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Making Green by Going Green

Kermit the Frog may think, “It ain’t easy being green,” but the 10-foot-tall frog on the placard welcoming you to the Bosch display at the International Home Builders Show in Orlando, Fla., might beg to differ. Bosch has long been at the forefront of energy-efficient, or “green” appliances, but the company now stands at the front of a very long line of companies turning their attentions to energy conservation.

Kohler is one of them. “We have a wide array of products for water conservation and energy efficiency,” says David Kohler, group president of the plumbing products giant. “One of the greatest trends we see, obviously, is sustainability, and we are developing a full line of products that conserve water.”

Conserving water, lowering electricity usage, and reducing emissions. Believe it or not, your washer-dryer can play a big role: While government and media tend to focus on automobiles and factories as the greatest villains in the fight to save the planet, homes are actually one of the largest contributors of CO2 emissions.

“Because of the carbon footprint on a home, and the energy loss on a home,” says Scott Young, senior marketing manager for Dow Chemical in its building and construction division. “If you consider driving to work and leaving your car running all day -- that's the home you leave when you go to work each and every day.”

As energy costs have skyrocketed since mid-2004, consumers are beginning to get the message, and so too are homebuilders and the home remodeling industry. Common household names like Kohler, Viking, Whirlpool, General Electric (the parent company of CNBC), Sherwin-Williams, and Dow are offering innovative, green product lines -- a $40 billion-a-year industry -- that don’t break the bank.

“Probably more than anything else, it is home heating costs,” says Kermit Baker of Harvard’s Joint Center for Housing Studies. “That has really tipped them over the edge in terms of making that much more of a palatable issue for the public. Suddenly you can see the real benefits of going green,” says Baker, who is director of Harvard’s Remodeling Futures program.

“There was a lot of background information on this, a lot of background visibility on green, that's really been around for 15 or 20 years,” says Baker. “But I think the last 12 months have really doubled or tripled the sort of recognition of green issues and green standards.”

So much so that at the homebuilders convention in Orlando this week, the National Association of Home Builders announced a brand new collaboration with the International Code Council to undertake the development and publication of a residential green building standard. The ICC has already been promoting green building requirements through its widely adopted family of international codes, which set minimum standards for energy efficiency and sustainable building practices for the construction industry.

“NAHB members have proven that a voluntary, region-specific, flexible program can be both truly green and also allow for innovation,” noted David Pressley, president of the homebuilders trade group.

Building a green home from the ground up can be more expensive, depending on just how green you go, but experts say much of that up-front cost can be recouped in reduced energy bills. The real challenge is retrofitting older homes, which make up 85% of the US housing stock.

“In retrofitting older homes, that's the real problem,” says Baker. “Homes that were built prior to 1970, prior to the oil embargo, are very inefficient, and they're the ones that need the help the most. So I think there's a lot of attention there to, while we're fixing up these homes, while we're modernizing them, putting in the nice kitchens and bathrooms, let's make them more energy efficient too, and let's use products that really do promote more sustainability.”

From appliances, to materials such as bamboo flooring, to more sophisticated, if less-sexy, energy management systems, Baker says nearly 20% of architecture firms say that they're including green elements in the homes that they design.

The home design, remodeling and building industries are seeing the market demand, and they are clearly responding. Corporate America has finally realized that in addition to the incalculable value of saving the planet, there is plenty of green to be made in going green.

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Questions? Comments? RealtyCheck@cnbc.com

  • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.

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