The GHB Interview: John Hensley, Board President, RESNET

Board President shares importance of certifying green homes

Green Home Builder: Tell me about RESNET and its philosophy. When was it established and what is its purpose?

John Hensley: In April 1995, the Mortgage Bankers of America, National Association of State Energy Officials and Energy Rated Homes of America founded the Residential Energy Services Network (RESNET) to develop a national market for home energy rating systems and energy efficient mortgages. Today, RESNET is a recognized national standards-making body for building energy efficiency rating and certification systems in the United States. RESNET created and maintains the HERS Index to allow for easy comparison of energy performance of homes and the HERSH2O® home water efficiency rating to compare indoor and outdoor water usage of homes. RESNET’s mission is to make the energy use of all homes transparent, thereby driving residential sector energy use toward net zero.

GHB: What is the HERS Index?

JH: The HERS® Index Score is like a home’s MPG label, one number to tell you how energy efficient a home is. The Home Energy Rating System (HERS) Index is the industry standard by which a home’s energy efficiency is measured and labeled. It’s also the nationally recognized system for inspecting and calculating a home’s energy performance. HERSH2O, built off of RESNET’s HERS Index, is a system for rating whole-house water efficiency that includes both indoor and outdoor uses. With the average family spending more than $1,000 annually on water costs, HERSH2O provides a simple, easy to compare rating on a scale from 0-100+; where lower numbers mean less water use. The HERSH2O Index was developed as part of a partnership between RESNET and the International Code Council (ICC), Natural Resource Defense Council and the EPA WaterSense Program.

GHB: Why is it important for homes to be rated?

JH: Homes with low HERS Index scores are more energy efficient than standard homes. This translates into increased home comfort, lower utility costs and a more environmentally friendly home. Many homebuyers neglect to look at how much a home will cost to run when shopping around. However, the truth is that buying a home means more than just making the monthly mortgage payments. Energy costs play a significant role in determining the affordability of a home. HERS rated homes tell homebuyers at a glance, how energy efficient those homes are. And that means they can make informed decisions when choosing a home. And when selling a home, studies have found that a low HERS Index Score on the home can command a higher resale price. 

Similarly, as rapidly increasing water prices across the U.S. will drive consumer demand for more water efficient homes, the HERSH2O rating offers a simple, easy-to-understand system for prospective homebuyers, Realtors, appraisers, and utilities to compare the water efficiency performance of a home.

Builders who build with HERS Index Scores can use these scores to meet the growing market demand by consumers of energy efficient homes, offer the overall energy performance of their homes in an easy-to-understand way, demonstrate lower utility costs, and promote that their homes are third party inspected.

GHB: How do you become a certified rater or builder?

JH: HERS Raters undergo rigorous training, testing, assessment, professional development, and adhere to stringent quality assurance standards. HERS Raters are trained and certified to inspect, test, and evaluate a home’s energy features, prepare a home energy rating and make recommendations for improvements that will save the home buyer energy and money. We outline the complete process at https://www.resnet.us/raters/hers-raters/become-rater/

RESNET Energy Smart Builders are committed to increasing the energy performance of the homes they build. These energy efficient homes are more affordable to maintain, more comfortable, and have a higher value compared to regular homes. The efforts of these leading builders benefit consumers, the environment, and the economy. To be designated by RESNET as an Energy Smart Builder, a builder enters into a Memorandum of Understanding with RESNET to have all their homes energy rated and to market the homes’ HERS Index. More information is at https://www.resnet.us/builders/join/

GHB: With sustainability becoming mainstream, what kinds of trends do you see becoming standard in new homes?

JH: Utility residential energy programs shifting to time of use and carbon savings. The instances when energy is used is becoming more important to utilities on how much is saved. This trend will give rise to integrated technologies.

With skyrocketing water costs and increasing droughts, home water efficiency will become important to consumers and water districts. Focus on growing whole house water efficiency in homes.

Third party verification of performance-based energy codes.

GHB: Tell me about any upcoming projects RESNET is excited for?

JH: Water efficiency ratings – RESNET’s home water efficiency rating system, HERSH20 allows HERS Raters to contribute to addressing the water challenges in their communities while at the same time providing new business opportunities. The program also projects another matrix for consumers considering the sustainability of homes.

Energy Code Compliance – RESNET is partnering with the International Code Council on making HERS Raters the go-to-source for the verification of energy codes.

Carbon & Time of Use Rating Index – RESNET is developing a new Home Carbon Rating Index that is based upon its ANSI standard developed in cooperation with the Natural Resources Defense Council, the Consortium for Energy Efficiency, the California Energy Commission, and the National Renewable Energy Laboratory. This will allow homes to be rated on their carbon performance and recognized integrated technologies that shift electrical load.

ESG Reporting & Green Mortgages – Environmental, Social and Governance (ESG) is now playing a more prominent role in how companies around the globe operate, and how investors invest. Already, builders and mortgage finance companies have submitted ESG reports for homebuilding HERS Index Scores are counted as credit for ESG. In addition, there are a number of financial institutions such as Freddie Mac that are offering green mortgages through ESG based bonds. This is an exciting opportunity for high energy performance home builders and the HERS industry.

Affordable High Energy Performance Homes – Affordable housing is a combination of affordable construction and operating costs. It is possible to have both. RESNET has entered into a collaboration with the Habitat for Humanity International to build affordable and sustainable homes. Habitat affiliates are increasingly having their homes HERS rated. In 2021 the Habitat affiliate in Cape Code, Massachusetts built a home with a -21 HERS Index Rating Score. This means that the home is calculated to produce 21% more energy than it consumes.

Appraisal Recognition of Value of HERS Rated Homes – RESNET is collaborating with the Appraisal Institute on educating appraisers on how to value green homes through the HERS Index. Through this collaboration, an Appraisal Portal has been launched that allows real estate appraisers to access the RESNET National Registry in real time to develop market data on homes with HERS Ratings.

Green Mortgages – Through an analysis of the performance of mortgages that were HERS rated, Freddie Mac found that homes that were HERS Rated had a higher mortgage performance than homes that were not HERS rated. The analysis found that the improved loan performance increased as the HERS Index Score got better. RESNET has entered into a collaboration with Freddie Mac to have the secondary mortgage market have access to the RESNET National Registry to track homes whose mortgages acquire HERS Ratings to judge their loan performance. This has already led to a green bond issued by Freddie Mac in which they offered improved green mortgages based upon the home’s HERS Rating Index Score.

GHB: What are some goals you have for 2022?

JH: As part of the development of its 2022 budget, RESNET underwent a strategic planning process.  The effort began with RESNET staff developing an analysis of the opportunities and threats that the HERS industry could face in 2022. Based upon that analysis, the RESNET Board of Directors adopted a set of goals for the year. The most important goals adopted are:

  • Lead the path to net zero.
  • Maintain and enhance credibility of RESNET’s Ratings, RESNET’s energy performance, energy code compliance, water efficiency, and carbon reduction activities through comprehensive quality assurance oversight.
  • Enhance RESNET and HERS Raters recognition as the Gold standard for testing, measuring and labeling home performance.
  • Grow business development opportunities for HERS Raters and the rating industry.
  • Enhance existing and build new collaborations with allied groups leading to better building performance and reduced carbon emissions.

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