FOR NEW HOMES IN

MICHIGAN
2009 INTERNATIONAL ENERGY CONSERVATION CODE
One of the major barriers to energy code adoption across the country is the concern that new Mortgage Monthly Cumulative
codes will add to the purchase price and potential buyers will not be able to afford the homes Month
Increase Energy Savings Cost/Benefit
they want. In Michigan, upgrading homes to the 2009 International Energy Conservation
Code will actually reduce out-of-pocket expenses for homeowners – paying off their initial 1 $193.04 $22.83 $170.21
investment in a matter of months. 2 $4.17 $22.83 $151.55
For the average new home, BCAP estimates the costs of the new code will add a total of $965 3 $4.17 $22.83 $132.89
in construction costs—an increase of only 0.4%. When this amount is rolled into the average 4 $4.17 $22.83 $114.23
mortgage, real costs to homebuyers will mean a down payment increase of $193.04, and 5 $4.17 $22.83 $95.57
$4.17 extra on monthly mortgage bills.
6 $4.17 $22.83 $76.91
These added mortgage costs will be offset, however, by monthly energy savings of $22.83, 7 $4.17 $22.83 $58.25
helping homebuyers pay off their initial investment in only eleven months. After breaking
even in month eleven, the home will return buyers a profit of $19 per month—for a total 8 $4.17 $22.83 $39.59
return of $228 every year. This return on investment is graphed below and presented as a 9 $4.17 $22.83 $20.93
balance sheet at right. 10 $4.17 $22.83 $2.27
Energy Code Payback for Michigan Single Family Homes 11 $4.17 $22.83 $16.39 Break Even

$50 12 $4.17 $22.83 $35.05

$18 profit every month

Cumulative Benefit 13 $4.17 $22.83 $53.71
Monthly Benefit:   +$19
0 Profit after Year 1:  +$35 14 $4.17 $22.83 $72.37
15 $4.17 $22.83 $91.03
Monthly Energy
-$50 Savings: $23 16 $4.17 $22.83 $109.69
17 $4.17 $22.83 $128.35
Monthly Mortgage
-$100 Increase: $4
18 $4.17 $22.83 $147.01

-$150
Down Payment
This model assumes an average sale price of $267,451 for a
Increase: $193 2,400 square foot home. The mortgage is conservatively set at
-$200 30 years, with 20% down and the current average nationwide
interest rate of 5.05%. With a lower down payment—such as
10% down—consumers will break even on their investment
-$250 even sooner.
Month 1 2 3 4 5 6 7 8 9 10 11 12
 FOR NEW HOMES IN
MICHIGAN
2009 INTERNATIONAL ENERGY CONSERVATION CODE
Homes are the biggest investment we make—and everyone deserves a home that meets national minimum energy efficiency standards. While it’s true
that homeowners can always improve the efficiency of their homes, it is far more cost-effective to upgrade building components during construction,
putting in better windows or swapping out one grade of insulation for a better one. Here’s what buyers get with the 2009 IECC:

Lighting: $50

Payback Period
11 months

2-year Profit
2 $258.97
Duct Sealing and
Testing: $350

Annual Energy Reduction Insulation Upgrades

12-13% Climate Zone 5: $442
Climate Zone 6: $780
Climate Zone 7: $1,703

5-year Profit
5 $930.73
Climate Zone 5 Climate Zone 7
insulation insulation
r-value: 21 a 30 floor r-value: 21 a 38 floor

Climate Zone 6
insulation
r-value: 21 a 30 floor
r-value: 10/13a15/19 basement
For the full Incremental Cost Analysis study, please visit bcap-ocean.org