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HVAC Contractors Create a Sustainable Home Performance Business Model

Oct. 5, 2016
Btu delivery by more than 50% with little or no increase in power consumption. In other words, the new methods achieve real, measurable energy savings.

Progressive HVAC service companies are dominating the home performance market. How? By circumventing traditional channels and building on-going business relationships with customers. Let’s take a look at how home performance inspections, testing, and repair options offered through annual home performance service agreements contribute to this dominance.

HVAC Consumes the Most Power

First things first; when it comes to existing homes, everybody knows the HVAC system sucks the most juice. Because of this fact, we should invest more time and effort in the home’s HVAC system. HVAC service companies control this segment of the market.

Traditionally, the home performance industry prescribes duct sealing and installing new high efficiency equipment on almost every home and ticks boxes on modeling software to prove energy savings.

Today’s HVAC testing and diagnostics have proven this outdated approach fails to deliver the calculated savings promised. It also leaves massive system performance defects undetected. New methods of system renovation are
increasing heating and cooling system Btu delivery by more than 50% with little or no increase in power consumption. In other words, the new methods achieve real, measurable energy savings.

This revolutionary approach gives HVAC service companies a significant competitive advantage. By combining effective HVAC system testing, diagnostics, and performance scoring, HVAC service companies can convince homeowners they can deliver comfort, safety, and efficiency. Customers will see that their project should start with the biggest energy hog first: optimizing air conditioning and heating system performance. Then move to basic building envelope repairs.

Testing - Audits are dead

The idea that a full audit is required to assess the efficiency of a home was the brainchild of utility and government energy programs. Few homeowners need or understand an audit and even fewer have the stomach to endure such a lengthy science experiment.

The new home performance testing and diagnostics model addresses customer concerns and needs. It requires an initial interview and around 45 minutes of system investigation and testing. Homeowners can take part. The contractor’s ability to identify needed testing takes skill and observation and is a combination of basic HVAC performance testing and elementary thermal envelope diagnostics.

This simple testing includes hands-on investigation. Visual testing helps your customers discover the defects in their home and HVAC system for themselves. When testing includes teaching, your customers “see” what upgrades do, and they sell themselves on paying for the necessary improvements.

For example, well thought-out temperature testing with an infrared thermometer makes visible the missing insulation between stud bays. A thermal bypass can be found by an amateur with an infrared camera after a quick one minute lesson. A child’s pinwheel can make duct leakage or room pressure imbalances visible. Temperature change measured from the equipment to the farthest supply register makes hidden duct temperature loss visible.

Become a teacher, not a tester. The simpler the teachings, the more truth your customers can absorb, the more likely they want the repairs made.

What’s Replacing Audits?

Annual home performance service agreements are beginning to replace energy audits. These annual inspections, coupled with simple testing, produce an ongoing supply of affordable energy upgrades conforming to the decisions and budget of your customer.

A long-term relationship producing high margin annually recurring sales is the time-proven benefit of annual home performance service agreements. Where did this idea come from? This is how HVAC service companies have served their customers for many decades. The secret is the relationship and trust built over many years through renewable service agreements.

Annual home performance inspections allow a customer to learn about and consider needed upgrades each year. Such inspections also enable contractors to develop two-to-five-year home performance improvement plans with their customers. Plus, offering such annual agreements enables HVAC service companies to schedule work during the mild temperature seasons of the year. Smaller improvements like LED lights, water reducing treatments and appliance upgrades can be completed by home owners as their time and budget allows.

Annual home performance service agreements can also help homeowners create and follow-up on their goals and upgrade plans. This further deepens the relationship between a service company and customer, uniting them in reasonable long-term objectives. Compare this relationship to a one-shot home performance contractor. Can you say sustainable?

Repair Options – Just Pick the Low Hanging Fruit

Many home performance contractors push for whole-house upgrades in the $25,000 to $35,000 range and higher. Energy audits encourage an all or nothing mentality enforced by a sense of guilt and an obligation to save the world.

While this “whole-nine-yards” approach appeals to only a few percent of homeowners, it is undesirable to more than 95% of the population. Because of this all-or-nothing approach, the home performance industry has evolved into an unsustainable business model.

A long-term plan, sustained by annual home performance service agreements, allows for a home to be improved over time, starting with the low hanging fruit -- optimizing the performance of the existing HVAC system. Again, this is where the greatest savings are available at a relatively low cost. Next is increasing the effectiveness of the building’s thermal envelop. Air sealing and increased insulation is simple and cost effective.

Many other energy upgrades are nice to have, but rarely offer the quick payback desired by most homeowners. Through an annual service agreement, goals can be set and reviewed each year with the customer.

Decisions for comfort and safety upgrades are what drive homeowner’s decision to upgrade. Energy and money savings help justify the decision, but are rarely the prime motivation.

Homeowners love to buy upgrades that are meaningful and solve issues such as uncomfortable rooms, newly discovered health and safety issues, annoying noise problems, and evidence of poor filtration.

The energy efficiency programs of the past were based on measures that modeled energy savings based on a wide swath of assumptions and weird science estimates. This science has run its course. Few of these measures had consumer appeal, except to display an environmental badge of honor for the few who could afford it.

Realistic home performance services are a plug-and-play addition to annual HVAC serve agreements. We own the relationship with our customers already. Home performance services, offered on our usual terms, are far less technical than what we do day-to-day. Most importantly, our customers need and want these basic services.

Rob “Doc” Falke serves the industry as president of National Comfort Institute -- an HVAC-based training company and membership organization. If you're an HVAC contractor or technician interested in a description of a home performance service agreement, contact Doc at [email protected] or call him at 800-633-7058. Go to NCI’s website at nationalcomfortinstitute.com for free information, articles and downloads.

About the Author

Rob 'Doc' Falke | President

Rob “Doc” Falke serves the industry as president of National Comfort Institute an HVAC-based training company and membership organization. If you're an HVAC contractor or technician  interested in a building pressure measurement procedure, contact Doc at [email protected]  or call him at 800-633-7058. Go to NCI’s website at NationalComfortInstitute.com for free information, articles and downloads.