGrandchamp:
I have people asking me about it, but we currently don't have one. I have an EV charging station at the Links that anybody can use. But it's just another piece of the formula when you're mocking something up. You can use a dedicated system of the solar to do the EV charging station, or we can just say, OK, I need another X amount of kilowatt hours to overcome what they're using. So that's an easy algorithm. But we currently don't have it, for us.
Jay Epstein:
And we don't have it, either. But we use a solar edge inverter, and that solar edge inverter, you can watch your power source, your power savings. And one of the examples is, you can operate your ERV for so many hours a day. So, but, in reality, we're not there yet. The buyer I'm sure will have it and will be adding it. We were asked on one occasion, but they decided not to add it.
Alex Krowka:
Great; thank-you. So I think this ends our Q&A portion of the webinar. Thank-you to everyone who submitted questions, and I apologize to those whose questions we weren't able to answer on the webinar. I do encourage you to get in touch with both of our speakers and follow up with them, if you like, or get in touch with us at the Zero Energy Ready Home program, and we can answer any additional questions or pass you on to Jay and Kiere. So I'm going to pass it over to Sam Rashkin again, for some closing thoughts, and thank you guys, again.
Sam Rashkin:
Hey, thank-you so much, Alex. First of all, I want to say what an outstanding webinar audience. Those are great questions, and that's a great indication of the interest in this topic. What I always like to do to close the Voice of the Builder webinars is to recognize some of the most incredible points that they are making. We started off with Jay and what was really amazing was he was able to guarantee his homes at $1 a day or about $30 a month for the energy bill. And then his costs are about $9,000 additional incremental costs or in other words, about $40 a month on your mortgage. And you only can imagine what kind of positive cash flow his owners must be in. What I'm also really impressed about is that he's providing an R-5 window -- triple-pane window. It feels different. It sounds different. It operates different. It's a tangible indication of quality that's truly I'm sure paying dividends in terms of what his buyers feel about the quality of this home. Also, I'm intrigued to find more about that Velcro approach to getting the insulation installed on the slope, I believe. What a great idea, and I think that could be really powerful. Also, very significant with Jay -- I hope you picked up on this, in the answer to that question, is he finds a proactive way to get the filters at low cost to his buyers. One of the biggest challenges you will have is persistence of your ventilation systems. If you provide a great ERV, HRV, whatever you provide, but the homeowner doesn't do their side of changing filters and checking, then you have a very tight home that can have factors of comfort and health affected. So being proactive in giving them the filters is a great idea. And the other thing I really hope you noted about Jay's presentation, how proactive he is, getting on the front end to make sure the appraisal process will work. So amazing stuff from Jay.
And then, with Kiere, equally, so important things he was saying. First, the way he's so effective integrating his consumer into his marketing strategy. His best sales force is his buyers. He educates them, he gives them a great experience. It's just an amazing effective way to kind of change and reduce the cost of your marketing once you build a high-performance home like he does. And I love that he uses the DOE slide deck to do some of his education. Most people don't realize this is a great resource. We have this really, really highly refined and improved over time set of content, and he's leveraging that, which is very, very important. The other thing that's really significant about Kiere's comments is how he leverages the partnership with DOE and the third-party verification to build trust in his company. And you all know what a challenge it is when a homebuyer who only does this process once, twice, maybe three times in a lifetime has to approach you, and how do you get that trust going right away? Very, very impressed that he's using the SIPs band joist -- it's a detail I've been advocating for a long time. And I hope you picked up that he has no warranty issue to worry about. He sleeps at night. He builds a much better home. And where his incremental costs may be approaching $50,000 for some of the extraordinary measures he puts in, if you take out just the incremental costs of the geo and the solar, that gets him closer to about a $15,000 or less premium, which is starting to be about $70 a month on the mortgage or less. And I'm sure it can outweigh the savings every month on ownership. So, some really great insights from both these builders. I can't thank them enough. And, regarding the posting of the webinar, please do also take a look at the other 20, 25 other webinars that are posted. There's some amazing content for you from the best world-class experts on many technical subjects, on sales and marketing, from the builders like Jay and Kiere, so please do take advantage of that resource, 24/7, some great content on our website. Thank-you so much for attending. I hope this was useful. We'll see you at the next webinar. Thank-you very much.