This year has seen a virtual explosion in energy audits - from the number of auditors to the companies that offer training and certification. Contractors involved in this market are sounding back with mixed reviews on its profitability. In general, though, they are finding opportunities ahead.

In some ways, it’s reminiscent of the early days of mold and IAQ remediation - lots of players providing varying degrees of value, and consumers who need to be taught where true value resides.

According to Larry Taylor, president of AirRite Air Conditioning Co., Fort Worth, Texas, “The guys that are trying to do the free energy audits, they’re trying to sell whatever they have, like windows or insulation.” His company charges a fair rate “with a HERS rater who takes specific steps.” (HERS is the Home Energy Rating System Program, established to rate a home’s total energy efficiency using an established rating system, carried out by a certified rater.)

This market is at risk, he said, from fly-by-nighters offering fake, “free” audits, which can lead to a loss of consumer confidence. “The barrier for entry in this new market is too low,” Taylor stated. “You should have to be a HERS rater, pass an entry exam, and do five houses showing that you can do it, use modeling software licensed through a provider, and have the end results rated and verified.”

ESTABLISHED ADVISOR

Taylor said he belongs to a home performance MIX group. “The biggest thing that they said was to have a change of attitude; you are no longer an HVAC contractor. You become more of an energy contractor/advisor,” he said.

“Selling boxes is a commodity market,” said Taylor. His company now deals with the house as a system.

“We bought our first infiltrometer in 1991, when we started getting into the building science side of it.” Over time, the investment grew to include infrared cameras, five or six blower doors, training, and certification. “Free” audits do not reflect this kind of commitment.

“We know that every time we sell an audit, we can get $15-20 worth of work for every dollar spent on the audit. We provide real solutions to real problems. My fear is that the energy market will be commoditized,” Taylor said. “We give them a fair value for a fair price.”

While he said he is against “all the unnecessary certification,” one thing he hopes to see more of is validating performance in addition to the audits. “We’ve got to get third-party testing and validation.”

JUST STARTING

Rich Morgan, president of Magic Touch Mechanical Air Conditioning-Heating-Energy Audits Inc., Mesa, Ariz., said he has “mixed emotions regarding how energy audits are working out. We started researching, purchasing equipment, marketing, earning certifications, getting involved in organizations, etc., about two years ago. There is a tremendous amount of ground to cover in this arena, so it is certainly no overnight success story.

“Most of the members of my ACCA MIX group are ‘big dogs’ in the home performance arena in their markets who have been at it for many more years than us,” he continued, “so we expected the challenge, based on their experiences and mentoring.”

He said the company has invested around $100,000 in its energy audit efforts in the last 12 months alone, “and are still far from seeing the return yet, but indications are it will explode soon enough, and our efforts will pay off as we will be able to say we led the charge.”

Year-to-date the company has conducted approximately 100 audits. “About 25 percent of our clients are investing in recommended repairs, the largest of which has been duct sealing thus far.”

The company’s goal for the same time period next year is 400 audits at a 35 percent closing rate. “As the utilities catch up with rebate programs,” he said, “consumers become more aware of the benefits, and God willing Home Star passes its next phase, we see huge potential and think it will outperform the HVAC side of the business, as well as complement that side of the business.”

The company also will increase its home performance marketing efforts next year, “so we think that will make all the difference.”

A FEW YEARS IN

On the commercial HVAC side, mechanical contractor J.C. Cannistraro Inc., Watertown, Mass., has been self-performing building performance analyses for the past two or three years.

According to service manager Bill Fleming, energy audits have been harder to promote in the past year, especially in the down economy. “Over the past year, owners have been more selective in their energy investment decisions,” he explained. “In this economic climate, owners place even more importance on ROI.”

But the bottom line is, “Reports do not lie,” he said. “Energy savings are truly available for most buildings.” For example, in a 55,000-square-foot building, “We found $17,000/year in available energy savings by performing a full building energy analysis,” he said.

“Another savings opportunity that gets forgotten about is the potential for energy rebates,” Fleming said.

“That same 55,000-square-foot building yielded almost $10,000 in savings from rebates alone.”

He cited the following ways to improve a building’s energy efficiency “within the range of any budget”:

• Stand-alone Energy Star® benchmarking.

• Full-service building energy analysis.

• Upgraded energy service agreements.

“The clients that are most receptive to the idea of an energy audit tend to be building owners with large tenants who are looking to renew their leases,” Fleming said. “Often times these owners are searching for ways to lower their energy costs and we come in and help them out.”

Large, owner-occupied properties benefit from energy audits, he said. “Energy is a significant expense in any building, and energy savings help boost the bottom line.” The main incentives driving building owners to get audited include the fact that “Many facilities are looking to capitalize on utility company rebates and stimulus/ARRA (American Recovery and Reinvestment Act) funds. Owners and property managers continue to seek out LEED EB credits as well.”

The most common findings, he said, include ineffective controls systems, IAQ issues, inefficient lighting plans, and inefficient economizer operations. “These are just a sampling of the types of problems that can be identified,” he said.

“We like to say that there is an opportunity for energy savings in every existing building and the energy analysis is just our first step,” Fleming said. “This is our way to first find out what the building is doing. Next we look at the facility’s equipment and controls systems. Many of these energy audits and systems checks can lead to cost-effective infrastructure improvements that provide the owner with a short ROI.”

Clients who are most likely to act upon that information are those who are “the more financially savvy, fiscally minded buyer that sees the future value of energy audits and infrastructure upgrades.”

Like the residential side, there is an investment to make. “With any new endeavor, there is a learning curve and a cost associated with it,” Fleming said. The company incorporates the Energy Star benchmarking system in all of its building performance assessments. The company is also an MSCA Star-qualified contractor.

Publication date: 08/16/2010