Get Going On Energy-Performance Contracting

Originally published: 08.01.11 by Terry Tanker

Whole-home/whole-building performance contracting is an increasingly important topic of discussion for our industry. On the surface, it's an opportunity for HVACR contractors to expand and grow their businesses. I's also an opportunity to add value to your business offerings by making customers more comfortable while reducing their energy consumption and costs.

The concept of whole-home/house and whole/business performance is relatively new to most customers and has been defined in various ways. Here's my definition of whole-home/building performance contracting: The re-engineering of existing structures to reach the highest levels of comfort, health, safety, and energy efficiency.

Many independent groups and the federal government are working in this area. Some have flourished, such as EPA's Energy Star program and the U. S. Green Buildings Council (USGBC) and its Leadership in Energy and Environmental Design (LEED) rating system. Others have not done well and have added to confusion regarding standards and certifications. Contractor magazine's editor Bob Mader just wrote a great piece on this, "The Murky Insiders World of Washington Energy Efficiency Politics." Check it out at on his blog, One important takeaway from his article: You need to be involved and up-to-date on this issue.

Sooner or later standards and certification issues will be defined, resolved, and issued. Meanwhile, an abundance of opportunity exists for the astute HVACR contractor. Energy audits — also called evaluations — typically center around air sealing, insulation, radiant barriers, ductwork, heating and air conditioning, water heating, lighting, water conservation, windows and doors, and appliances and home electronics. I'm sure these categories are familiar to you. According to Larry Janesky, owner and co-founder of Dr. Energy Saver, (see my 20 Questions interview), a typical home will use energy in the following ways: 43%, heating and cooling; 12%, water heating; 11%, lighting; 9%, computers and electronics; 9%, appliances; and 8% for all other.

According to Janesky, after his firm conducts an energy evaluation, they will remedy the problems they find for ticket prices as low as $1,500 and as high as $100,000. And, as energy prices continue skyrocketing, payback periods for these services drop considerably. As we all know, installing the highest performing heating and cooling system money can buy means little if ducts leak, attics and crawl spaces are not insulated, and windows and doors are not properly sealed. To maximize a home or building's energy efficiency, it must be viewed as a total system and not as individual pieces and parts.

Performance contracting, quality contracting, energy evaluations — whatever it is being called at the moment — opens doors and expands opportunities for HVACR contractors. Given the relationships you have with your existing customer base, making a move to offer these additional services is a natural business progression.

So what do you need to do? I like Janesky's approach: "The business goes as the owner thinks. When you get it right, by owning a successful business you can make the world a better place for customers and employees. There is no higher calling." This translates to get involved — then get your employees involved and, finally, get your customers involved by educating them on the enormous potential to not only save considerable dollars on their energy bills, but keep their homes more comfortable, sustainable, and safe. Now that's a business opportunity worth pursuing.

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