The homes in this recently-built KB Home development in California are constructed with high-density insulation and extra-thick walls, in an effort to reduce energy costs.

As the state of California works to require all its new residential buildings to meet a zero net energy code by 2020, the California Energy Commission is hedging the success of its new mandates on the increased production and lower costs of solar and energy-saving features, which translate into lower energy bills for the consumer.

But some in the industry fear that compliance will cost more up-front for builders and buyers alike. KB Home and Meritage, both large national builders, have already built some net-zero homes in California at market-rate, but smaller builders and contractors lack the economies of scale needed to keep prices down.

Mike Hodgson, chairman of the California Building Industry Association’s energy committee, estimates compliance with ZNE could raise the price of a $300,000 home by $23,000… [and] for each $1,000 rise in home prices, 14,000 California families are priced out of the market.

Builders could also face an additional challenge in financing, according to the Wall Street Journal’s Gabriel Kahn. Lower monthly bills should add to the value of a home, but this consideration is often not included in appraisals.
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