States Onboard
Even if you think you can just go about business as usual, your state may be one that will soon require home performance specialists on construction jobs. For example, 70% of the municipalities in Massachusetts adhere to the Stretch Energy Code. One of its requirements is that all new construction have a HERS rater on the job from pre-construction to methods inspection to final rating. For anything other than a “true, whole-house renovation,” remodelers in Massachusetts can use a “prescriptive method,” says Dave Bryan of Blackdog Builders, in Salem, N.H. The remodeler commits to doing a renovation that uses established energy-efficient best practices, and then, “before the Sheetrock, a [municipal] inspector checks that you’ve done what you’ve committed to,” Bryan says. “They want to confirm that your work goes beyond the previous code.”
To DIY or Not to DIY
There are two basic models for home performance work in the remodeling industry. Which of them you choose depends on your company goals and clients.
1. Going in alone: The remodeler/general contractor carries out both the assessment and the retrofit. (Read about becoming educated in building science.)
This model requires either retooling your entire business to have a home performance focus, or creating a separate division as Portland, Ore., and Seattle remodeler Neil Kelly has done with its Neil Kelly Home Performance division. Either approach is an expensive undertaking. Neil Kelly decided to create a separate division since “it’s a specialized trade,” says Chad Ruhoff, general manager for Neil Kelly Home Performance. “While we work with remodeling often, we work with different crews, salespeople, and production staff.” And rather than creating a separate LLC, “there are efficiencies in having one entity,” he says.
2. Close allies: A home performance specialist does an assessment and a remodeler/GC does the suggested retrofit work.
But, as Bryan points out, it’s difficult to work with a home performance specialist as a subcontractor because you’re essentially “paying retail.” And because most such specialists work directly with homeowners, when they work with your company you then have to mark up on top of that cost—and clients aren’t too happy about paying for that.
While homeowners no doubt want to save money, “When faced with the option of doing something environmentally friendly or getting stainless steel appliances, [clients] opt for the bells and whistles,” he says. “We don’t want to lose a project because we’re beating the energy-efficiency drum.” So Blackdog Builders recently partnered with Dr. Energy Saver, a national network of “home energy experts.”
What Bryan does through his Dr. Energy Saver dealership, he says, is “sell comfort.” He doesn’t charge for an energy audit—“it’s a vehicle to get into clients’ homes,” he says, “it’s a sales tool.” After the assessment, Blackdog provides clients with a shopping cart of options to select from. Each solution has an individual price. Then Blackdog employees, riding in a Dr. Energy Saver truck, install the solutions.
Conversely, the Dr. Energy Saver business has its own sales staff and also sells jobs without Blackdog’s input. Dr. Energy Saver offers marketing strategies and has a lead component. Bryan buys products and solutions from the company; that’s where Dr. Energy Saver makes its money, Bryan points out, rather than charging fees through a more complex franchise structure.
And there are turnkey home performance franchises as well, such as Green Homes America.