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Energy Audits Get Hot Again

By Sonja Ryst After decades as a staple tool for making quick and often inexpensive fixes to home or business energy use, home energy audits are gaining popularity -- thanks to spiking energy costs as winter rolls in. One Midwest utility is reporting a doubling of the waiting time for an audit this year -- from four to six weeks to as much as 12 weeks -- and a Virginia-based energy consultant says his audit business has quadrupled.

Jon Sorensen, a 48-year-old spokesman for the Albany-based New York State Consumer Protection Board, just decided to invest in his first home energy audit. He uses natural gas to heat his 1839 farmhouse, which previous owners restored more than 15 years ago. When he saw "scary forecasts of energy prices," Sorensen figured it was worth paying $350 for advice from the Troy (N.Y.)-based consultant Enhanced Living.

SPENDING TO SAVE. Two of their experts came to his house in recent weeks and spent an afternoon testing it in various ways. They put a machine against his door that sucked air out of his house, so it could measure the amount that leaked back inside through the cracks. They looked at the insulation in his attic, which had settled, and suggested replacing it.

After they had performed all their tests, they advised Sorenson to spend about $8,000 in improvements that they said would eventually lead to energy savings he could pay off within years. He could use Enhanced Living to do the improvements but plans to shop around for price quotes from others as well.

"I can't recall the precise numbers, but it's well worth the investment," Sorenson says. "There's also my old bones that need to be kept warm and cozy."

OLD HOMES, NEW TECH. It's clear what's driving interest in audits. Even after a recent sell-off, Henry Hub natural gas spot prices have traded this week at around $11.18 per million British thermal units (BTUs), compared to $5.88 million for the week of January 7, 2005. Heating oil is now priced at around $1.59 per gallon, compared to $1.22 during the first week of 2005.

Putting that into consumer terms, the Energy Dept. is forecasting that the average household will spend $306, or 41%, more for natural gas this winter compared to last year. The agency also thinks households will likely spend $325, or 27%, more for heating oil this winter.

"People with older homes are getting them fixed," mainly due to improvements in consumer awareness, technology, and revisions to building codes, says Terry Logee, who works in Energy's Office of Building Technologies. The average U.S. household now consumes 101.3 million BTUs, compared to 106.4 million five years ago, according to estimates in Energy's Buildings Energy Data Book for August, 2005. In 1980 the average household consumed 124.8 million BTUs (see BW Online, 9/20/05, "This Cold House" and "Does Your Home Burn Money for Fuel?").

THE RIGHT TESTS. Some people are putting more effort into these improvements than others. On the cheaper end of the spectrum, a wide range of information is available on how to do a home energy audit yourself. Bruce Hahn, for example, will e-mail you a free checklist explaining where to look for the leaks in your house if you write him at

Hahn, the president of the American Homeowners Foundation -- a nonprofit in Arlington, Va., with only a couple people on staff -- says he has gotten so many requests that he recently had to work about 12 hours a day and also on the weekends just to keep up with fulfilling them. You can find similar information from the Energy Dept.

A do-it-yourself test can range from noticing the cold draft blowing in your attic to checking the insulation in your wall by probing it with a stick. But such methods can only go so far. To find out precisely how much your walls are insulated, you need to know how to use expensive equipment such as infrared scanners that can see and measure the temperature variations in your building.

SEALED TOO TIGHT. Lee O'Neal, the president of the Chantilly (Va.)-based energy consultancy Nspects, says the high-precision energy audits he provides for between $300 and $500 are key. If you do the audits yourself the wrong way, he says you can end up trapping carbon monoxide into your home and poisoning the occupants as a result.

O'Neal says he saw a house last week that the homeowner had already sealed up so tightly, the air inside felt as moist and humid as in summer. Instead of advising further sealing for the house, O'Neal told the homeowner to put in more ventilation. But he says most of the houses he audits end up reducing their energy consumption by 25% to 30% after they carry out his recommendations. He has seen a spike of 130 requests for home energy audits during the past month, compared to only around 30 during the same period of last year.

The amount of savings you're going to get in return for your investment in an energy audit depends on you and your home. If you want an educated guess on this question, you can use Energy's online Home Energy Saver tool.

GOVERNMENT HELP. The site will ask you to input details about your home, such as the number of refrigerators you keep in it. Once you've provided that information, it will estimate what an average home like yours spends on energy and how much less that might be if you updated its efficiency. For example, the average 50-year-old two-story house in New York City spends $2,267 a year on energy, compared to $1,451 for an efficient one.

Some lower-effort items can give you good bang for your buck. Some of Energy's home energy audit suggestions include:

Locating air leaks around windows, electrical outlets, and other spots. Reducing potential drafts can produce up to 30% in energy savings.

Checking the insulation in the ceiling and walls to make sure it meets required minimums. Adding more, particularly in the attic, can be relatively easy.

Inspecting heating systems annually to make sure they're operating at peak efficiency.

Replacing energy-intensive lightbulbs with more efficient fluorescent models.

Your upgrades might be subsidized, depending on where you live. For example, the Wisconsin state government will give local homeowners a $100 rebate if they have a home energy audit performed, which typically costs between $200 and $400 through a state program sponsored by the energy-efficiency initiative "Wisconsin Focus on Energy." The state offers additional incentives for those who implement their audit's recommendations, including a $150 rebate for installing certain energy-efficient furnaces.

LONGER WAITS. Starting Jan. 1 you can also get 10% of your cost or a maximum $500 federal tax credit for various home improvements, such as installing new insulation or windows, under the Energy Tax Incentives Act of 2005, which President Bush signed in August (see BW Online, 9/26/05, "Go Green and Save"). For more information on government incentives that promote renewable energy, see

In Montana, ratepayers will lay out $1 million this year to fund home energy audits sponsored by NorthWestern Energy (NWEC), or less than 1% of the Sioux Falls (S.D.)-based utility's total revenues in Montana. NorthWestern Energy says it has the budget to perform about 2,500 residential on-site audits each year, and it has had so much demand recently that it's already scheduling appointments three months ahead. Normally the wait is in the four- to six-week range at this time of year, according to a spokesman.

The Raleigh (N.C.)-based Progress Energy (PGN), which sponsors home energy audits for its customers in Florida, expects to receive between 36,000 and 37,000 requests for them this year. As of Oct. 31, Progress Energy already had 32,709 audits completed, compared to 30,126 at the end of October, 2004.

In other states, like Arizona and Nevada, most homeowners pay for energy audits out of their own pockets without any help from utility- or state-sponsored programs.

WASTED EFFORT. If you end up getting an audit, make sure you can trust the person giving it. Tempo Industries in Irvine, Calif., learned that the hard way. Its administrative services manager, Jule Hughes, got a phone call in 2003 from USRA, a utilities auditor. A representative from USRA said his Laguna Hills (Calif.) company would charge $1,499 to evaluate Tempo Industries' energy costs and make recommendations on improvements. If they didn't achieve 15% savings as a result, Tempo would get its money back.

Hughes figured that meant USRA might help her company save at least $3,000 a year on its energy bills, so she accepted. Tempo makes low-voltage lighting products and it had already done many energy-efficiency fixes on its own, such as using motion-sensor lights and computer-controlled air conditioning in its offices. USRA spent about a year evaluating Tempo's savings strategies before coming up with other ideas that would cost thousands of dollars to implement, such as upgrading all the motors in the production machinery.

Hughes says none of the ideas were practical, requiring take decades to recoup the initial investments involved. When she called USRA to ask for a refund, nobody answered her phone calls or voice-mail messages. Hughes finally complained this spring to the Better Business Bureau, which has many similar gripes on record from other USRA customers.

"Don't just trust the references they show you," Hughes says. "Do your own research." USRA did not respond to phone messages requesting comment for this story.

KEEP YOUR DOLLARS. You can also find a list of home energy auditors that have been certified by the Residential Energy Services Network, a San Diego-based nonprofit. The Better Business Bureau also maintains public records of complaints filed against companies.

With a good energy audit, you might just find some dollars that have been leaking away, this year more rapidly than ever.

Ryst is a reporter for BusinessWeek Online in New York

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