Jan. 19, 2010, Las Vegas – Energy efficiency retrofits—like installing programmable thermostats, beefing up insulation, and sealing ducts—are keys to upselling customers on other remodeling projects in this depressed housing market, New Jersey remodeler Bill Asdal told attendees at the International Builders' Show.
During a session on energy-efficient upgrades and programs, the owner of Asdal Builders said professional builders and remodelers can immediately profit from offering energy efficiency testing services, because they are in demand and because "people are offering testing services that don't know anything about building."
Still, most important is building confidence with clients. Once the pro builds a relationship and gains the homeowners' trust, he can sell them on additional services. "The epicenter of the housing industry is relationships," Asdal said. "You can make people do things because of relationships. We need to preserve relationships."
"Give them good information ... and keep on serving them well, and they will keep trusting you," said Asdal, a National Association of Home Builders Remodeler of the Year. "If they trust you, you can upsell them."
Lew Pratsch, of the Building Technologies Program at the U.S. Department of Energy (DOE), said during the panel discussion that energy retrofits are paying off handsomely for some pros. For example, he noted that one Oregon firm, Neil Kelly Design/Build, anticipates that 60 percent of its jobs in 2010 will be energy retrofits.
Asdal said there are three ways to reduce a home's energy costs:
1. Influence consumer behavior.
2. Suppress energy consumption with a range of low-cost solutions.
3. Install advanced technologies.
He further commented that persuading homeowners to use compact fluorescent bulbs or install a programmable thermostat is relatively easy. "Everyone should have a programmable thermostat," Asdal said, noting that the payback in utility savings is only 1.3 years.
But, the remodeler said, sometimes it's difficult to influence some consumer behaviors. For example, one client refused to give up her 1977 top-mount refrigerator even after Asdal offered to pay for a new one.
Meanwhile, convincing homeowners to install advanced technologies—such as photovoltaic panels or geothermal heat pumps—is difficult because of the high initial costs. But, he continued, pros should focus on the energy savings and health benefits to the home's occupants, and not the return on investment.
In order to upsell clients, Asdal advised, the pro should discover what criteria are most important to them, including initial cost, life cycle cost, social responsibility, contractor and peer pressure (keeping up with the Joneses), and warranties. And although homeowners may have other ideas, he said pros' energy upgrade priorities should be, in order:
1. Pre- and post-testing
2. Air sealing
3. Beefing up insulation
4. Mechanical upgrades
5. Appliance upgrades
6. Envelope enhancements
7. Electrical control upgrades
8. Mechanical redesigns (solar hot water and photovoltaic and wind technologies)
One contractor in the audience asked if Asdal felt there was a conflict of interest—real or perceived—for doing energy audits and then performing the retrofit work. Asdal replied "no," because pre- and post-testing services are still so new.
Also during the session, Pratsch said pros aren't doing enough to promote energy retrofits—and thus boost their bottom lines. "You've got to go out and speak about the benefits," he said. "Sales and marketing are very important."
Pratsch concluded his comments by saying that green retrofits are "the best growth opportunity in the housing industry," but added, "we don't know how to do it to scale." He said that there are about 25,000 whole-house energy retrofits completed annually, but that 1 million homes per year need upgrades before the United States witnesses significant nationwide energy savings.
"It needs to be done on a production builder basis," he said.
Jean Dimeo is chief editor, online, for EcoHome.