For the last three decades, an invitation has been extended by the powers that be for HVAC contractors to add home performance services to their businesses. This time around we see it finally beginning to stick. Let’s take a look at exactly how successful HVAC contractors are implementing home performance in the real world and on their own terms. Let’s also take an honest look at challenges that have caused others to hesitate accepting the opportunity.
The Thirty Thousand Foot View
First of all, let’s acknowledge that without the entire HVAC system being safe, delivering good indoor air quality (IAQ) and delivering maximum operating efficiency, home performance is incomplete. Regardless of what home performance was in the past, without the HVAC industry, home performance is limited in its offering to a customer. When it comes to energy, it’s the HVAC system that consumes the greatest amount of energy in a home.
Second, you already have the customers. A typical company has more than 1,000 service agreements in place, ensuring ongoing home improvement relationships. You’re their go-to guys when it comes to comfort, safety, and efficiency. You have the advantage if you embrace home performance.
Third, only a small percentage of HVAC contractors are offering every home performance service available under the sun. We’ve found that some services such as air sealing and insulation upgrades are a natural fit. To add window replacement, solar panels, wind machines, siding, lighting, plumbing, appliance upgrades, and mold mitigation just doesn’t interest most HVAC contractors, so let someone else manage those headaches.
Should you decide to take on more types of home performance work later, you can do so. HVAC work and improving the building envelope are the low-hanging fruit that make the biggest impact.
The Building is One Big Duct
HVAC contractors naturally understand the impact of the building on their system design and installed system as soon as they learn the basic principles of home performance. Before home performance and HVAC system performance solutions can be identified and corrected, an HVAC contractor must first understand how the home functions in the real world.
Using this knowledge is one of the main ways many successful HVAC contractors are tying into home performance from an HVAC perspective. Their understanding of the environment they will be conditioning, and ability of these contractors to reduce HVAC system energy consumption and load opens the door to the real home performance opportunity.
Many of the dynamics associated with home performance are typically overlooked by non-HVAC professionals because they don’t have the ability to make the HVAC system respond to the building. When this occurs, customer’s expectations are not met and the comfort, indoor air quality, energy efficiency and safety promised are often far less than anticipated.
Two Home Performance Extremes
In the home performance field there appear to be two extreme and very different lines of thinking.
One is that a home’s efficiency must be absolutely perfect.This concept teaches that you have to spend anywhere from $30,000 to $60,000 before any real improvements in the performance of a home are realized. The truth is, most homeowners don’t want perfection; they want solutions to problems in their homes and a noticeable level of improvement in comfort, air quality, and efficiency.
There will always be a few extreme homeowners who seek the prestige of visible solar panels, wind machines, and other “green” technologies. These guys make the news and Internet splashes, but most people have no interest in extreme environmentalism. It just doesn’t make sense to them, and there’s no payback in most cases.
The second extreme group focuses on “plug-in efficiency.” You’ve probably witnessed this firsthand with the weatherization guys that charge a fortune for extensive testing as their fountain of profit, then offer as the energy efficiency solution a box filled with compact florescent lights, tubes of caulking, a roll or two of weather stripping, a low-flow shower head and a handful of receptacle gaskets. These features are all well and good, but give the homeowner a false sense of saving energy, when in reality very little was accomplished.
The real opportunity for HVAC contractors is the area in between these two philosophies, because it’s real and is what your customers are looking for. Many homeowners are looking for real solutions to their home performance issues but have no idea where to turn. What these customers are looking for is solutions that provide clean, comfortable, and fresh air with an honest energy savings payback that doesn’t require extreme investments or unreasonable risk. This is where you come in.
Testing and Diagnostics
In order to provide solutions to home performance problems you will first have to test the house and a few of its related systems. By testing and diagnosing a home’s systems, a contractor can pinpoint the real issues that are causing discomfort and creating excessive energy costs and safety risks. The amazing part is that most of these improvements directly affect the HVAC system.
Involve your customers in the diagnostics to educate them about their homes issues. With their involvement you can better understand what they desire and match the budget they decide on once they understand the needs of their home. Also be certain to test-out at the completion of the project to verify that you delivered what you promised.
HVAC and Home Performance Repairs
Once you’ve performed your testing and diagnostics there will more than likely be repairs needed. Help your staff understand the cause-and-effect relationships that can occur in a home by changing out equipment or renovating and balancing the duct system so they can effectively communicate these needs to your customers.
Repairs and testing outside of the HVAC scope of work must be requested by your customer. Avoid addressing building envelope defects when the request from the customer was only for HVAC related work. Be certain to ask permission to perform additional non-HVAC testing and be certain to introduce non-HVAC testing and repairs in the context of building load reduction and improved IAQ.
If you’re first trusted as the HVAC professional, remember your role and customer expectations. Introduce other energy efficiency work carefully, but with conviction. Your marketing should reflect the same approach to avoid a “me too” appearance in the home performance arena. We can lead this movement if we approach the issues from the perspective of who we are, not what a program tells us we should be. Do this on your own terms.
Rule Number One: Maintain Overall Profitability
Another real risk of entering the home performance contracting market is that at the onset, many HVAC contractors become so immersed in this new type of business that they fail to keep their focus on their existing HVAC business profitability.
How much extra time did you have available this last month to pursue other interests? Home performance is another interest. Treat it like one. Consider how to carefully add home performance to your HVAC contracting business in a way that won’t upset the careful balance of your current business.
Here’s the pitfall; you begin picking up home performance testing and repairs. It’s new, exciting, and lots of fun. Each job appears very profitable. But, three months down the road your company profit-and-loss statement has lots of red on it. What happened?
In reality, while you were running around playing with your new home performance business, the number of HVAC jobs decreased by 35%. You took your eye off the machine that cranks out the income that covers your overhead and provides ongoing profit, and you’ve lost a ton of money. You’re in deep financial trouble.
You realize you’ve also diverted some of your labor from doing what they love day-to-day and they wonder why you’re messing with their careers by putting a calking gun in their hands instead of sheet metal shears.
How to Move into Home Performance
Many successful HVAC contractors have entered the home performance market by getting training for one or two testing and selling technicians, or hiring an energy rater to do their home performance testing, then easing into this new business venture.
When it comes to getting the work done, many have subcontracted their air sealing and insulation to a reliable subcontractor at first. This allows them to test the water for a season and really see how the two trades fit together. They learn to effectively bundle, sell, and price the work, and pull the pieces together while still maintaining their current HVAC business.
Then the time will come to train more testing, sales, and installation employees. Then you’ll hire a new manager to set up inventory and work processes, purchase the right test and installation equipment, and manage the insulation and air sealing crew. Over a year or so, maybe less, the home performance department is transitioned into the company. This way the venture can be profitable to the contractor and beneficial to his or her customers.
This is the most consistent and reasonable method of adding home performance to an HVAC company. There are variations, but these principles usually apply. The message is to protect your existing HVAC business.
The transition into home performance testing and repairs won’t happen overnight. It will take a tremendous amount of dedication and a spirit of teamwork among those in your company.
Remember who you are and where you come from. It’s OK to continue to be an HVAC contractor and add home performance to your offering. You don’t have to become one of the two extremes. You determine how to play the game on your own terms.
Rob “Doc” Falke and David Richardson serve the industry through National Comfort Institute, an HVAC-based training company and membership organization. If you’re an HVAC contractor or technician interested in a free Blower Door Test Procedure, contact Doc or David through [email protected] or call them at 800-633-7058. Go to NCI’s website at nationalcomfortinstitute.com for free information, articles and downloads.