Grow Your Performance Contracting Revenues

With a well-trained, properly outfitted, and certified home performance contracting company, you can set your self head and shoulders above the competition and have access to new revenue streams.

September 04, 2009
September/October 2009
A version of this article appears in the September/October 2009 issue of Home Energy Magazine.
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Once you become a trained, outfitted, and certified building performance contracting company, you can put yourself in a position to take advantage of new revenue streams that you probably could not access before. These include building retrofits and new-construction projects that require some or all of the following:
  • higher-quality workmanship than is required for “average” or “code-compliant” jobs;
  • compliance with program installation standards requiring attention to detail;
  • test-in/test-out documentation using diagnostic equipment and protocols, such as blower door tests and duct tightness testing;
  • zonal pressure balancing and/or air balancing of distribution systems; and
  • combustion appliance safety tests.

Investor-owned utilities (IOUs), municipals, and electric cooperatives all need contractors who can meet their standards and are willing to help introduce their programs directly to the public.
How can you take advantage of the demand for these types of service for these services in your area? First, identify all the entities in your area that need quality contractors in order to meet their goals. If you can deliver performance that meets or exceeds their standards, they will probably send you business. At least, you will make their list of qualified, or program-partnering contractors. Here are few examples of these entities:

Utility Efficiency Programs

Investor-owned utilities (IOUs), municipals, and electric cooperatives all need contractors who can meet their standards and are willing to help introduce their programs directly to the public. Some of these programs require pre- and post-testing with specialized tools, such as blower doors. This holds true especially for Home Performance with Energy Star programs. Whether your specialty is insulation, air sealing, heating, A/C, or ductwork, some of your local utilities may have efficiency programs that you can participate in. Many of these programs offer “incentive coupons” or rebates to their residential or commercial customers. These rebates encourage the customers to buy services from you by discounting their bottom-line costs. Some utilities offer attractive loan programs or financing plans to motivate the customer to purchase your services. Some programs offer free or discounted energy audits, some refer customers to independent program-approved energy auditors, and some simply send customers to a list of qualified contractors.

For a quick example, one insulation contractor in my local utility program continually beats out his competition merely by calculating an insulation discount coupon, which takes him about three minutes. Other insulation contractors are reluctant to get involved in the program because of “the hassle”—until they lose enough work to him. Once they get into the program, they can’t believe how easy it is, and they immediately increase their closing rates.

If you are not already aware of programs offered by local utilities, check out their Web sites or call their customer service departments. Find out which programs you can participate in, what their processes and marketing efforts are, and what you need to learn or acquire in order to participate, such as diagnostic tools, skills, insurance coverage, licensing, certifications, and so on.
 
Stimulus Fund-Driven State Energy Office Programs

Most state energy offices are clamoring to spend several million dollars in new funding, and will need to spend the money within the next year to two. They are likely to need as many qualified contractors as they can find to help them meet their goals. By the time you read this, your state’s energy office should have their programs approved, so check out their Web site or give them a call. Some of these programs may be new, and some may be expanded versions of existing programs. The plans for spending these funds had to be developed quickly, and some may be quite innovative, so there will be a wide range of programs offered, and some may surprise you.

DOE-Funded State Weatherization Programs

The states have received substantial budget increases for traditional low-income weatherization; some budgets are up 2,500% or more. In addition to these overall budget increases, the average limit that say how much you can spend per house has more than doubled, and the qualifying income levels of those they can serve have increased substantially as well. The local Community Action Agencies will need to increase their infrastructure to handle the new volume of business, and will need energy auditors and contractors who can meet their standards. Identify and call your local Community Action Program (CAP), Community Action Agency (CAA), or Community Development Corporation (CDC) to find out about their needs and requirements. If you’re not sure who they are, contact your state Department of Health and Human Services, Department of Economic Development, or Department of Energy. You may be able to find out from one of these departments who your local agencies are; most of them are funded by one or another department of your state government. Some of these agencies have crews that do their own work, and some sub out the work to independent contractors. However, with the new level of volume, even those who have traditionally done their own work may need to start contracting some of it out.

Energy Star New-Home Builders

Energy Star home builders have weathered the slump in the economy better than conventional builders, as home buyers continue to demand and seek out verified higher performance and lower energy bills. In fact, many of these builders have actually expanded their businesses over the last year. Energy Star builders need competent subcontractors who can deliver tight duct systems (< 6 CFM leakage/100 square feet of floor area), and verified Air-conditioning and Refrigeration Institute (ARI)-matched systems. New whole-house ventilation codes and standards require in-depth knowledge of these systems. Energy Star homes and tax credit verification both require ARI-matched systems that meet minimum energy efficiency ratio (EER) as well as SEER, and odd as it seems, some contractors are challenged by that little detail. Builders hate having the job slow down for any reason, especially because a sub fails to pass any kind of requirement. If you have your own Duct Blaster and can verify compliance before the HERS rater verification test, this puts you in a good position to get all of the builder’s work. Builders also need framers and insulators who can comply with the rigorous demands of the thermal bypass checklist by properly framing and backing up chases, offsets, dropped ceilings, and between-floor connections to unconditioned space. If you deliver insulation, learn how to recognize and remedy problems in these areas, and you can take the business away from ordinary insulators. Search for Energy Star builders in your area, or check with a local certified HERS rater who does verification inspections for the builders to find out who is active.

Architects or Project Managers for LEED Projects

Construction projects certified by Leadership in Energy and Environmental Design (LEED) may require tighter-than-average ducts, or specialized HVAC systems. Check to see what the local LEED-certified projects are. Talk to the architects or the project managers, and find out what is required to deliver the goods.
 
Tax Credits

Research the energy efficiency program requirements for heating, A/C equipment, and other energy improvements. Use the requirements for getting a tax credit to help close the deal, or to upgrade your services to comply. You can get all the inside scoop at www.energystar.gov/taxcredits. Be sure to put a link on your Web site to this address, and learn the credits available for each service you deliver. Then figure this into the payback, along with the energy savings. Every little bit helps!

Once you establish your relationship with some or all of these partners, build out your Web site and provide links to their sites. The more energy-related and quality-related connections you have, the higher your customers will rate your credibility, your perceived value, and your reliability. Then start taking advantage of the skills and services you offer to those who need them the most.

Joe Kuonen manages residential and commercial energy conservation programs for utility clients on behalf of CLEAResult Consulting, Incorporated, in Little Rock, Arkansas. He is a licensed HVAC contractor and conducts trainings nationwide in building performance services, sales, and contracting.

For more information:
CLEAResult Consulting, Incorporated
Tel: (501)265-0249
Cell: (501)772-1648
Fax: (501)265-0189
E-mail: jkuonen@clearesult.com
Web site: www.clearesult.com.

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