From the outset, energy efficiency has been the cornerstone of our sustainability focus for one simple reason: it is what our homebuyers care about most. Energy efficiency transforms sustainability into a tangible benefit for their monthly budgets. It is a key competitive advantage for us against other typical new homes as well as our biggest competition: resale homes.
We feature our proprietary EPG® (Energy Performance Guide®) for every home design we offer company wide, clearly showing how our homes’ energy efficiency measure up against both typical new and resale homes, as well as estimated utility costs that are updated annually to reflect utility rate changes. In addition, after construction is complete, the energy performance of every one of our homes is independently verified by a third-party energy rater. This exceeds the testing required by the ENERGY STAR® program’s guidelines.
As a major national builder delivering thousands of homes a year, we have the ability to make a meaningful difference when we take on a company-wide commitment to increased energy efficiency. In 2008, we made an industry-first commitment to build 100% of our homes to the ENERGY STAR standard, and we remain only one of three national builders to do so. As EPA has evolved ENERGY STAR by adding more rigor and continually raising the bar with each new release, we have continued to meet the challenge of providing our homebuyers with this increasing level of energy efficiency. In addition, we verify the as-built energy performance of our homes by testing every ENERGY STAR home we build at the end of construction, beyond the minimum sampling that EPA requires. We are the clear industry leader, building more ENERGY STAR certified new homes in recent years, including 2017, than any other homebuilder. Our consistent commitment over more than a decade has delivered a meaningful impact.
In 2017, we continued to make progress on our energy efficiency goals, including:
Achieving an average national HERS energy performance score of 57, down from 58 in 2016. For comparison, even among the highly energy-efficient new homes that choose to be HERS rated (just 22% of new homes), the average HERS score in 2017 was 62.
By the end of 2018, we expect to achieve an average national HERS energy performance score of 55, down from 85 in 2007, a goal we set for ourselves in 2014.
Expanding the use of Huber Engineered Woods’ Zip System® sheeting and tape. We are an early adopter of this advanced building product that offers greater protection from water intrusion and greater airtightness than traditional products, which in turn increases efficiency by keeping the unconditioned air outside and retaining more comfortable temperatures inside. We are now using the Zip System at KB Home communities in Florida and Colorado.
Transitioning to 100% LED lights that are ENERGY STAR certified in the indoor living areas of the homes we build. LED lights that have earned the ENERGY STAR label deliver high performance while using less energy and lasting years longer.
ENERGY STAR is a rigorous, evolving standard with increasing requirements with each major version release. Over the years, we have continuously improved our processes and products to meet this challenge. Getting to this increased level of energy performance without sacrificing affordability for our homebuyers is a creative, iterative process, but it yields tangible results. In 2017, after upgrading to the new ENERGY STAR Version 3.1 across our Las Vegas–area communities, we significantly lowered the average as-built HERS score of our Las Vegas homes to 54. One of our popular Las Vegas home designs demonstrates the immediate impact of this transition.
Its HERS score decreased from 64 in 2016 to 54 in 2017, resulting in an annual estimated utility savings of over $220 per year, $1,848 less than the utilities of a typical resale home of comparable size.
KB Home first offered solar photovoltaic options in 2005. To date, we have built 6,085 solar homes—1,041 of them in 2017—for a cumulative 14 megawatts installed. These homes produced 23 million kilowatt hours of electrical power over an annual period, removing 35 million pounds of CO2 and saving homeowners $4.7 million each year.
To date, the majority of our solar power systems have been installed in California, and to a lesser extent, Arizona, where a combination of early adopter demographics and weather conditions have made them attractive to homebuyers. California has seen a strong push from lawmakers to require solar to be included on every new home, and within the next few years, will likely be the first state in the nation to do so.
To be prepared for that, in recent years, we have taken several steps to develop the operational expertise to roll out this important technology on a wider scale as a competitive advantage. For example, we added a leasing option to the traditional mortgage financing of solar PV systems. This helps homebuyers focus their borrowing capacity on the home purchase, while also providing them with a source of renewable energy that can reduce their overall spend on electricity and their carbon footprint. We are also exploring alternatives to the way we purchase these systems. Historically, we have relied on “turnkey” solutions from leading suppliers. In 2017, we undertook a significant exercise to explore opportunities to disaggregate our solar supply chain in order to reduce costs. We conducted a pilot program in our San Diego market and were able to reduce our cost per watt by more than 30%. We are looking into opportunities to implement this approach on a wider scale.
We were looking for the house we will spend the rest of our lives in, so it had to be just right. KB Home let us customize to get everything we wanted. Single-story, double-oven, upgraded tile flooring and—most importantly—the huge great room where we can sit all 35 of our extended family members down at one table for holiday dinners. And the solar power system makes it all so affordable. We used to pay $350 in utilities in summer months in our old house, and now, we very rarely have an electric bill at all.
Laura and John Miller