Increasing Focus on Building Efficiency Will Have Consumers Talking

“A house needs to breathe,” but how much does it need to breathe? Recently developed standards and increasingly affordable measurement tools have made it easier to answer that question with precision, and we’re now able to target one of the largest sources of heat loss/heat gain in existing buildings. Efficiency and weatherization are growing in mass-market appeal because they are a good investment – even in the short term. But, like geothermal heat, and unlike solar and wind, they are not a form of ‘conspicuous production.’  They do not necessarily sell themselves. Beyond dollars and cents, you need a way to ‘jazz up’ efficiency and weatherization for the wide range of your customers. You need to be able to justify building these services into a larger business strategy, so here are some things for you to consider:

Selling Efficiency

Beyond the money, your potential customers will often ask, “Why?” or “Why now?” Or they may say, “Why not a granite countertop first?” Or so many other things. To answer them, it helps to think globally, and locally. Building efficiency is essential to the nation, sure, but it’s also essential to the well being of local communities. It is, probably, one of the easiest ways of doing well by doing good.

To gain some perspective on how important building efficiency is, consider Germany. They’ve recently taken the lead in implementing new methods of construction and building retrofits, and that’s been both good for the environment, and great for business. Their net-zero energy homes are gathering worldwide attention. German leadership in this area may be a result of a particular fondness for the few remaining trees and wild lands in Central Europe, but more likely, it’s because Germans generally heat their homes with natural gas, and that gas comes from Russia. It’s easy to understand why Germany is encouraging construction that reduces dependence on a Russian export. Russia has cut or limited gas exports three times in recent years, mostly because of the conflict they’ve had with the Ukraine. The term “freeze to death in the dark” is more pithy when you translate it into German. That is a very local issue, and the Germans are inspired.

For the United States, the concern is somewhat less pressing. The natural gas we use to heat most of our homes and buildings comes from right here. Still, there is a widespread political consensus that we must kick our addiction to foreign oil. But how should we do this? Comprehensive energy reform has been challenging because we all use so much gasoline and diesel in our vehicles. Yet, heating and cooling our buildings accounts for an enormous portion of American oil consumption, and this is one of the easiest places to save energy. This is what made the ‘Cash for Caulkers’ and other fiscal support for weatherization programs so popular. It was also great for business.

Weatherization is a National Issue

Think about this: Nearly half of American crude oil comes from places outside of the Western Hemisphere. But no matter where the oil originates, American demand inflates the global oil markets, and that hands a windfall to nations such as Iran, Libya, Russia, Saudi Arabia, and Venezuela. High oil prices fattened the wallets of Saudi princes and princelings, who then proceeded to subsidize the growth of radical causes. High oil prices also revived the failing Russian economy, providing some of the investment capital necessary for the core of the former Soviet Union to rebuild its military and its arms industry. High oil prices give the Iranian government ready cash to pour into its nuclear development and those high prices also provided Venezuela the cash it needed to buy the latest Russian jets and tanks. And, not least, American oil dependence helps reinforce our concern to maintain political stability in the Middle East and Central Asia, a task perhaps better left to Sisyphus.

Public Money is Backing up Interest

Though these geostrategic concerns have generated significant national discussion about energy policy, much of the political support for weatherization and efficiency upgrades has occurred at regional, state, and municipal levels. Most notably, the U.S. Northeast recently embarked upon its Regional Greenhouse Gas Initiative (RGGI) Cap-and Trade program, with emissions permits first auctioned in September 2008. So far, the emissions caps only apply to power generation by utilities, but many of the ten member states have chosen to re-invest RGGI auction revenues in efficiency upgrades, particularly in the building sector. That’s good for your business. A number of municipalities, including New York City and Boston, have also embarked on efforts to upgrade and weatherize both private and public buildings. This is not a fad; this is real, and it’s very good for you.

And even without government support, improving building efficiency is a large market that has huge potential because the basic economics are sound. When you want to lower those heating and cooling bills, weatherization and efficiency upgrades give you the biggest bang for your buck. At current energy prices, investments in weatherization and building performance will yield returns approaching 50%, while increasing the equity in existing building stock, as well as the level of comfort for the people in those buildings. As with investments in solar, wind, or geothermal, not only is a $1 reduction in utility bills an extra dollar in a homeowner’s pocket, this reduction also increases the value of a residential property by $20. And, by contrast, insulation and air sealing is passive, requiring a minimal ‘owner’s manual’ once installed. That’s a story you need to share with your potential customers.

Industry Standards and Training are Increasing

Part of the reason that the weatherization and efficiency upgrades have become so attractive is the increasing sophistication of building energy standards. Credit the efforts of the Building Performance Institute (BPI) and a range of National Laboratories for this. They’ve generated standards and benchmarks that lend more certainty to those weatherization and retrofit projects.  The most significant of these is the new focus on air movement (air infiltration and exfiltration) as a predominant source of heat loss/heat gain in many buildings. At the same time, there has been an increased focus on techniques to tighten up these buildings, and the development of diagnostic instruments to measure the success of these techniques. This is the work that trained professionals are getting. This is the work that you will get once you’ve received the proper training.

These technical changes have arrived just in time to join a changing political and economic environment, and that’s giving a wide range of businesses the opportunity to market and implement efficiency projects. These projects are a great investment for the consumer. They’re competitive with other portions of a wealth-management portfolio, and they are much more of a sure thing. Over the long term, energy prices will trend upward, likely outpacing overall inflation and economic growth. Increasing commercial usage of instruments to measure airflow and heat loss – infrared meters and the blower door – help quantify the risks and rewards of a building efficiency retrofit. The time to act is now. Building owners are usually good business people. They understand the significance improved efficiency has on the bottom line. They’re thinking globally, and locally. This is your chance to get that business. Act now by getting the training you’ll need. Show them how they can invest in efficiency and you will prosper, even in these difficult times.