Getting the most efficiency for the least cost requires careful attention throughout the design and construction process. Most energy-efficient homes have dozens of little improvements that individually add little to construction costs, yet together yield big savings.

Many energy features offer additional benefits such as increased comfort, reduced noise, greater fire safety, and improved building durability. Energy-efficient homes also have less condensation, which protects framing, windows, and finish materials. Better control of moisture and temperature means less movement of materials, which reduces floor squeaks and drywall cracks.

While some energy features add to construction costs, others can reduce costs. For example, increasing insulation and sealing air leaks reduce heating and cooling needs, allowing the use of smaller equipment and ductwork. The savings on the mechanical systems can pay for the increased cost of insulation and air sealing. Energy-efficient framing techniques can reduce lumber costs over 15 percent and prevent mold growth in outside walls and ceilings.

What Makes A Home Energy Efficient?

The following improvements help to make a home truly affordable, healthy, durable, and comfortable.

  • Proper design and installation of HVAC
    Poor design and installation of HVAC equipment commonly increases energy costs 10 to 30 percent in affordable housing. Proper sizing, design, and installation are usually the top priorities for cutting energy bills.

    1. Equipment size
    Equipment that is too big costs more to buy and operate, and results in less comfort. To size equipment properly requires exact calculations that consider insulation levels, window type and orientation, and air-sealing measures. Do not use rules of thumb that estimate so much heating or cooling per square foot of living area.

    2. Equipment efficiency and energy source
    The professional who calculates the size of the HVAC equipment should be able to determine estimated operating costs for various equipment efficiencies and energy sources. It is also important to consider the cost of energy sources when selecting equipment. Saving a few dollars on equipment is no bargain if families pay hundreds more due to a wrong choice. Look for the Energy Guide label, detailing estimated energy consumption and annual operating costs.

    3. Ventilation
    Today's homes need controlled ventilation systems. For most affordable home designs, simple systems can be economical to install and operate. In temperate climates, spot ventilation provided by higher-quality bath and kitchen fans vented directly to the outside may be adequate. In more severe climates, heat recovery ventilation and other techniques may be more appropriate.

    4. Ductwork
    Improving the efficiency of ductwork is the single most important energy measure for most affordable homes. Poor ductwork can waste hundreds of dollars each year and cause serious health and safety problems. It is best to locate ducts inside the living area - not in attics or crawl spaces. Do not use building cavities, such as closet returns, as part of the duct system.

    Make sure all joints in the ductwork are sealed permanently with mastic; duct tape and insulation do not provide an effective seal. After ducts are sealed, ensure that they have adequate insulation.

    To improve energy efficiency throughout the house: (1) Ventilate attic; (2) Install adequate insulation with no gaps or compressed areas; (3) Specify efficient windows; consider window orientation; (4) Seal all penetrations; (5) Locate ducts inside conditioned space; if not possible, ensure ducts are sealed with mastic and insulated; (6) Properly size heating and cooling equipment; choose efficient models; (7) Provide controlled ventilation; (8) Install efficient water heating; (9) Specify efficient lighting for fixtures used more than four hours daily; and (10) Choose efficient appliances.
  • Reduce air leakage
    Excess air leakage in homes can increase heating and cooling bills by 30 percent. Although windows, doors, and outside walls contribute to air leakage, the biggest holes are usually hidden from view and connect the house to the attic, crawl space, or basement. Reducing air leakage typically costs less than $200 for the average home.

  • Proper installation of insulation
    Gaps and compressed areas of insulation can cut the energy-saving potential of insulation by over 25 percent. Poor installation also leads to condensation and comfort problems. The Model Energy Code sets minimum requirements for insulation levels, but it is often cost-effective to exceed these levels.

  • Water conservation
    A family of four can spend more for hot water than heating or cooling. Consider the cost of various fuels for heating water as well as the efficiency of the water heater, which is often addressed on the label of the water heater. Simple conservation measures, such as low-flow showerheads, tank insulation jackets, and convection traps in hot and cold water lines, pay back quickly. Replacing inefficient plumbing fixtures in older homes can save families hundreds of dollars.

  • Efficient windows
    While energy-efficient windows cost more than standard models, they can cut energy bills significantly and reduce heating or cooling needs enough to permit smaller and cheaper HVAC equipment and ductwork. They greatly improve comfort by increasing surface temperatures and cutting drafts. They also reduce condensation, protecting building materials and reducing mold growth. Look for the Energy Star® label when choosing windows.

    Window orientation greatly affects energy use - as much as 25 percent for some designs. Major glass areas should face south for maximum winter heating. Avoid unshaded glass on east and west sides to reduce summer overheating. Use solar shade screens, roof overhangs, awnings, and trees and other landscaping to provide shade.

  • Efficient lighting
    Energy-efficient lighting saves on electric bills, helps keep the home cooler by reducing waste heat, and lasts longer. Specify compact or tubular fluorescents for interior fixtures that will be on for four hours or more each day - usually kitchens, hallways, and some living areas. Their extra cost is repaid in energy savings.

    Exterior lighting can cost hundreds of dollars a year to operate if it is not energy efficient. Install only compact fluorescent or high-pressure sodium fixtures for security lighting, and consider motion sensors or photo cells that operate lights automatically.

  • Efficient appliances
    Appliance energy use is usually greatest for refrigerators, clothes washers and dryers, and dishwashers. The true cost of an appliance is the purchase price plus the cost for energy and water for operation. A cheap, inefficient appliance will waste money for years to come. Federal law requires that most appliances have Energy Guide tags that compare estimated operating costs between energy-efficient and standard models. Look for the Energy Star label when choosing appliances.

    Energy Efficiency Improves Home Affordability

    Energy improvements help make a building that is more durable and reduce the need for expensive maintenance. Money saved on energy bills can be used by homeowners to better budget for any maintenance and repairs that must be done. Energy efficiency is a great investment for homeowners. When added to a mortgage, energy improvements usually cost less than the savings they offer on utility bills.

    Excerpted from "Energy Efficiency Pays" technology fact sheet published by the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy. For more information, visit

    Publication date: 11/01/2004