Partners (Second Quarter 2004)

Making Energy Efficiency Affordable

Energy conservation is a perennial subject. We all know the inherent value in reducing energy consumption to save money while helping the environment. But how many realize that energy efficiency is especially important for low- and moderate-income homeowners faced with utility bills that often absorb a significant portion of monthly income?

Granted, many builders of affordable housing are aware of the need for energy efficiency, and today’s construction generally includes at least some power-conserving features such as insulation materials and energy-rated mechanical systems and appliances. But the effectiveness of builders’ choices varies widely, and resulting energy savings tend to be relatively minor.

Photo courtesy of Oak Ridge National Laboratory, U.S. Department of Energy
Variations in solar features help researchers identify optimal modifications

So why don’t builders focus more on constructing affordable houses that use minimal energy— or even generate their own energy through solar technology? The reason is obvious: the incremental cost of achieving this goal tends to exceed low- and moderate-income families’ budgets, even with the help of specialized financing products such as “energy efficient mortgages.” These mortgages allow a lender to stretch the standard loan qualifications, but the downside is increased financial burden for the homeowner. Although the higher initial costs of major energy-efficiency elements are eventually compensated by savings on power bills, the payback point at which energy savings allow families to get ahead tends to be far in the future. Nevertheless, some builders are finding a way to pursue this goal.

Solar technology for affordable housing

Affordable solar homes might seem like an impossible dream to most people, but Jeff Christian thinks otherwise. Jeff is the director of Oak Ridge National Laboratories’ Buildings Technology Center, and he’s forged a partnership with Habitat for Humanity in Loudon County, Tenn., to build solar Habitat homes in Lenoir City about 20 miles southwest of Knoxville.

Oak Ridge, a division of the U.S. Department of Energy, is also partnering in this project with the Joint Institute for Energy & Environment in Knoxville, Tenn.; the Department of Energy’s Building America program; and the Tennessee Valley Authority’s (TVA) Energy Right? program. As the region’s primary electric supplier, TVA recognizes the need to rein in demand that’s likely to outpace production capacity in the long run, if left unchecked.

Photo courtesy of Oak Ridge National Laboratory, U.S. Department of Energy
Variations in solar features help researchers identify optimal modifications

Five homes have thus far been constructed in Habitat’s Harmony Heights subdivision, and more are planned. Each home is its own research project or “living laboratory” in which slight variations in design, materials and construction techniques help determine optimal combinations of features. For example, the first home uses a standard type of structural insulated panel (SIP) for the floor, walls and roof. The next two homes use different combinations of SIP types. Lead carpenters are trained to install the specialty features. As with other Habitat programs, volunteers contribute labor for the primary construction.

All the homes have solar technology, but they are still tied to the local electric grid. The cost of energy consumption is offset by the home’s generation of solar energy, which is contributed back to the power grid. This creates a credit for the homeowner that’s applied against the cost of electricity. To date, the average net utility cost of the solar homes has been approximately 50 cents a day or about $15 a month. That’s for an all-electric home with central air and heat. The ultimate goal of combining energy-efficient design and solar panels is to achieve “zero-energy” homes—ones that generate sufficient solar power to cover all of the energy needs of a typical family.

Making the numbers work

A major hurdle in affordable, energy-efficient housing is the cost of solar panels and other high-energy construction. In the case of the Lenoir City subdivision, the incremental costs run approximately $15,000 to $20,000 per house. However, extra costs have been mitigated so that homebuyers end up paying the same as for a standard Habitat house.

Donations of energy-efficient material from many manufacturers and suppliers have helped to lower construction costs. While these groups display business acumen in promoting their products, they are also committed to achieving the project’s long-range goal—creation of comprehensive whole-house “kits” that can be sold at a reasonable price through mass production, as solar technology continues to improve and manufacturing costs come down. By the year 2010, Jeff anticipates that the “kits” will bring the price of today’s energy efficient solar homes in line with that of conventional affordable homes.

Spreading a good idea
Habitat for Humanity has benefited greatly from the interest generated by these solar homes. Supporters are enthusiastic about how these houses can help families achieve ongoing, substantial savings due to “zero-energy” or near-zero energy consumption.

Supporters are enthusiastic about how these houses can help families achieve ongoing, substantial savings.

The more units of energy-efficient, affordable homes that are built over time, the more viable the program will become to local housing authorities, nonprofits, developers, funders and other partners interested in affordable housing. Many such partners have a passion for the subject because they understand the significant impact lower power costs will have on their clients. “Eco-friendly” or “green” features can also enhance eligibility for affordable housing tax credits, and this is another reason those concerned with affordable housing find the program appealing. The success of the program also helps educate consumers to understand the benefits, and this leads to increased demand.

Acknowledging the great potential that exists for this market, Jeff notes, “A key part of this project is getting the public and builders to visit the homes and learn about them. We’re proving that energy-efficient, affordable housing can be achieved for real families today, and we’re poised to be able to help many more families in the near future.”

For more information on solar technology for affordable- housing developers, contact Jeffrey E. Christian at or visit

This article was written by Wayne Smith, Community Affairs Director at the Atlanta Fed.

New Ideas for Energy Efficient Construction

Omni Innovation, LLC, is a Nashville, Tenn., company on the forefront of creating energy-efficient, affordable housing that costs less than conventional construction. Founded by Larry E. Elliott, Omni is developing the use of Expanded Polystyrene Foam (EPS Foam) as the primary material in home construction. Not only is the material less expensive, but reduced construction time results in lower labor costs. EPS Foam construction generally takes one-fifth to one-third as long as traditional housing construction.

Larry Elliott and Chris Urban are the leadership team behind Omni Innovation, LLC.

As a home builder and licensed building inspector, Larry felt frustrated with the industry’s inability to provide energy efficient, affordable housing to lower-income families, and he began to experiment with alternative approaches. Six years of engineering, testing and prototyping led to a patented technology that allows Omni to build affordable housing in a limitless range of styles and exterior facades. Almost any house plan can be converted into or emulated by Omni’s EPS system.

EPS Foam has been approved for strength and durability against fire, heat, cold, rain, wind, hailstorms and earthquakes. The material is of no interest to bugs or termites, and it has sound-reducing qualities. It emits no fumes or gases, has no other adverse health implications, and it can be recycled when a house is torn down.

Because EPS Foam serves as the wall structure, roof and flooring, the homes are highly energy efficient. Traditional housing has insulation factors ranging from R-15 to R-35, whereas the Omni EPS System is rated from R-48 to R-60. In addition to ongoing energy savings, homeowners benefit from lower maintenance. For example, standard roofing lasts 50 years versus the typical 20-year roof in most traditional, affordable homes.

Omni’s EPS technology should not be confused with homes based on Structural Insulated Panels (SIPs). SIP-based homes also use EPS foam, but require strand board for structural support and a traditional wood truss roof system, neither of which Omni uses.

Photo courtesy of Omni Innovation, LLC
Omni’s prototype of EPS foam construction shows architectural adaptability.

Prototype homes have been built in Texas and Kentucky. Finished homes look no different than traditional homes either inside or out. Interior walls are finished with fire-resistant sheetrock, and kitchens and baths use traditional cabinetry and fixtures. These homes qualify for conventional financing the same as traditional homes.

Omni’s initial focus is on working with both urban and rural community development corporations (CDCs) and economic development corporations (EDCs). The immediate goal is to establish a track record by bringing more homes to market in order to familiarize affordable housing practitioners with Omni’s product and its value. To help do this, Larry has assembled a team of professionals including Christopher Urban, Omni’s chief executive officer, who has a background in engineering, finance and marketing. Chris shares Larry’s enthusiasm with this innovation in energy-efficient, affordable housing.

Only time will tell how this form of construction will affect the nation’s housing market.

For more information on foam construction in affordable housing, contact Christopher M. Urban at

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