In 1992, a new building code took effect in the state of Oregon, which was projected to reduce heating costs by 30 to 40 percent. Increasing energy efficiency requirements caused many builders to worry that costs would climb more than the market could bear. A study performed by the Oregon State University Extension Energy Program should put those fears to rest.

In early 1993, after the code had been in effect for over a year, OSU researchers collected information from 146 material suppliers in 40 communities around the state. They compared the 1988 code to the 1992 code. (See the table for costs by component.)

The study estimated the energy package for two house plan prototypes. For the 1344 sq. ft. house, the study projected that meeting the new code requirements would cost $1009 more than the old one. The larger house was 1910 sq. ft. and would cost $1650 more.

Cost Effectiveness

The working group that recommended changes to the Oregon code estimated the new code would add about $1,400 to the cost of the 1344 sq. ft. house. When OSU compiled their estimates about two years later the cost figure had dropped to $1,009--about 25 percent lower. (See Window Cost for more details.) The OSU study didn't address savings. However, the working group predicted savings around $142 per year (at 60¢ per Therm) for a gas heated home and $205 (at 5¢ per kiloWatt hour) for a home with zonal electric heat.

In the working group's financial analysis, homes with electric heat showed positive cash flow immediately. In other words, energy savings exceeded the extra monthly cost to finance the energy saving measures. The cash flow for the owners of gas-heated homes turned positive after seven years. Given the lower costs revealed by the OSU study the financial benefits should be substantially greater.

Cost Variation

Previous cost studies have been attempted with varying success. Part of the problem has been wide variation in costs. The price suppliers charge may vary considerably depending on many factors, such as geographic location, sales volume, market forces and their business relationship with the buyer. The OSU study found several examples of wide price variation.

 
• Prices for roof trusses varied by as much as 400 percent in different cities.
• The price difference between a 2x4 stud and a 2x6 stud was as low as $1.08 and as high as $3.23.
• The difference between R-4 duct insulation and R-10 duct insulation was as little as 1¢ per sq. ft. of floor area and as high as 40¢ per sq. ft.

While these are extreme examples, they suggest that shopping around can make a big difference.

Deeper Insulation and Floor Framing

In many cases, it's not the insulation itself that adds cost, but creating a cavity to hold it. Floors over unheated spaces are one example. The OSU study details 10 different floor framing options, ranging from R-19 to R-38. The lowest cost was for an R-19 floor at $1.72/sq. ft. The highest cost was an R-38 floor at $2.61/sq. ft. However, another R-38 option was only $2.17/sq. ft. This option used high density R-38 batts (only 10 inches thick) and wood I-beams. All four options that used high-density batts cost less than furring down framing to accept a standard density R-38.

Cost Savings

Although most energy-saving features add to up front costs, two features can actually reduce costs.

Insulated entry doors can cost significantly less than wood doors. In this study, the metal-skin, insulated panel door costs 47 percent less than a wood panel door. The insulated flush door was only 5 percent cheaper than its wood counterpart.

Framing might seem like a surprising place to find savings, but energy-efficient wall framing techniques can cut labor and material costs. Changing from 2x4 to 2x6 wall framing increased material costs by 31¢ per sq. ft. However, applying "advanced" framing techniques trims the additional cost to only 15¢ per sq ft. (Advanced framing includes spacing studs 24 inches on-center and eliminating unnecessary trimmers and corner studs.) Since these costs were collected in early 1993--when the lumber market was at an all-time high--these figures may be somewhat high. However, the difference between standard and advanced framing should be consistent.

The study didn't attempt to estimate labor costs for wall construction. However, other research--and common sense--suggests that labor costs would be lower for advanced framed walls, too.

Codes Changing Around America

The 1992 Energy Policy Act requires states to consider adopting the 1992 Model Energy Code published by the Council of American Building Officials. So far 19 states have energy codes that meet or exceed MEC. The energy provisions of MEC are roughly equivalent to the Oregon energy code in the last half of the 1980s, before this latest revision.

The Oregon study could help answer the inevitable questions about cost effectiveness. The complete report is available for $7.50 from the Oregon State University Energy Extension Program. Call them at 503-737-5029.

A program operated by the Alliance to Save Energy (ASE) provides technical and policy help to states. For more information about the Building Code Assistance Project call ASE at 202-857-0666. At the time it was adopted, the stronger energy code was shown to be cost-effective for consumers. The OSU study indicates that costs are lower than predicted, making the code an even better deal. Improvements in technology and new building materials should help that trend continue.

Window Costs

The OSU study's estimate of how the new Oregon code affected construction costs was about 25 percent lower than an earlier estimate made by the working group that formulated the code. According to Gary Curtis with the Oregon Department of Energy, a major reason for the shift was window costs.

The window industry was already moving toward more efficient products. He credits two forces for creating greater demand for more efficient windows: efficiency programs operated by electric utilities, such as Super Good Cents, and later the new state code itself.

When the earlier estimate was made, low-e glazing was an expensive option. Later, the vinyl-framed, low-e, argon-filled window was little, if any, extra cost. Market forces had a major effect on the price of high performance windows. Different assumptions were made in the two studies to reflect the changing marketplace.

The working group originally predicted that window costs would climb by $3.48 per square foot of window to meet the new code. That cost assumed that the "current" window had an aluminum frame with clear double glazing. The "new code" window cost was a weighted average of all window styles sold in the state at the time, including those with wood, vinyl and aluminum frames.

The OSU study compared aluminum to vinyl-framed, argon-filled, low-e windows with a cost difference of only $1.91 per square foot of window.

Additional Cost Estimates for
Oregon State Energy Code

($/sq. ft. floor area)

Components	           1988 Code	          1992 Code
Flat Ceilings.............$0.49...R-38.........$0.49...R-38
Vaulted Ceilings...........0.26...R-19..........0.42...R-30
Crawlspace.................0.26...R-19..........0.36...R-25
Above Grade Wall(1)........0.26...R-19..........0.36...R-21
Below Grade Wall...........0.26...R-11..........0.46...R-21
Slab.......................0.35...R-5...........1.02...R-15
Duct Insulation............0.27...R-4...........0.42...R-10
Windows(2).................7.69...Cl 60(4)......9.15...Cl 40(5)
Doors(3)..................11.76...wood.........11.75...wood

Notes
1. Doesn't include labor.
2. Cost is $/ sq ft. of window area
3. Cost is $/ sq ft. of door area
4. Class 60 - equivalent to double glazed, alum. frame with thermal break
5. Class 60 - equivalent to double glazed, vinyl frame, argon fill, low-e