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Energy-efficiency rating: Definition, importance, types

    Are you trying to navigate the world of energy-efficiency ratings? You might think it's easier to leave all these abbreviations and grades such as ENERGY STAR®, LEED and HERS to the pros. However, homeowners and homebuyers could potentially benefit from learning about these certifications.

    Energy-efficient systems and appliances could possibly influence the home's value, lower bills and help combat climate change. That's why you may want to familiarize yourself with some key energy-rating systems and how to understand their scoring systems.

    What is energy-efficiency rating?

    An energy-efficiency rating is a score awarded to buildings or appliances, taking into account various factors that contribute to overall energy efficiency, including energy consumption, environmental sustainability, thermal performance, quality of construction materials and more.

    Experts in various fields, from construction to environmental protection, use different energy-efficiency ratings. While some of them are more widespread and well-known, there’s no "main" rating system or singular governing agency that exists nationwide. As a result, there aren’t many uniform standards among different entities regarding grading systems or how and why these grades are assigned. Depending on the agency, energy efficiency is usually measured in percentages, letter scores or numerical values.

    Overall building energy efficiency

    Generally, when assessing the energy efficiency of an entire house, professionals look at the insulation quality, renewable energy systems in place (if any), installation of smart devices and even construction waste management.

    Appliance energy efficiency

    When evaluating an appliance's energy-efficiency rating, several factors are considered, the most important of which is how much energy it uses. Typically, the higher the energy rating, the less energy an appliance consumes without affecting its performance.

    Why understanding energy efficiency is important for homeowners

    You most likely won’t need to know all the energy-efficiency ratings set by different agencies in your everyday life. However, homeowners and homebuyers may encounter them when doing repairs, choosing appliances or during some home inspections. Here are some potential reasons why understanding and paying attention to energy efficiency could be helpful:

    • Lowering your bills: A greener home could help save on electricity, water and heating bills, thanks to a comprehensive approach to making a property more energy efficient. This includes using LED lighting, choosing appliances that consume less power and adding insulation.
    • Increasing property value: Many homebuyers see the value of energy-efficient homes and may be ready to pay extra for it. For example, a study by Freddie Mac established that residential properties with an efficiency rating sell for 2.7% more than those without the rating; homes with better efficiency ratings had 3–5% higher selling prices than those with lower ratings.
    • Adding to your comfort: Energy-efficient homes usually reduce temperature fluctuations and drafts, which help make your everyday life at home a little more enjoyable.
    • Positively affecting the environment: Due to a reduced reliance on fossil fuels to function, energy-efficient buildings may help minimize your carbon footprint and contribute less air pollution to the environment.

    Exploring different types of energy-efficiency ratings

    The lack of one unified score system and the fact that the concept of energy efficiency can apply to a building, appliance or a particular system (such as air conditioning) could be confusing for homeowners.

    Here are some key U.S. efficiency ratings homeowners may want to know, from some assessing overall home efficiency to those focusing on air conditioners and small appliances:

    ENERGY STAR Certification

    ENERGY STAR is a government-backed program and is among the most well-recognized authorities on energy-efficiency ratings. An ENERGY STAR rating may be issued for residential and commercial buildings and even industrial plants, but probably the most well-known application of it is confirming the energy efficiency of home appliances and electronic devices.

    Unlike other systems, ENERGY STAR has no rating scale, simply stating that this product meets the efficiency standards set by the Environmental Protection Agency (EPA). ENERGY STAR appliances are marked with a distinctive blue label, which confirms that a product consumes less energy than a non-rated counterpart.


    Leadership in Energy and Environmental Design (LEED) is a certification program developed by the U.S. Green Building Council and used worldwide. It is granted to energy-efficient buildings (including residential ones), neighborhoods and even cities.

    This rating system defines a green home by reviewing and awarding points to five main aspects of the building, including water efficiency, construction materials and indoor air quality. Depending on the points, LEED has four certification levels: Certified, Silver, Gold and Platinum (the highest of all the tiers).


    The National Green Building Standard (NGBS) is another certification that comprehensively evaluates home systems, materials and resource efficiency. An NGBS inspector evaluates a house on six factors, with resource efficiency, operation and maintenance, and lot development among them. The building can be awarded one of four performance levels — Bronze, Silver, Gold and Emerald — and either new or existing homes can qualify. Interestingly, if you want to upgrade your home to the next tier, you’ll need to improve its performance in all six categories.


    Homebuyers and sellers may encounter the term Home Energy Rating System (HERS) when a home is on the market. The U.S. Department of Energy uses this nationally recognized system to assess a house's overall energy efficiency compared to similar properties. HERS characterizes how efficiently the home operates and what areas could be improved to increase energy efficiency.

    HERS gives an average house built to 2006 standards an index of 100. This is a benchmark to which an assessed home is compared. Anything performing worse than this reference index is awarded more points. In contrast, a home rated “0” (Net Zero Energy Home) scores the best on the scale, producing more energy through renewable resources than it consumes.


    Both of these values are used to measure air conditioner energy efficiency, and there is a high chance you may encounter them as a homeowner. The energy efficiency ratio (EER) measures the cooling capacity of your air conditioner. EER compares the cooling output against how much energy it consumes. The seasonal energy efficiency ratio (SEER) is similar but is calculated throughout summer, when temperatures may fluctuate from 60°F to 100°F. Generally, the higher the rating, the better the air conditioner's efficiency.

    In summary

    Energy-efficiency rating is a system to measure how much energy an appliance or house consumes. Homeowners might benefit from knowing that many energy-efficiency ratings exist and may be used in different situations. For example, you may come across certain energy-efficiency ratings when buying your first house, remodeling your home or choosing new appliances. Hopefully, this information will help you understand your house a little better and enjoy your home to its fullest.

    Energy Rating FAQs

    1. How do you check energy-efficiency rating?

    If you live in a single-family home, you can try reaching out to a local energy assessor to receive an audit of your home and get some recommendations. If you want to check the energy efficiency of your apartment building, you may want to start your search with local government websites. Some cities in the U.S. publish lists of buildings that were assessed, and you usually only need the address to verify the energy-efficiency rating. Finally, for home appliances, you could try looking out for an ENERGY STAR sticker on the product itself or check the list of ENERGY STAR Energy Efficient Products published on their website.

    2. What is a good energy-efficiency rating?

    A good energy-efficiency rating depends on the system you use. For example, for the LEED rating system, Platinum is the highest level of certification, with those buildings scoring over 80 points on the scale. For HERS, however, an index score of 0 is the best possible grade.

    3. Can a good energy-efficiency rating improve the value of my home?

    Property value is comprised of many different factors, including the overall condition and location of the property as well as market conditions, just to name a few. That said, there is a chance your property value may increase due to improving energy efficiency as some buyers may recognize the potential this has to help lower energy costs over time.

    4. Do energy-efficiency ratings vary by region?

    Energy-efficiency ratings may differ depending on the country or region. In the U.S., there are a couple of main, nationally recognized systems. While these systems grade all the products (or homes) using the same scale, different U.S. regions may have different minimum standards.

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