Will greening my home increase my property value?

solar panels
Greening your home can be much simpler than installing solar panels all over your roof. See more green living pictures.

The green movement has been gaining momentum for the past decade, and many believe it will continue to gain influence in how we live, travel and build our homes. While the term "green building" may bring to mind such extreme tactics as harnessing wind power or lining our roofs with solar panels, it's actually much simpler than that. It's essentially building with the future in mind. For the homeowner, this means keeping an eye toward future energy use, utility bills and the comfort and health of occupants. A natural consequence of these actions will be the creation of a home that also helps preserve the future of the environment, as improved energy use and healthier homes naturally help to conserve resources and lower greenhouse gas emissions.

There are three basic ways to make your home greener. The most common is to improve energy efficiency. This is done by tightening up the house so that valuable heated or cooled air isn't escaping unintentionally. It can also be accomplished through the use of more efficient lighting, updated appliances and simple changes to your heating and cooling systems.


The second most common way to green the home involves adding environmentally friendly features. This could include water-efficient fixtures, native landscaping and ecologically responsible materials that have minimal impact on the Earth.

Finally, you can make your home green by making it healthy. Healthy homes are those that contain fewer pollutants and cleaner air for occupants; they also release fewer chemicals to the outside in the form of off-gassing. You can create a healthy home by increasing ventilation and by paying attention to the materials that make up your furnishings, flooring and wall coverings.

While many people support the idea of a greener Earth and would like to incorporate some of the green techniques listed here, they worry about both the cost of implementing these methods and the effect they will have on the value of their homes.

You may be surprised to learn that greening the home can have a significant impact on your bottom line. Many green techniques have been proven to not only increase the sales price of the home, but also help act as a marketing tool to get your home noticed. Finally, homeowners can benefit from the many tax credits and incentives for going green.


Improving Energy Efficiency on the Outside

Proponents of green building have long believed that by creating sustainable, environmentally friendly homes, homeowners could also expect increased property values and lower utility bills. A 2007 study by the National Association of Appraisers has shown that this is indeed the case. For every $1 in annual energy bill reduction, a homeowner can expect an increase of $20.73 in home value [source: Eco-Smart]. What's even more surprising is how easy and affordable it can be to achieve these lower utility bills.

The best place to start is simply to tighten up the home's exterior so that expensive heated or cooled air is not escaping to the outside. Start with a simple tube of caulk. By sealing the area around your doors and windows, and filling in wall penetrations (like those around the dryer vent or the cracks where cables and wires enter your home) you can save around $100 a month [source: USGBC].


Next, let's look at windows. By switching to EnergyStar rated windows, you can save $350 a year over single-paned windows and $70 per year if you already had double-paned models installed [source: Myers]. These windows cost around $65 a piece, making them a wise investment with a fairly quick payback for many homeowners [source: Gorman].

Now, let's take a look at insulation. In an 1,800-square-foot (167.2-square-meter) house, you can expect to save $436 in energy costs a year by installing a R-30 fiberglass batt insulation in the attic. This is a fairly simple do-it-yourself (DIY) project that can translate to big savings and a significant increase in the value of your home [source: Jacksonville Electric Association].


Improving Energy Efficiency on the Inside

A programmable thermostat can really help save you money.

When it comes to heating and cooling, many homeowners believe that going green means complicated new technologies and expensive investments. While there are options, such as geothermal heat pumps and highly efficient new units, the things that can make the biggest impact are actually the most affordable. Start by sealing your ductwork. All it takes is a can of duct mastic and a roll of aluminum tape to keep air from leaking out. You can save yourself more than $100 a year [source: Gorman].

Invest in an EnergyStar programmable thermostat (around $42, if self-installed), and you can expect to save $180 a year in reduced energy bills [sources: Gorman, EnergyStar].


When it comes to lighting, saving money is as easy as changing a light bulb. By switching out just five of the incandescent bulbs in your home for compact fluorescents, you can save $100 a year in operating costs [source: USGBC]. While some people are turned off by the higher upfront costs of these bulbs, many are surprised to learn that they last an average of 8 years, making them a much better investment over time than incandescent bulbs [source: EnergyStar].

Finally, if you plan to invest in new appliances, consider those stamped "EnergyStar Certified." On average, you will reduce your annual utility bills by $50 for every EnergyStar appliance you install in your home [source: USGBC].

The average homeowner spends $2,000 a year on utilities, half of which is spent on heating and cooling bills [source: EnergyStar]. By implementing some of the steps above, you can easily cut your utility bills by $1,000, increasing the value of your home by $20,000 at the same time.


Going Green - Marketing the Intangibles

Many green homes are marketed only in terms of reduced energy, simply because it's the easiest to quantify. While energy reduction is important, many people are willing to pay a premium for green features beyond those that simply save money.

A 2007 study by Green Builder Media revealed that home buyers are willing to pay 11 to 25 percent more for green homes [source: Sekine-Pettite]. In a separate study by the National Association of Homebuilders, 50 percent of home buyers who were interested in green homes were motivated by health factors and environmental impact more than any other reason [source: Perkins]. This means that while many green home buyers are looking to save money on energy bills, half are motivated by nonmonetary factors and are willing to pay a premium for their home if it satisfies these criteria.


By following the energy saving steps in the previous section, you're already on your way to helping the Earth. But there are other methods you can incorporate that may further reduce your impact.

Water supply has reached a critically low level worldwide, and yet, it's still wasted far too often. In the United States, close to 60 percent of water is used for irrigation and landscaping [source: Clemson University]. To reduce your impact, consider drip irrigation, rain barrels and the use of native plants. Inside the home, water reduction can be achieved through the use of low-flow plumbing fixtures.

Homeowners can also impact the environment with their choice of materials. By choosing rapidly renewable resources, such as bamboo, linoleum, cork and wheat board, homeowners can ensure that their furnishings and flooring will have minimal impact on trees and other resources with long regrowth periods. To help reduce carbon emissions, choose materials produced locally. To further reduce your impact, install reclaimed materials, such as salvaged wood floors, recycled bricks or masonry, and refinished furnishings.

Many fans of the green building movement are most interested in the impact that our homes can have on our health. To make your home healthy, focus on materials with low VOC content. VOC's, or volatile organic compounds, are chemicals used to produce most furnishings, paints, floorings and adhesives.

Another characteristic of a healthy home is breathability. As houses are built tighter to help reduce energy bills, natural ventilation is reduced. By installing a central ventilation system, you can market your home as not only green, but healthier.


Laws and Incentives for Going Green

wind power
If you upgrade to wind power, as this home did, you can receive a tax credit each year through 2016.
Peter Macdiarmid/Getty Images

As the benefits of green building continue to emerge, many municipalities are enacting laws that require certain green techniques be used. In addition, both states and the federal government are putting financial incentives in place to encourage green development.

The American Recovery and Reinvestment Act of 2009, also called the stimulus package, allows a tax credit of 30 percent of the cost of small improvement projects, up to $1,500. This includes window, door and roof replacements, insulation projects and replacing old appliances with more efficient EnergyStar models.


For those interested in more advanced greening projects, the Recovery Act also allows homeowners to take $1,500 tax credits each year through 2016 for up to 30 percent of qualifying projects. This includes geothermal heating systems, wind-powered homes and solar water heaters or panels [source: Hadhazy].

Another option at the federal level for homeowners looking to add green improvements is the FHA Energy Efficient Mortgage program. It allows homeowners to borrow money at very low rates to make EnergyStar upgrades, add solar or geothermal power, or make other specified green improvements to their homes [source: North Carolina State University].

To find a comprehensive list of green building incentives in your state, visit the Database for State Renewables and Efficiency. Many states offer property tax exemptions, free or expedited building permits and other benefits to homeowners who install green features.

If financial incentive isn't enough to motivate you to go green, consider this: In August 2008, the city of San Francisco enacted a new building code requiring every building (commercial and residential) new project or renovation to adhere to green building standards. For homeowners, this will mean meeting the GreenPoint system, a local green building certification program, similar to the USGBC'S LEED system [source: Buchanan].

A similar initiative is taking place in Montgomery County, Maryland, a suburb of Washington, D.C. Here, lawmakers are working to pass legislation that would require every new home be built to minimize environmental impact and energy use [source: Marimow].

These residential green laws follow on the heels of nearly a decade of similar laws aimed at the commercial sector. There are now 22 states, 2 federal agencies and 75 municipalities in the United States that require commercial buildings be built to meet LEED standards or certification [source: Kamenetz].


Lots More Information

Related HowStuffWorks Articles


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  • Clemson University Home and Garden Information Center. "Conserving Water in Your Landscape." May 2006. April 17, 2009.http://www.clemson.edu/extension/hgic/plants/other/landscaping/hgic1724.html
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