While HVAC companies have traditionally found growth through the addition of plumbing and electrical divisions, more and more contractors are capitalizing on home-performance opportunities and adding insulation work in-house.

“Insulation is one of the biggest drivers to make the home perform,” said Rob Minnick, CEO/president of Minnick’s Heating and Cooling in Laurel, Maryland.

As a result, HVAC contractors specializing in home performance have found great growth opportunities through their added insulation services.

Rich Morgan, president, Magic Touch Mechanical Inc., Mesa, Arizona, began offering insulation through his home-performance services in 2007. With seven years of experience, he’s well ahead of the curve. “We are delighted to have brought insulation in-house, as we are in complete control of both the customer experience and the job quality,” he said.

Bringing Insulation In-House

As HVAC contractors branch into home-performance services, they quickly discover there is a lot to learn about insulation. Those who’ve made the jump frequently encourage contractors to partner with a nearby HVAC contractor as they start to work in this field. But, finding a good insulation partner isn’t always
an easy task.

“We began offering insulation services shortly after we started in the home-performance contracting field,” Morgan said. “When we started, we teamed with an insulation contractor.”

However, the partnership didn’t last.

“Due to scheduling conflicts and the fact that we couldn’t completely control the customer experience working with another contractor, we ended that partnership. We now have our own in-house insulation installers,” Morgan said.

Currently, Magic Touch Mechanical employs four insulation installers (two crews of two men) and three people who have the ability to sell insulation.

According to Minnick, his company got into insulation by hiring outside insulation experts. That way, the company was able to offer insulation services as part of its initial plunge into home-performance contracting in 2008. Then, last year, the company redirected some of its current employees into insulation services through new training.

“Our HVAC installation crews learn and do the [insulation] installation as they are at the home doing other tasks as well,” he said.

According to Minnick, this cross-training works well, since there is a symbiotic relationship between HVAC and insulation.

“Ninety-nine percent of the jobs involve both,” he said.

Investing in Training and Tools

Since insulation is a brave new world for HVAC contractors, they must be willing to make the commitment through education, training, and tools.

The most basic principle that contractors must understand is that insulation is ineffective without air sealing, according to Michael Goater, cofounder at Success4others LLC, an authorized training partner for Comfort Institute Inc.

“The first thing we all need to understand is that insulation without air sealing is of little value to the homeowner and the contractor,” he said.

According to Goater, one of the problems in this field is that many companies are simply blowing insulation into attics without properly sealing homes.

Goater explained, “The most important aspect to focus on is the test-in and test-out process to ensure the air sealing has been properly performed prior to insulating a structure so that the insulation is actually effective.”

Michael Rogers, president of Omstout Consulting LLC, also stressed that HVAC contractors need to be educated on best practices in insulation.

“Learn how to do it right. When you say ‘insulation,’ you really should be talking about air sealing and insulation. There are many organizations that offer training on what the issues are,” he said. “Look for someone who can also show you how to do the air sealing and the installation properly.”

At Magic Touch Mechanical, Morgan has certainly invested time and money into insulation training and equipment. “It has been a process over the years to get to the level we are at today,” he said.

“I would estimate we have done about 150 hours of training in insulation best practices, product knowledge, estimating classes, and hands-on demonstrations,” he continued. “I would estimate our investment in equipment and training is in the $30,000 range.”

In addition, Morgan requires his installers to be certified.

“We require all of our installers to earn BPI [Building Performance Institute Inc.] Building Analyst and BPI Envelope Specialist certifications. We feel it’s important that the technicians installing improvements to a home, such as insulation, understand the building science behind it. We have found this also makes for happy employees, which equals happy clients,” he said.

As with learning anything new, Morgan said the more experience his techs gained, the better they became at insulation jobs.

“I wouldn’t say it was a hard learning curve so much as we learned how to increase productivity and estimating accuracy simply by doing more jobs,” he said. “As most of our installers were already trained and certified in home performance, they already understood the how and why of what they were doing, and it was really only a matter of becoming familiar with the different types of insulation equipment we use.”

While there are many new tools that home-performance contractors must become familiar with, according to Morgan, the most useful insulation tool is an infrared camera. “The infrared camera is a great visual tool for both estimators and consumers in identifying and explaining areas where insulation is either insufficient or misaligned,” he said.

Facing Challenges

Although there are great opportunities available to HVAC contractors who decide to expand into home performance — and, specifically, insulation — there are also challenges that accompany these additional services.

Minnick noted that one of the biggest challenges, as with any new product a contractor decides to sell, is finding the right insulation product and company to partner with.

Another challenge, again common when adding any new service, is training the sales staff on how to sell it. According to Rogers, contractors need to make it easy for their sales advisors to offer insulation and air sealing and “get their buy-in.”

Scheduling and staging the work at a customer’s home can also present hurdles, according to Morgan. “The greatest challenge has been having enough manpower to cover all of the different aspects of home-performance contracting and staging the schedule to remain efficient and not be cumbersome to the client with too many visits or too many hours on the job to complete all the different improvements they chose,” he said.

Rogers said the advice he gives contractors is to use specialized crews. “You won’t gain efficiencies by having each of your HVAC installers dabble in insulation and air sealing. Wait until you have the volume to keep at least one crew busy 100 percent of the time. She can pull in help for the insulation as needed — you’ll need two people for the insulation — until you’ve got enough volume to keep a two-person crew busy.”

And, as an additional tip, he recommended, “Cross-train your insulation crew to assist with HVAC, and you’ve got a built-in production boost for the busy August season.”

Customizing for Climate

Just as the popularity of certain types of HVAC equipment varies by region and climate, so does insulation. And, just as each home’s HVAC system can require a unique installation, so, too, can the insulation. “It really does vary by home,” Morgan said.

Common types of insulation include loose-fill or blown-in cellulose, fiberglass, and spray-foam polyurethane. Each of these can be used for different insulation applications in a home, depending on its unique needs and location. (For more information about common types of insulation, see the sidebar on page 7.)

Insulation is rated by its R-value, which the EPA defines as a measure of its ability to resist heat traveling through it. As part of the Home Performance with Energy Star program, the EPA provides an online map and table, available at http://1.usa.gov/1lLGrs4, that depicts recommended levels or insulation by R-value for different regions and climates.

Where Morgan’s company operates in Arizona, he said, “By far, the two types of insulation we install most often are loose-fill cellulose and fiberglass, and fiberglass batts. We do occasionally run into jobs where we recommend spray foam, but for the most part, we do a lot of loose-fill.”

He added, “Keep in mind, we are in a desert climate and are often working on existing homes, whereas other parts of the country may tend to rely heavier on other types of insulation.”

And that’s certainly true for Minnick’s in Maryland, where Minnick said spray foam is the most common type of insulation they install. “We like spray foam, both open- and closed-cell, though some jobs will get cellulose,” he said. “A lot of our HVAC systems are in attics or crawlspaces. And when they are, we want to encapsulate that area, so spray foam is the best way I know of doing that.”

Growing, Growing, Grown

According to established, successful home-performance contractors, HVAC contractors who learn about insulation and offer superior installation to customers can bypass their competition.

“There are plenty of companies out there that will simply blow in more insulation into an existing attic. This is low-margin ‘blow-and-go’ work. Home-performance contractors test the home prior to performing any work and educate the customer on all the reasons how insulation actually works,” Goater said.

He added that this allows contractors to differentiate themselves, ultimately “leading to higher-margin work and the peace of mind knowing they are doing the right thing for their customers.”

And the opportunities for growth and profits are there, according to both Morgan and Minnick.

“Insulation is one of the fastest growing departments in our company,” Morgan said. “There are good profit margins in insulation, but we often sell it in addition to, or to complement, other work we are doing on the same project. We plan to expand this department and sell enough insulation jobs to support two more installation crews over the next 24 months.”

While it’s hard for Minnick to break out his insulation numbers, since they are tied in with HVAC installs, he said they are busy and have a goal to grow 15 percent each year. Plus, he loves having “one crew that does it all — HVAC
and insulation.”

SIDEBAR: Types of Insulation

The following information about common insulation types was provided by the Environmental Protection Agency (EPA) in a green rehabilitation manual. According to the EPA, the type of insulation chosen for a home depends on many factors, including R-value, availability, installation requirements, and cost.

Loose-fill Cellulose

Recommended uses: Attics and walls. When blown into attics and wall cavities by a skilled installer, cellulose does a good job of filling voids.

Total R-value: Thirty-eight for 10-inch-thick installation.

Pros: Cellulose is one of the greenest insulation materials, since it’s made from old newspapers. It’s widely available and has an installed price comparable to fiberglass, so it’s one of the most affordable types of insulation. Cellulose does a better job of slowing air infiltration than fiberglass. It can absorb and release moisture in limited amounts, an advantage in older houses where moist interior air can sometimes make its way into attic and wall cavity areas.

Cons: When blowing cellulose into an attic, care must be taken not to block the soffit vents, if the house has this type of attic ventilation. Framing irregularities or blockages in stud bays can result in voids when blowing insulation into the wall of an existing house. Also, wall access holes must be drilled and plugged when blowing cellulose into finished walls. Plugs sometimes fall out or remain visible after installation.

Fiberglass Batts

Recommended uses: Attics. 10-inch-thick kraft-faced batts, designed for attics, are available to fit snugly between joists spaced on 16- or 24-inch centers.

Total R-value: Thirty-eight for 10-inch high-performance batt.

Pros: The most affordable insulation is also universally available, and fairly easy to install. Fiberglass insulation is made from sustainable materials (sand and recycled glass). After installation, batts can be moved out of the way if necessary to access ceiling areas.

Cons: Installation is difficult with small attic hatchways and if the attic space is cramped. Batts must be fit carefully to eliminate voids. Fiberglass is not as green as cellulose or recycled cotton batt insulation. Fiberglass insulation irritates the skin and airborne fibers pose a health hazard. If attic floor framing isn’t spaced on standard centers (16 or 24 inches), then cutting batt insulation to fit snugly between joists will be time consuming and difficult.

Recycled Cotton Batts

Recommended uses: Attics. Cotton batts can be installed just like fiberglass batts. Unfaced 8-inch-thick batts are sized to fit snugly between joists spaced on 16- or 24-inch centers.

Total R-value: Thirty for an 8-inch batt.

Pros: This insulation has good green value, since it’s made from recycled waste material. Handling the insulation won’t irritate the skin, and it’s installed just like fiberglass insulation. After installation, batts can be moved out of the way if necessary to access ceiling areas. Cotton batt insulation costs slightly more than fiberglass batts.

Cons: It’s bulkier than fiberglass. Cotton batts are also harder to cut and move around, and careful installation is essential to eliminate voids. Fewer thickness choices are available, and overall availability may be limited.

Polyurethane Spray Foam

Recommended uses: Spray application between joists, studs, and rafters where these cavities are accessible.

Total R-value: Fourteen for a 3-inch-thick underfloor installation.

Pros: Expanding as it cures, spray foam air seals and insulates in a single step, filling voids more effectively than any other type of insulation. Unlike fiberglass and cotton batt insulation, spray foam can’t be turned into a habitat for raccoons or mice.

Cons: Spray foam is two to three times more expensive than installing fiberglass batts. Once applied, foam can’t be easily removed. Spray foam formulations are made from petroleum products. Greener forms of spray foam utilize some resins derived from soybeans.

Source: www.epa.gov

SIDEBAR: Spray-Foam Insulation Basics

How Does It Work?

Spray polyurethane foam (SPF) is made by mixing and reacting chemicals to create a foam. The materials react very quickly, expanding on contact to create foam that insulates, air seals, and provides a moisture barrier. SPF insulation is known to resist heat transfer extremely well, and it offers a highly effective solution for reducing unwanted air infiltration through cracks, seams, and joints.

SPF insulation applied by professionals is generally described as a high-pressure foam or a low-pressure foam, and is available as open- or closed-cell foam. There are several major differences between the two types, leading to advantages and disadvantages for both, depending on the desired application requirements. A side-by-side comparison highlights some of the typical differences between closed- and open-cell foam.

How Is It Made?

Two liquids combine during a chemical reaction to form spray polyurethane foam. The two liquids come in different drums or containers, and professionals generally refer to one container as the A side and the other container as the B side. The A side of a spray polyurethane system is commonly comprised of methylene diphenyl diisocyanate (MDI) and polymeric methylene diphenyl diisocyanate (pMDI). The B side is typically a blend of polyols, catalysts, a blowing agent, a flame retardant, and a surfactant. The polyols are part of the chemical reaction to make foam. The remaining ingredients in the B side serve different purposes to help control the creation of the foam bubbles (the cells) in an optimal way, and to provide the various characteristics of the finished foam product (flame retardancy, for example).

After the chemicals are mixed and reacted, the foam hardens very rapidly. When the reaction is fully complete depends on the type of SPF insulation and other variables.

Information provided courtesy of the American Chemistry Council. For more information, visit www.spraypolyurethane.org.

Publication date: 5/19/2014