Sales of low-energy homes stall

"People don't seem to be willing to pay for it."

In 2007, Meritage packed $20,000 worth of solar panels, high performance insulation, low-leakage air ducts, and other systems in its first green community in Vacaville, Calif. The "Encore" homes promised to slash electric bills up to half, and buyers snapped them up even though Meritage offered them at a higher price than competitors.

Sales figures in July showed the Encore development sold 1.55 homes per week, compared with 0.88 per week for similar homes in the same city, Kramer said.

But that advantage disappeared in the second half of the year. Meritage and its closest competitor both sold about one home every two weeks according to sales data for November, and Meritage slashed prices that month. Though Meritage continues to build Encore homes in Vacaville, it's reevaluating whether to move forward with plans to start new green communities.

UBS analyst David Goldberg said most major builders will continue to invest in green developments. But they'll likely need to find cheaper ways of doing it. "If it cost more to put solar panels on there, are you still exploring it? I'd say, maybe not," Goldberg said. "But there are a lot of things you can do in communities that are environmentally friendly."

For example, builders could add Energy Star-rated appliances in homes that cut utility bills without adding much to the overall price tag.

The economy may have left consumers jittery, but those looking for new homes will still look for energy efficiencies.

"If it's a house that has leaky windows, and not enough insulation, I think people will pick up on that," said Elliott Pollack, a real estate consultant in Scottsdale.

Phoenix home builder Ed Gorman agrees.

"Everybody wants to be green, but nobody wants to pay for it," said Gorman, president of Modus Development. "But when you talk about putting money in our pocketbook, that's important to them."

Gorman's Galleries at Turney project, two rows of pricey, ultramodern town homes, sold out last year. His secret? The Galleries were equipped with a unique set of cooling systems that lock out Arizona's oppressive summer heat. "There's sex appeal in good design," Gorman said.