But get Kelly talking about the weatherization division that Neil Kelly Co. started four years ago and you can see where his passions lie. “I’m a person who believes that global warming will continue to get our attention in ways we don’t even understand yet,” he says. “There’s a tremendous amount of satisfaction in being a part of the solution to that.”
Kelly also likely finds tremendous satisfaction in the business that retrofits have brought into the company his father started in 1947 with a $100 investment: in 2009 NKC pulled in $480,000 in home performance jobs. In 2010 that number was $1.3 million, and Kelly indicated that after a lengthy appraisal of jobs on the horizon, 2011 is going to double last year’s numbers. “Like everyone in the industry, we’ve been pretty challenged by the economy,” he says. “Business revenues have been down substantially, but things are starting to pick up now. Between having the home performance division and acquiring a business [ Seattle Design Build] in Seattle, I’m finding my way out of this damn recession.”
That way out would not have been so easy had it not been for the incentive programs that are encouraging Oregonians to green their homes. The Energy Trust of Oregon provides incentives to consumers that are financed through monthly utility bills from Portland General Electric, Pacific Power, NW Natural Gas, and Cascade Natural Gas. Aside from the cash payouts that homeowners receive, there are also a variety of tax credits for most of the upgrades.
Kelly also works with Clean Energy Works Oregon ( CEWO), a statewide program that began in Portland as a direct result of $20 million in American Recovery and Reinvestment Act funding. “We just got out of the pilot program,” Kelly said, “and that is what launched us up to the $1.3 million in business.”
CEWO is a public-private alliance that also enlists the help of Energy Trust of Oregon along with utilities, financial institutions, local communities, and contractors. Kelly explains CEWO as a revolving loan fund seeded by the federal dollars. A homeowner borrows money through banks (and in some areas, credit unions), securing the loan through a lien against the house being retrofitted. “It’s a reasonable interest rate (no more than a 5.9% APR) and the lien can be transferred to a new owner,” Kelly says. In some cases, the loan payment is added to the consumer’s utility bill.
The rebates are capped at $3,750 but only if there’s a 30% energy savings, according to Kelly. The rebate amount drops as the percentage of energy saved drops. The bank pays the contractor when the job is completed. “As the consumer pays off the loan, that re-funds the program to keep funding additional loans,” Kelly explains.
Kelly says that the only CEWO requirement for contractors is to have at least one employee certified by the Buildings Performance Institute. He adds that he knows of some smaller contractors that have partnered with companies experienced in energy-efficient retrofits as well as larger companies that have acquired companies with a home performance background.
Kelly firmly believes that the energy-efficient retrofit industry is not a fad. “This industry will be around and we will be back in those houses again in 10 years to do a deeper retrofit due to global warming, but again, that’s just my theory,” he says. “The reality of it is energy prices are going to keep going up, and based on that and global warming, deep energy retrofits will be the standard in 10 to 20 years, if not sooner. Any remodeler not getting into this business is going to be left behind.”
This is a longer version of an article that appeared in the June 2011 issue of REMODELING.