As concern over the environmental impacts of residential house construction grows, many researchers are beginning to use life cycle assessment as a means to quantify natural resources consumption, and emissions of global greenhouse gases. Historically, focus has been on understanding energy use during the operational period of the home (use phase). With this approach, an important factor has been neglected; the embodied energy of construction materials. To understand overall environmental impacts of the building, all life cycle stages should be inventoried (material production, manufacturing, use, retirement). Assessing the environmental impact of a complex system, such as a house, requires an understanding of the environmental impacts of all of its parts. As the production sequence is followed upstream, the tributaries of material and energy input require exponential effort to quantify. The procedures used in this study are standard life cycle assessment methods .
The object of study was a 2,450 ft2 home (referred to throughout this report as the Standard Home, SH) built in Ann Arbor, Michigan. A two car garage and a full unfinished basement are included in the study and add an additional 2,100 ft2 of space to the above number. The home was selected because it is close to the average size of new homes built in the US  and uses standard construction materials and techniques. Using developer-supplied blue prints, the mass of all building materials was determined. Local and regional suppliers contributed substantially to this effort. Many home components and construction materials (e.g., carpet, fuse-boxes, refrigerators, paint) consist of multiple materials. The percentage of different materials in each multi-material product was established. This inventory was then divided into eight home systems: walls, roof/ceilings, floors, doors/windows, foundation, appliances/electrical, sanitary/HVAC, and cabinets. The study was focused only on life cycle primary energy and global warming potential. Other environmental burdens (e.g., resource consumption, air/water pollution, solid waste), and health related issues (e.g., off-gassing materials, use of carcinogenic substances) were not inventoried. Published data from several research groups [4,5,6,7] that have determined the environmental burdens for the production of selected materials were used. Combining this information with the mass of the various materials, the primary energy and global warming potential of SH was determined. The life cycle of SH consist of three distinct phases; pre-use, use and end-of-life. The pre-use phase consists of the manufacturing and transportation of all building materials used, and the construction of the house. The use phase encompasses all activities related to the use of the home over an assumed life of 50 years. These activities include all energy consumed within the home, including heating, cooling, lighting and use of appliances. The use phase also consists of the energy to manufacture all materials required to maintain the physical building and for home improvement projects. The end-of-life phase inventories the eventual demolishing of the home, and includes the actual dismantling of it, and transportation of waste to recycling operations or landfills. The recycling, incineration, or other end-of-life management processes have not been included in this study.
How can these impacts be reduced? Clearly, focus should be on the use-phase because its impact on the environment overshadows the other phases. To examine the effect of design changes made to reduce these impacts, a second home was modeled. Referred throughout the report as the Energy Efficient Home (EEH), this home mirrors the original in size and layout. All functions provided by SH are provided by EEH. In addition to reducing use-phase impacts, EEH served to test which materials reduce pre-use phase impacts. Strategies that lowered impacts in both phases were adopted as design parameters for EEH. Based on Energy-10 simulations, and use of the energy and global warming potential databases, EEH evolved into a much more energy efficient structure. The defining feature of EEH is its 12" thick, R-35 walls. The walls are constructed from double 2x4 studs, with a 3.5" spacing between the inner wall and outer wall studs. The wall cavity is filled with cellulose insulation. Because cellulose requires much less energy to manufacture than the fiberglass insulation in SH, the overall wall structure consumed less pre-use phase energy. At the same time the thermal resistance of the wall increased by a factor of three. Combined with a doubling of the insulative value in the ceiling, the EEH thermal envelope was greatly improved. Air infiltration was also greatly reduced. The effective leakage area (ELA) of SH was determined by blower-door test to be 153 in2. For the EEH, 20 in2 was deemed to be achievable. Energy efficient appliances where used in EEH. Based on a review of products available on the market, energy efficient appliances reduced annual electricity consumption by approx. 40%. Energy efficient appliances included the refrigerator, clothes washer and dishwasher. The kitchen range and clothes dryer were selected to operate on natural gas vs. electricity in the SH. Furnace efficiency was increased from 80% to 95%. The peak heating load was reduced from 95,300 to 28,200 Btu/h. A/C efficiency was increased from a SEER (seasonal energy efficiency ratio) value of 10 to 13. The peak cooling load was reduced from 36,600 to 28,160 Btu/h. Compact florescent lights were used throughout EEH. These improvements in energy efficiency were not obtained without cost. The market value of SH was $240,000. A base price was determined by subtracting the land price and dividing out the developer's profit. SH materials to be replaced were quantified and priced, and subsequently subtracted from the base price of SH. EEH replacements materials were similarly quantified, priced and added. Finally, the Developer's profit was added back, as was the land price. The EEH home purchase cost was $22,801 more than SH. Life cycle costs were then calculated for both homes. The life cycle cost was determined by adding mortgage payments (based on a 30 year mortgage at 7% annual interest), natural gas and electricity costs (based on utility rates of $0.462/therm and $0.08/kWh respectively) and the cost of home maintenance and improvements (based on material and labor costs that were escalated at 3%/year). Finally, four future energy price escalation scenarios were run to determine sensitivity to changing energy prices. The scenarios included falling, constant, and rising energy rates as well as energy rates presently used in Germany. Un-discounted life cycle costs for SH varied from $791,500 to $875,500. SH mortgage payments made up between 62-69% of the life cycle cost, with energy comprising between 8-17%.
Home maintenance and improvements make up the remainder. Un-discounted life cycle costs for EEH varied from $796,300 to $824,100. EEH mortgage payments made up between 73-75% of the life cycle cost with energy making up between 3-6%. Using a discount rate of 4%, each future annual total cost (mortgage, energy, maintenance) was converted into a present value cost. The summation of all years gives the discounted present value cost of the home. This serves as a useful economic tool in evaluating the two home alternatives. The discounted present value cost varied between $423,500 and $454,300 for SH and $433,100 and $443,200 for EEH. From an investment standpoint, setting aside future uncertainties, both homes are approximately of equal value. Given that life cycle energy use and global warming potential can be reduced by a factor of nearly three without compromising the home as a financial investment, it is natural to ponder why it is not happening on the home market. Several possibilities are:
- The home buying market does not consider reduction of environmental burdens as a significant element in evaluating home selection.
- Many home buyers, who on an average, move about every eight years, do not believe the added cost of energy efficiency will be appraised in future transactions. They may be skeptical that reduced energy costs will compensate for higher financing costs.
- There are no "green" regulatory or market incentives to motivate property developers.
- There is an insufficient volume of low energy homes being built to force the home design and construction industries into developing lower cost, higher efficiency homes. If there was a sufficiently high volume, the market might quickly focus on the life cycle energy savings of EEH-type residences.
 Conversion factor from "Annual Energy Review 1994, July 1995", DOE/EIA-0384 (94), Energy Information Administration, Office of Energy Markets and End Use, U.S. Department of Energy, Washington, DC 20585, pg. 352
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 Conversion factor from "Annual Energy Review 1994, July 1995", DOE/EIA-0384 (94), Energy Information Administration, Office of Energy Markets and End Use, U.S. Department ofEnergy, Washington, DC 20585, pg. 352