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    The Informational Tipping Point of Home Performance Contracting

    July 1, 2006
    There are high quality HVAC companies across this nation that can truly be called comfort contractors, and they like being in the minority. Their jobs

    There are high quality HVAC companies across this nation that can truly be called comfort contractors, and they like being in the minority. Their jobs are sold as complete systems, where sizing, charge, and air flow are fully commissioned and delivered to delighted customers. They have stepped up from simply "swapping boxes," and are taking the time to educate customers on the complete value of high performance installations.

    Unfortunately, the majority of contractors are unable to break free of old habits and continue to do business as usual. It is faster and easier to just sell boxes, and to the homeowner, an installation is an installation. Yet, true comfort contractors know there are many sales opportunities and installation steps for a system to operate correctly. All of which are needed to deliver the performance the homeowner is paying for and expecting.

    There can be little doubt that the industry has heard this message and the informational tipping point of quality installations are certainly well established. If you don't know what I'm talking about — you may be an "old school Bubba."

    You can't be a leader in this industry without knowing that the key to delivering comfort and performance is in the installation. This is even more important with the new higher-efficiency equipment. Higher-efficiency equipment is even more demanding of high-performance installation, this has become increasingly obvious and costly with the 13 SEER mandate.

    No one likes callbacks — not the homeowner, not the contracting company, not the technician, and not the manufacturer. Installing to high-performance-standards is your best warranty against these lost margin callbacks.

    Energy Star is shifting its focus to include not only labeling high efficiency heating and cooling equipment, but also to promoting high-quality installation practices. Our message is increasing the focus on getting systems properly sized and selected, making needed corrections to the distribution system (before sizing), and confirming that both the air flow and charge meet manufacturer specifications. This is an order of magnitude more difficult than just selling Energy Star qualified equipment — both for the homeowner to understand, and for the contractor to deliver.

    Difficult, But Well Worth It
    High performance installations are widely discussed in the industry, and there are many opportunities for contractors to learn about advanced installations. Moving away from low-margin box swapping to high-margin, high-performance installation is a challenging business change, made all the more difficult by uninformed homeowners and low-balling "Bubbas."

    Energy Star is doing its part in tilting the tipping point toward high performance system installation. But it's time for you to educate your customers. Then your discussion (and price) on delivering quality Energy Star qualified equipment, that is installed correctly, will be better received.

    I can understand that some contractors are reluctant to listen to business advice from the government. That's fine, I was in your business once, and I know you're an independent lot. But, you don't have to listen to the government, just listen to your industry.

    I'm sure you're aware that Air Conditioning Contractors of America (ACCA) is leading an industry wake up call on quality contractors and quality installations. These specifications have been industry-developed and publicly vetted, and now are under review for ANSI approval. This will serve as the new "raised bar" of quality installations, and if I were still a contractor, I'd want my company to be on the high side of these standards, well distanced from the "Bubbas."

    Differentiate Yourself with Home Performance
    If you want complete differentiation from "Bubba," and even some quality HVAC contractors, you will need to move toward home performance contracting. It really is the next big area for service delivery, and HVAC contractors are best positioned to take on this challenge — you're in the comfort business, right? But why stop at the HVAC equipment when there's money on the table for a host of efficiency, comfort, and indoor air quality improvements that need to be addressed?

    You've done a Manual J, right? You've seen all the attic bypasses, poor ductwork, inadequate insulation, bathroom fan exhausts that dump into attics, leaky can lights, wet crawl spaces, moldlike substances, and old windows. You've heard the homeowner's complaints that the upstairs is always hot in the summer, how high utility bills are, and how the kids have bad allergies. Or, are you only just swapping boxes and maybe adding an ultra-violet light?

    It's time to take the bull by the horns and sell a total home performance packaged solution — one that makes money and truly delivers whole house comfort to your customer.

    Just Getting Started
    Home performance contracting is really just getting started in this country. But the timing to get involved couldn't be better. There's a perfect storm developing that home performance contractors will be in the best position to capitalize on:

    • homeowners are feeling greater pain with the increased utility rates
    • indoor air quality issues are big business
    • interest in all things "green and clean" is no longer just boutique
    • the public is seeing first hand the effects of global climate change
    • the inventory of homes that "don't work" is huge, and educated homeowners will pay for whole house solutions.

    HVAC is clearly the most technical and intensive of all the home performance endeavors. It's much easier for an HVAC company to move toward home performance (air sealing, duct repair, adding insulation, etc.) for an insulation company to deliver HVAC. On top of that, only the HVAC industry maintains a relationship with customers. When was the last time you heard from the guy that sold you windows?

    Home performance contracting is off to the races, most noticeably in New York, Wisconsin, California, and Texas. Within these states, and a dozen more, there are program sponsors running home performance with Energy Star programs. These sponsors partner with Energy Star to oversee a network of quality contractors, provide a quality assurance program for those contractors, and ensure the proper use of the Energy Star logo and report activity.

    Over a short period of time, more than 20,000 homes have been served the "whole house way." Indeed, there are HVAC contractors providing home performance contracting outside of these Energy Star programs — without any support or incentives — and they believe that it's clearly the way to do business.

    Today, there are knowledgeable contractors who can properly diagnose a sick house, then deliver comprehensive solutions that will make the house comfortable, safe, durable, and efficient. And, yes, homeowners are willing to pay for this service that ensures better indoor air and the piece of mind of reduced utility consumption of electricity, oil, propane, and water.

    Home performance contractors are meeting comfort needs by using building science to provide solutions that are too often glossed over or not understood. Take your HVAC business to new heights and rise above the "Bubbas."

    Now, how close are you to the tipping point?

    This article is based on the presentation, Get Green with Residential LEED and Energy Star, which Chandler vonSchrader gave at HVAC Comfortech 2005, held in Nashville, TN, Sept. 14-17, 2005. For more information about HVAC Comfortech 2006, which will be held September 13-16 in Baltimore, MD, call 216/931-9550. Learn from the leaders: In 2005, HVAC Comfortech presented more than 30 speakers providing educational seminars. All the sessions were recorded, and are available for purchase. For pricing and ordering information, visit the show website: www.hvaccomfortech.com