Study Shows Pearl Certification Boosts Sales Prices for Energy-Efficient Homes

CodeWatcher Pearl

This home certification program understands how to market to consumers while also giving appraisers the information they need to accurately value green homes.  


Getting a Pearl Certification can increase a home’s value by thousands of dollars, a new study has found. The study on valuing properties with solar installations and energy-efficient features–performed by a team of appraisers led by national expert Sandra Adomatis–looked at a set of 27 Pearl-certified homes in Virginia and Maryland and compared them with 35 sales for similar homes that had not been certified.

“The study found that the average price premium for a Pearl-certified home was more than 5% when the certification had adequate market exposure,” says Adomatis, “Our findings are consistent other studies from across the United States, which consistently show a premium on the sale of homes with green and energy efficiency certifications.”

In the Central Virginia market, where Pearl launched in 2016, the average price premium for Pearl-certified homes was 5%. Premiums in areas of Northern Virginia where Pearl Partner real estate agents had marketed the Pearl certification ranged from 2.2% to 4.2%. Homes that had Pearl Certification, but were not marketed as Pearl certified, showed lower, and in some case negative, premiums.

“The study’s findings illustrate what we see in the market,” says president and COO Robin LeBaron. “Buyers want energy-efficient, high-performing homes, and they will pay more for them, but buyers are only willing to pay a premium if they have credible, third-party information about the home’s features.”

One of Pearl’s biggest innovations, according to LeBaron, is the marketing that supports the system. “Our marketing program is something that no other system has developed,” he says. The Pearl certification provides buyers with information about the home’s high-performing features, such as insulation, high-efficiency heating and cooling equipment, Energy Star appliances, and smart devices. It also provides an extensive set of marketing tools to help buyers understand why these features matter.

“We provide our Pearl Partner real estate agents with flyers highlighting the home features, placards that can be hung around the home, and social media posts,” says CEO Cynthia Adams. “When agents use these education materials, their buyers really understand why a Pearl-certified home can be a great investment. Certification, and the education that comes with it, are what makes the value of an energy-efficient home visible.”

How does Pearl fit in broad universe of green rating systems and programs?  “The system is not a miles-per-gallon indicator of relative efficiency, like the HERS Index or the Home Energy Score,” LeBaron explains. “While there is a value to an mpg metric, consumers also benefit from the detailed information about the individual energy efficient features in the home — and the features that should be in the home — that Pearl certification provides.”

The Pearl program assigns points to different home features in four categories: Building Shell, Heating and Cooling, Baseload, and Home Management. “Our system encourages homeowners to improve their homes with features that meet 2012  International Energy Conservation Code and Energy Star standards,” LeBaron says. “We see our system as complementing the HERS Index and Home Energy Score, and when they are available we regularly include both in our Certification Reports as additional information for the homeowner or homebuyer.”

LeBaron emphasizes that while the program uses a point system, it focuses as much on making the  value of the home’s features is visible in the real estate transaction. “We collect data and document the green, renewable, and energy-efficient information and get it into the MLS,” LeBaron says. This gives appraisers an inventory of what’s in the home and makes it visible. By contrast points may not be as meaningful to all home buyers or to appraisers.

Pearl has certified over 400  to date, and is currently certifying homes at a rate of more than 10 a week. Home certification costs $379 and is offered in Virginia, Maryland, New Jersey, New York, and Washington DC, and is expanding to Massachusetts and California in early 2018.

For information about Pearl Certification and participation requirements for Realtors and contractors, visit the website.

Download the Valuation Study of Pearl Certified Homes here.