Just how significant is energy efficiency when it comes to residential construction, and more importantly, does it represent a substantial opportunity for remodelers?
For those who doubt the viability of the market, the energy-efficient housing sector will expand rapidly throughout the remainder of the decade, growing from an annual market value of $14 billion in 2012 to almost $84 billion in 2020, according to a recent report from Pike Research, a part of Navigant’s Energy Practice.
Put another way, more than 118 billion square feet of energy-efficient residential space will be created globally during that time period, the study concludes.
Whether the energy-efficient housing market can be a savior for sluggish housing markets or provide a demand-side tool to help control rising electricity demand remains to be seen, the report says. Adding to the complexity of this sector is the fact that definitions and characteristics of energy efficient housing vary widely, as well. The strategies for designing and constructing energy-efficient homes can employ a wide range of technologies and services, according to the report, making each energy-efficient home potentially different from the next. Building envelope improvements, lighting, HVAC, major appliances, water heating and energy audits are just a few of the components that go into energy-efficient housing.
There are hundreds of incentive programs, along with complementary certification entities and government agencies promoting energy efficiency and building science in one form or another (see sidebars for a sample of the diverse entities and relationships involved.) Essentially, they fall into two distinct groups. One type of program rates and certifies buildings as meeting certain energy efficiency criteria, while the other focuses more on the individuals who may be doing that rating or, more important to remodelers, those who will actually perform the work needed to achieve improved energy efficiency.
Should You Become an Energy Nerd?
Does this mean a remodeler should become an energy nerd with a blower door and a thermal imaging camera in the back of his truck? Larry Zarker, CEO of the Malta, N.Y.-based Building Performance Institute, doesn’t think so, although knowing how to use those sorts of tools certainly will be an advantage. He relates the story of one remodeler who went through BPI’s building analyst and envelope certifications and “came out with a whole new business model.”
“I’m still going to do the kitchens and baths and countertops and room additions that I’ve always done,” Zarker recounts the remodeler as saying, “but I can look [potential clients] in the eye and say, ‘Would you like to be comfortable in your home, too?’
“You’re going to sell the things you’ve always sold to your customers because those are the things they care about; those are the things they want, but home or building performance, as energy efficiency has come to be known, gives remodelers a skill set that enables them to make an accurate diagnosis of the problems in a home,” Zarker continues.
Not a Separate Discipline
Building performance contracting, in this scenario, is not a separate discipline or specialty. Although a remodeler might call in an energy expert as a subcontractor, just as he might subcontract HVAC or plumbing work, he could also become proficient in building performance contracting himself.
“Remodeling contractors are for the most part general contractors, and they don’t really want to have someone come in between them and their customer. They want to control bringing that sub in to help them, and they don’t want it to become a third-party relationship. I think the better situation is where the remodeler says, ‘I can do all these things,’ and brings in a specialist to get the energy efficiency right or, better yet, has someone on his staff who is able to handle the energy-efficiency aspects of the job,” Zarker says.
The extent to which remodelers are involved in the energy-efficiency movement is illustrated, Zarker says, by a BPI study showing that 40 percent of the respondents spent more than three quarters of their time doing energy-efficiency work in companies that didn’t ordinarily characterize themselves as doing energy-efficiency work. Zarker interprets that as remodeling contractors who have expanded the scope of their capabilities by adding staff to do energy related work and integrated it into their remodeling functions.
Marketing “building performance” alone or even “energy efficiency” to consumers may not be the best approach. “Most successful contractors sit down and listen to homeowners talk about their house, and a typical driver has to do with comfort. They [homeowners] are not comfortable in some rooms, or they find they have odors, have seen mold or know they have a wet basement. They tend to be pretty good at characterizing what’s wrong with their homes,” Zarker says, “and then by understanding that, you can start to look for causes.”
Remodelers looking to incorporate building performance into their business models would do well to become BPI certified, Zarker advises. “The best thing they can do is go get training to become a building analyst and envelope specialist. Remodelers already are so connected to the building envelope and with those two certifications, you can analyze the house, tighten it and bring in the HVAC contractor and be able to instruct them exactly what you want them to do. The old rules of thumb that HVAC technicians routinely used no longer apply. Systems can be smaller and more efficient for the lower load that the remodeler has created,” he says.
Indeed, Zarker says, “I think ultimately this is going to be a battle between HVAC contractors and remodelers to see who owns the customers. HVAC contractors may be well placed because they can do the comfort systems, but over time we are going to see essentially the home performance contracting market develop. That’s what people will be calling for, and the home performance contractor will have the skill sets to do anything the homeowner wants. I think remodelers are well positioned to own that market. They need to bring in the specialty expertise to understand what the building science and whole house issues are so they can solve problems and make customers really happy with the job they are doing.”
In the meantime, remodelers who do subcontract the HVAC portion of the job would be well-advised to seek out BPI-certified heating and cooling contractors who are on the same whole-house energy-performance page, Zarker says.
While the private home performance market is one way remodelers can take advantage of the demand for energy improvements, there is an additional factor that may drive demand in some areas: Incentive campaigns offered by government, utility and manufacturer energy efficiency programs, Leslie McDowell, BPI marketing and communications director, points out.
One measure of the proliferation of these programs is there are more than 150 of them that require BPI certification of contractors performing energy efficiency upgrades. For example, 50 of the nation’s 55 Home Performance with Energy Star (HPwES) programs specify BPI credentials as a foundation of their programs. Forty electric or gas utility programs currently reference BPI credentials, along with 54 local programs. Increasingly, manufacturers of energy efficiency related equipment are also requiring their distributors to have the knowledge and skills verified by BPI certifications, according to BPI.
Home Performance vs. Weatherization
McDowell makes a distinction between the term “home performance,” which refers to private contractors doing efficiency upgrades funded by homeowners, and “weatherization” programs, which are generally funded by government for qualified segments of the population that can’t afford to pay for the work themselves. The Department of Energy’s Weatherization Assistance Program, of course, is a prime example.
Incentives under these programs are not just offered to homeowners, McDowell says. Often, for example, the programs offer a free energy audit to homeowners – for which contractors are paid by the program. Although it varies from program to program, contractors may also be offered incentives for performing a certain number of home performance related jobs per year.
Not only may individuals need to be BPI certified, but companies may need to be accredited. The latter is a third-party under which a sample of a company’s work is inspected to make sure it is being completed to acceptable standards.
She points out there are a number of certifications available through BPI. “The certification most people get first is the Building Analyst certification. It’s a good introduction to the house as a system, and it provides the diagnostic skills you need to conduct an energy audit,” McDowell says.
Health and Safety, Too
“It also looks at health and safety issues such as mold and appliance zone testing,” she adds, “because when you seal up a house you want to make sure there are no gas leaks or carbon monoxide issues.”
BPI’s building envelope certification is the second level of certification often sought by those interested in making home performance part of their remodeling skill set. “It really is about prescribing the improvements needed to tighten the whole building envelope, control air leakage and optimize comfort,” McDowell explains.
Residential Building Envelope Whole House Air Leakage Control Installer, or RBEWHALCI, is BPI’s fastest growing certification. It certifies applicants have the skills needed to implement measures need to tighten the building envelope and reduce pollutants and allergens. Other BPI designations are targeted toward HVAC professionals in context of whole house retrofits.
Like Zarker, McDowell sees a moment when remodelers come away from the certification process with the realization of how essential the whole house as a system is to solving their customers’ problems and creating a better business model for themselves.