RESNET Proposes Amendment on the Calculation of the Cost Effectiveness of Energy Efficiency Improvements – Public Review and Comment Process Open Through July 12, 2011

June 9th, 2011 - Posted by RESNET under Hot News

The RESNET Technical Committee has proposed an amendment to RESNET standards to set new guidelines for the calculation of the cost effectiveness of energy efficiency improvements to a home.

Fannie Mae has recently changed its Energy Improvement Mortgage (EIM) requirements to include a provision that the energy improvements to the home must be cost effective as measured by their Net Present Value (NPV), with positive values considered cost effective and negative values considered not cost effective. In other words, the present value of the energy cost savings must exceed the present value of the improvement costs. However, Fannie Mae has not provided standards or guidance for the calculation of NPV.  Section 303.3.3 of the RESNET Standards addresses the calculation of a present value factor for the purposes of completing the previous requirements of Fannie Mae EEMs and EIMs.  However, this calculation is insufficient for calculating the new Fannie Mae requirement for NPV.

Furthermore, at their 2008 meeting, the member nations of the G8, signed on to a set of building energy policies that includes a requirement that building energy standards be set based on the 30-year total (life cycle) costs of building energy improvements. RESNET has been collaborating wherever possible with the European Community on such policies and this proposed change to Section 303.3.3 of the RESNET Standards is viewed as an opportunity to establish national standards for calculating the economic cost effectiveness of building energy improvements, which can be used by any interested party or building energy improvement program as a standardized method.

For example, by state regulation, Florida has implemented a rule within the Florida Administrative Code (FAC) specifying how cost effectiveness tests are to be performed with respect to building energy code requirements (see FAC Rule 9-B13.0071, attached). This proposal bases the large part of its specifications on this Florida Administrative Rule.

It is in the best interest of RESNET and the nation as a whole to establish a set of standard procedures that can be uniformly used for the calculation of economic parameters that are used in the determination of the cost effectiveness of building improvements.

The amendment is undergoing an ANSI compliant public review and comment process.  Interested parties are encouraged to comment on the proposed amendment.  Public comments on the proposed amendment will be accepted until July 12, 2011. To download the proposed amendment and submit your comments, click on Proposed Amendment on Calculation of Cost Effectiveness

RESNET will only consider comments that are posted on the online public comment form.

Comments are posted real time and you will be able to review comments that were submitted.

After the comment period, the RESNET Technical Committee will consider and document each of the comments submitted and make appropriate changes. The revised proposed amendments then will be submitted to the RESNET Standards Committee who will review the public comment process then recommend to the RESNET Board for adoption.

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