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How Big Investment Could Change the Landscape for the Better
Realtors® are experts on all things homeownership. One emerging trend that Realtors® would do well to pay close attention to is sustainability. Homeowners, and prospective homeowners, are increasingly interested in how “green features” affect a property—be it the value such features might add in view of an upcoming sale, improving the comfort of their home, and/or managing the long-term cost of ownership.

But for many agents, there’s a lack of clarity on the topic of sustainability in real estate. A recent report by the National Association of REALTORS® found confusion among real estate professionals about the impact of certain features on property value—especially on bigger ticket green features like newwindows, insulation, HVAC systems, and solar panels.

A recent report by the International Energy Agency, which tracks the global investment in energy, found that 2022 saw the biggest single-year investment in clean energy ever. Of the $2.8 trillion invested into energy overall, $1.7 trillion went to clean energy sources—with the vast majority of that going into renewables like solar, wind, and grid upgrades. The bottom line is that the ongoing investment into clean energy, including the Inflation Reduction Act—and tax incentives and rebates that will be available to homeowners—will help homeowners put money back in their pockets as they improve energy efficiency. A useful tool to help you calculate personalized incentives for making green upgrades to your home can be found at rewiringamerica.org.

Minnesota Invests in a Greener Future

Along with the nationwide effort to increase sustainability measures, there are reasons to be encouraged at a local level, too. The MN Legislature took significant steps during the 2023 Legislative Session to move us toward a clean energy economy, including:

• Major investments in green jobs and infrastructure
• Rebates for consumers who upgrade air source heat pumps and electrical panels
• Electric vehicle (EV) rebates totaling $2,500 for new vehicles and $600 for used EVs

Given those realities alone, the future of clean energy looks bright. But what about the present?

How Realtors® Can Educate Consumers

For a long time, many have equated sustainable features in homes with high costs. In the same NAR survey cited above, sixty percent of respondents said they believe eco-friendly

home improvements are only accessible to the wealthy. But the seismic investment into clean energy signals a positive sign for the future: green features in homes and businesses will become more accessible in the coming years. *For agents looking to grow their understanding of energy efficiency and sustainability in real estate, NAR’s GREEN designation is worth pursuing. The Minneapolis REALTORS® will be offering this class in October. Further, there are ways homeowners can increase the energy efficiency of their homes now. See the sidebar for a breakdown of what can be done for a range of budgets.

Is Going Green Worth It? 

While there certainly is an up-front cost to any project that makes one’s home more sustainable, all signs point to increased incentives for homeowners who head in this direction. In fact, the recently released REALTORS® and Sustainability Report, also conducted by NAR, found that energy-efficient home projects could save homeowners up to $2,500 per year on their energy bills. On top of that, energy-efficient homes saw an increase of anywhere from 1% to 10% of the dollar value compared to a non-energy-efficient home. For most home sales, even a small percentage like that equates to thousands of dollars.

Of course, for most Americans today, the numbers must make sense for us to move forward with any project, especially when it comes to our homes. But in the realm of sustainability, there’s a reason that transcends mere dollars and cents—namely, what kind of world we’ll shape for our children, grandchildren, and great-grandchildren. Will we make it easier or harder for future generations to achieve the cornerstone of the American dream?

What we do in and with our homes today will, to some degree, determine the answer to that question.    

Energy Efficient Upgrades 

Budget: Under $500 

1. Energy-efficient lighting 
   Estimated cost: $240.56 
   Potential annual savings: $200 (on yearly energy bills) 

1. Smart thermostat 
   Estimated cost: $239.53 
   Potential annual savings: $100 

Budget: $1,000 to $5,000 

1. Install EV charger 
   Estimated cost: $2,230 (not including vehicle) 
   Potential annual savings: up to $1,000 through a 30% tax credit 

1. Double-pane windows 
   Estimated cost: $1,569 (for 5-8 windows) 
   Potential savings: $600 with a 30% tax credit and $308 on yearly energy expenses 

Budget: $5,000 to $10,000 

1. Heat pump water heaters (two to three times more efficient than traditional systems) 
   Estimated cost: $5,280 
   Potential savings: $1,750 in upfront costs (depending on household income), up to $2,000 through a 30% tax credit and $120 in yearly energy expenses 

1. New insulation 
   Estimated cost: $9,469 
   Potential savings: $1,600 (for income-eligible households) in upfront costs, a 30% tax credit for up to $1,200 per year and about $400 in yearly energy expenses 

1. Rooftop solar panels 
   Estimated cost: $9,640 
   Potential savings: 30% on upfront costs through government incentives (an average of $2,892) and $100 in yearly energy expenses—even after financing the upfront cost of the panels 

Budget: $10,000 to $20,000 

1. Heat pumps (three to five times more energy efficient than traditional heating systems) 
   Estimated cost: $16,588 
   Potential savings: up to $8,000 (depending on household income) in upfront costs through government incentives, up to $2,000 in a 30% tax credit and $330 in yearly energy expenses 

*Households who heat their home with electric resistance, fuel oil or propane can saveover $1,000 on their yearly energy bills