Closing the Energy-efficiency Deal

Everybody is talking about energy efficiency these days. You’ve certainly heard homes that have completed energy-efficiency retrofits are enjoying fewer drafts, consistent temperatures across rooms, better ventilation and humidity control, and lower utility bills.

How can you make energy-efficiency improvements part of your portfolio? Better yet, after you recommend energy-efficiency improvements to a homeowner, how do you ensure he or she contracts you to complete the work? To be successful in the energy-efficiency remodeling marketplace, remodelers must align themselves with an energy auditor and then research and apply for all the incentives available for a project. The more the team can reduce a homeowner’s costs, the more likely the remodeler will get the work.

The Incentives

In today’s marketplace, it is important to stand out from the crowd and reach new customers and markets. For example, my firm offers certification of existing homes to the U.S. Environmental Protection Agency’s Home Performance with Energy Star (HPwES) program. HPwES is a performance standard that provides a whole-house approach to improving energy efficiency and comfort while helping to protect the environment.

To meet the HPwES standard and to receive many incentives available for energy-efficiency retrofits, you must have a relationship with an energy auditor who has been certified by the Building Performance Institute (BPI) or Residential Energy Services Network (RESNET). You also should have relationships with a Combustion Appliance Zone tester and certified Level I thermographer in accordance with the American Society of Non-Destructive Testing standards. There are a number of firms in the current market that have staff meeting all of these certifications. My firm prefers to use third-party rater partners to avoid any possible conflicts of interest.

Auditors use tools and software to perform two whole-house energy audits—one before energy-efficiency improvements are made and one after. After the first audit, a report provides a list of recommendations, including cost, energy savings and return-on-investment calculations, that will increase the house’s energy efficiency.

Once the recommendations are made, it is time to locate the incentives that can reduce the cost of the project. Being able to offer additional value to your customers to offset project costs while reducing operational costs is another way to differentiate your business from your competitors. The following Web sites should be part of your incentive-locating process:

• The Database of State Incentives for Renewables and Efficiency, DsireUSA.org, allows you to search for incentives by state. In addition to state incentives, it offers local and federal incentives, as well as local utility incentive program information.

• Energy Star, EnergyStar.gov, offers several options on its site. These include the following:   

1. Product incentives: EnergyStar.gov/index.cfm?fuseaction=rebate.rebate_locator
2. Federal tax credits for consumer energy efficiency: EnergyStar.gov/index.cfm?c=tax_credits.tx_index 
3. Energy Star and federal tax credits: EnergyStar.gov/index.cfm?c=windows_doors.pr_taxcredits 
4. New construction/major remodeling: EnergyStar.gov/index.cfm?c=new_homes.hm_index and EnergyStar.gov/index.cfm?c=tax_credits.tx_hm_builders 
5. State and local governments leveraging Energy Star: EnergyStar.gov/ia/business/government/State_Local_Govts_Leveraging_ES.pdf 

Once you have determined all the possible rebates for your location, you should list them in a master spreadsheet to determine the rebates for your specific project.

The Example Project

An energy-efficiency retrofit typically includes one or more of the following upgrades:

1. Air sealing
2. Additional insulation
3. HVAC upgrades
4. Domestic-hot-water upgrades
5. Addition of renewable-energy systems
6. Additions to the existing home, including new windows, doors, etc.