BusinessWeek Online

Home Improvements that Count – BusinessWeek Online

September 15, 2006

Remodeling: Going “Green” May Not Save Green
Using eco-friendly products and materials may make a homeowner feel good, but doing so comes at a price—and sometimes it’s an ethical one.

With the real estate market in the doldrums, it’s a good time for homeowners to look around and remodel, dressing up their domiciles for the next market crest. For those settled in for the long haul, new tiles and cabinets are a way to make home feel more, well, homey than before.

But those who consider earth their first home and their house or condo the second, may give priority to incorporating environmentally friendly materials into improvement projects.

With materials ranging from floors made from recycled glass to wood from the fast-growing and easily replenished Lyptus tree, green materials are a well-established segment of the interior decorating and design market. But consumers should be careful. Green products may translate into lower energy costs down the road, but buying and installing them can mean a major investment.

As anyone who has remodeled their home knows, there’s no limit to what you can spend. The good news for buyers on a budget is that some of the best ways to help the environment and save on energy bills are at the low end of the price spectrum. Household appliances like dishwashers and air conditioners are consistently becoming more energy-efficient.

Dan Taddei, director of education at the National Association of the Remodeling Industry, says “the government has pushed hard for people to do EnergyStar,” a program rating the efficiency of household appliances. Still, consumers are likely to find out that this can be a proportional equation. Upgrade the fridge to a plus-size behemoth and it’ll still suck up its share of electricity.

Fluorescent lighting is another money-saving option. Though buzzing greenish bulbs have given fluorescent lighting a bad reputation, the bulbs available now are both reasonably priced and not “the cold sinister light that we’re used to from commercial spaces,” says Marc Schlesser, chief design officer at MyHome, a kitchen and bathroom showroom in Manhattan. In terms of energy consumption, he describes fluorescents as preferable to the halogen lamps that he called “heating devices which happen to produce light.”

But new light bulbs and an air conditioner don’t amount to a home makeover. Contractors say customers going the remodeling distance should expect to pay a premium for doing good for the planet. Chris Donatelli, a partner in Donatelli Castillo Builders, a remodeling outfit in San Jose, says clients tend to choose the earth-stewardship route because “it’s the right thing to do.”

Chemical Concerns
And consumers often find health and air-quality reasons to go green. Buildings are now more energy-effecient, but that also means they hold in more of the chemicals added to building materials. Dan Mackey, a San Jose remodeler who is developing a green course for industry professionals with Donatelli, says he sees increased interest in materials made with fewer chemicals and less glue. For example, formaldehyde, commonly found in insulation and other building materials, has been known to cause asthma attacks, and often people are willing to pay more for insulation without it.

Indeed, creating one’s own indoor Eden is not cheap. “It’s not going to be practical for everyone to make every choice in every house a green choice,” Mackey says, which is why you need to make your choices carefully. Mackey is in the process of reroofing his own home with a recycled tire product. It’s a “striking thing,” he says, noting that it “looks like I’m putting a slate roof on my house.”

For a wow factor, Schlesser likes induction cooktops that create a magnetic field and send currents into magnetic pots and pans, effectively turning them into the cooking devices. Compared with gas and electric stoves, they save energy and don’t throw off heat. But such options don’t come cheap.

Compromise Choices
Likewise, solar panels on houses may impress passersby, but don’t count on them as an investment. Breaking even on them depends on factors like initial installation costs—which can easily top five figures—the amount of sunlight in an area, and net metering—whether the local power grid gives homeowners credit for energy they return to the grid. In short, they should probably not be thought of as an investment that can produce a meaningful return.

Those willing to dabble in green materials can pick and choose. But even the the truly committed will have to make choices. Schlesser points out that any benefit from an environmentally friendly house far from public transportation will be counterbalanced by the driving it takes to get there. Products made from recycled materials may be produced via energy-wasting procedures.

As demonstrated in his showroom, it is sometimes necessary to compromise. Schlesser pointed to Corian, a DuPont (DD) product that he describes as “a countertop of Saudi oil,” because it is produced using a petroleum derivative. He disapproves of using fossil- fuel-based materials so affluent homeowners can chop their endive in style, but, as he admits, it always comes down to the customer’s choice.