Green home remodel

Do Green Renovations Increase the Value of Your Property?

The thought of living through a green home renovation can seem daunting to many homeowners. Is it worth it? This raises questions like, “Will we enjoy the energy savings, functionality and home aesthetics more after the renovation upgrades are completed?” According to the National Association of REALTORS® 2022 Remodeling Impact Report, 84% of the homeowners experienced a greater desire to be home after completing their renovation project, and 68% expressed an increased sense of enjoyment when they were at home. 79% felt a major sense of accomplishment when thinking back on the project. So, based on those 1,182 homeowners, completing home renovations does increase the value of the property, at least to the homeowners.

When it comes to green home upgrades, key considerations are achieving energy efficiency, the resulting savings on energy bills you’ll enjoy, and the reduction in carbon emissions. You will have the satisfaction of knowing you’ve chosen to be part of the solution and not the problem. A more energy-efficient, better insulated and sealed home has lower operating costs, and there can also represent a reduction in future home maintenance costs.

Our focus in this article is exploring green home upgrades and the potential return on investment that comes from a higher property value when reselling your home one day.

What is green remodelling?

Green remodelling covers a wide range of upgrade principles that aim to minimize the environmental impact of your home renovation.

Energy efficiency upgrades involve enhancing the insulation, sealing the building envelope, installing high-performance windows, and upgrading to Energy Star certified appliances and LED lighting. Reducing your home’s energy demand translates to lower monthly utility bills, providing long-term cost savings.

Renewable energy retrofits typically involve integrating solar panels, wind turbines, or geothermal heating systems to generate renewable energy, reducing your reliance on traditional energy sources like BC Hydro or Fortis BC. Smart controls can interact with the BC Hydro net metering program. Your home will generate its electricity, in a self-sufficient way, but the grid will be there during periods when there isn’t sufficient sunlight or wind.

Use of sustainable eco-friendly building materials such as renewable resources that grow rapidly and are sustainably harvested, while requiring minimal processing, helps builders achieve the goal of improved sustainability, by reducing the environmental impact of the building process. Opting for local BC lumber instead of concrete, bamboo flooring, reclaimed wood, recycled glass countertops, and low-VOC paints are just some examples of eco-friendly building materials.

Water conservation strategies such as implementing low-flow fixtures, a rainwater harvesting system, and drought-resistant landscaping can minimize your household’s water usage. Conserving water helps preserve natural water sources, protects your local ecosystem, and reduces the strain on the municipal water supply.

Green renovation upgrades with the best ROI

Insulation and sealing the building envelope: This is a big project, and it’s costly. Upgrades will typically include adding insulation to the attic floor or roof rafters, re-siding with a thick layer of continuous insulation applied to the exterior, and Insulating basement walls or crawlspace perimeters with rigid foam boards.

According to the NAR 2022 Remodeling Impact Report, upgrading the insulation comes in at the top, right behind flooring upgrades, with 100% cost recovery, and a 10 (out of 10) joy score. Only 3% of the Realtors recommended upgrading the insulation before selling. More home buyers are becoming aware of the value of superior insulation and sealing the envelope, but for now, the real property value increase with this green renovation will be a significant reduction in energy costs, and the improvement to your family’s comfort.

Window replacement: With high-efficiency double- or triple-glazed units, new windows complete the continuous insulation upgrade of your home’s building envelope. Replacing old windows with energy-efficient windows with multiple panes, low-emissivity coatings, and insulating argon gas between panes will significantly reduce heat transfer, lowering your home’s heating and cooling energy demands.

By eliminating cold spots, drafts and temperature fluctuations, new high-efficiency windows create a more consistent and comfortable indoor environment for your family year-round. According to the NAR 2022 Remodeling Impact Report, vinyl frame windows provided a cost recovery of 67% and wood frame windows 63%, with a joy score of 9.6 (out of 10). Only 4% of the Realtors recommended upgrading a home’s windows before selling. Like insulation, the real property value increase with window replacement will be a significant reduction in energy costs, and the improvement to your family’s comfort.

Electric heat pump upgrade: Heat pumps are significantly more energy-efficient than older heating systems like furnaces or baseboard heaters. They can provide 3-4 times more heat energy than the electricity they consume, and they can both heat and cool your home, eliminating the need for separate heating and cooling systems. Electric heat pumps don’t burn fuel, so they won’t produce combustion byproducts like carbon monoxide, improving the indoor air quality of your home, when compared to gas furnaces.

According to the Better Homes, Cooler Planet study, published by the World Wildlife Fund and ScottishPower, heat pumps increase a home’s value by 1.7 to 3%. The Canadian Climate Institute’s Heat Pumps Pay Off analysis shows that pumps are the lowest-cost option for most households, with a savings of 10 to 20 percent when switching from gas, and 65 percent when switching over from electric baseboard heaters. Heat pumps also emit between 20 and 30 percent less carbon emissions than gas furnaces.

Renewable energy source: Adding a green renewable energy source such as solar panels or a wind turbine system will help the environment, it will save you a substantial amount on your energy bills, and it can potentially increase the value of your home. Various factors, such as the location of your home, demonstrable energy saving and the appeal of solar energy to the potential buyers in your area will influence the extent of the price bump where you live.

According to a study of real estate comps across the United States by Zillow, homes with solar-energy systems sold for 4.1% more on average than comparable homes without solar power.

Renovating the kitchen and bathrooms: Remodelling an entire room like a kitchen or bathroom may not come immediately to mind as sustainable or energy-efficient upgrades, but they can be very important green retrofits. Low-flow WaterSense faucets and showerheads, and low-flush toilets, can significantly reduce water consumption during everyday use. Energy Star appliances in the kitchen and LED lighting are highly energy-efficient and will cut your energy costs. Using low-VOC or zero-VOC paints, stains, and sealants can improve the indoor air quality.

According to the 2024 Cost vs Value Report, minor kitchen remodels come in 5th place, with 96.1% of the cost recouped at the time of sale. Bathroom remodels ranked 9th, with 73.7% of the cost recouped. According to the NAR 2022 Remodeling Impact Report, 13% of Realtors recommend a complete kitchen renovation, and 26% recommend a bathroom renovation before selling.

If you are thinking of reselling within the next year or two, what is often recommended is ‘smart’ targeted renovations to the kitchen and bathroom. Kitchen refreshes can have a high return on investment, with minor upgrades like new countertops, backsplashes, cabinet refacing, fresh paint, and updated appliances. Bathroom refreshes can create a modern appeal with new fixtures, vanity, tile, and lighting. Buyers place a high value on updated bathrooms, particularly the master suite.

Flooring: Sustainable flooring materials such as BC broadleaved hardwood species: oak, bigleaf maple, red alder, white birch or teak, and to a lesser degree softwood species: spruce, pine or fir, are used in West Coast flooring. Other sustainable options include recycled materials like reclaimed wood, bamboo, cork, and linoleum, that are free from volatile organic compounds (VOCs) and toxic chemicals, creating a healthier indoor environment compared to traditional materials like carpets or vinyl.

Based on the NAR 2022 Remodeling Impact Report, refinishing hardwood flooring and installing new wood flooring take the top two positions when it comes to cost recovery. Both will recover more than 100% of the cost at resale, with hardwood refinishing coming in at 147% and installing new wood flooring at 118%. Both projects have a joy score of 10 (out of 10).

The takeaway

Green remodelling offers the opportunity to reduce your environmental footprint. For upgrades like installing superior insulation and sealing the building envelope, putting in high-efficiency windows, upgrading to an electric heat pump and adding a renewable energy source, you can expect substantial savings on your energy bills.

Except for wood flooring, which provided an immediate return on investment, other green renovations provide anywhere from 63% to 100% cost recovery. In other words, a portion of the upgrade’s increase in value comes in the form of the energy savings, greater comfort, cleaner air, pleasing aesthetics, and reduced home maintenance costs you will enjoy before you sell.

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