Insulation Business Makes Money, Lessens System Load
Longer life, happier customers, and increased bottom lines result from proper insulation
The art of HVAC is found in mitigating heat transfer. One of the tools to help contractors in this area is insulation. Before suiting up and insulating everything in the house, contractors should understand the science to insulation — how it balances out what is necessary not only for the house itself, but also for the heating and cooling systems within the house. In essence, proper insulation can yield a win-win-win situation for the HVAC system, the customer, and the contractor.
Learn Building Science is Key to Insulation Success
Before starting into the insulation prospects of a building, contractors should take the time to delve into building science and some of its regional applications. They can do this by using online, association, and government energy information that is readily available.
"Building science is the foundation for all the problems and solutions we uncover and solve in customers’ homes," said Marc Tannenbaum, president, Dr. Energy Saver & Attic Systems, Seymour, Connecticut. “Stack effect, conductive, convective, and radiant heat gain (or loss), thermal imaging, and humidity measurements are all used in our assessments of homeowners’ comfort issues.”
PROPER INSULATION REQUIRED: Ted Winslow, product manager, building science, systems, and technical marketing, CertainTeed Corporation, noted that proper insulation is critical in designing efficient buildings, whether it’s residential homes or commercial structures.
Ted Winslow, product manager, building science, systems, and technical marketing, CertainTeed Corporation, noted that proper insulation is critical in designing efficient buildings, whether it’s residential homes or commercial structures.
“According to the U.S. Energy Information Administration (EIA), air conditioning accounts for about 12 percent of all home expenditures,” he said. “Without proper insulation, there is nothing to prevent heat transfer, which means homes will lose heat to the outdoors when it’s cold and draw in heat in the summer when it’s warm. In essence, air conditioning systems will work much harder than they need to.”
The first place Winslow suggested that insulation be added to a home is the attic. He explained that if not insulated properly, the attic can be the biggest source of heat loss and potential roof system damage.
“If the attic is not insulated properly, start there with batt or blown-in insulation,” he said. “Spot treating with spray foam around plumbing and electrical penetrations is also easy to do and can make a significant difference in an energy bill. Insulating strips around drafty doors that lead outside or into the basement can also make a big difference.”
A Knowledge of Building Science is a Victory of HVAC
With a bit of building science under their belts, contractors can leverage insulation to get a win for the HVAC system while simultaneously grabbing a win for their customer too. These wins come in many forms. First for the HVAC system is a reduced load.
“This reduction in the building load reduces the heating or cooling that the HVAC system has to add or remove,” said Eric Robnett, owner of Home Energy Experts, Sparks, Nevada. “This reduces the running time over a 24-hour period of the HVAC system and can reduce the actual size and capacity of the HVAC system that is needed to heat or cool the building.”
The reductions of running time helps prolong the life of the HVAC system and helps contractors avoid oversizing the unit. What they will hear from customers who possibly have problems with insulation adequacy is their a/c unit is running constantly or that their energy bills spike dramatically in the spring or summer.
"It's a telltale sign of inadequate insulation," said Winslow.
Robnett pointed out that not only will the system constantly run, but customers will never feel like desired temperatures are being achieved. Constant repairs to the system and increased wear and tear can be a result of inadequate insulation as well.
Once insufficient insulation is addressed, the HVAC system will start to feel relief — and so will the customers. Desired temperatures will be easier to reach more consistently, and the constant running of the system will usually stop.
Solving these problems can differentiate HVAC contractors from their competitors. It can also improve their bottom lines.
Insulation Services Can Provided Leads and Profits
The benefits of providing insulation services to customers can be measured in leads and profits. “Leads and sales visits for insulation will create opportunities for your team to inspect customers’ heating and cooling equipment, leading to increased replacement revenue,” said Tannenbaum. “Marketing and selling insulation will help reduce the impact of seasonality on your business. Your customers and prospect are already contacting you to solve their comfort and indoor air quality issue. You already have sales and service people in attics, literally stepping over these added sales opportunities.”
SUBS CAN WORK: Just because a contractor decides not to invest in providing insulation services, doesn’t mean that they cannot benefit from overall insulation sales through their company.
Some contractors will choose to subcontract this work out, but Tannenbaum encourages HVAC companies to invest in insulating buildings to improve comfort, IAQ, and system efficiency.
“Air sealing and insulation work is very profitable,” he said. “HVAC contractors can see gross margins in the 45-55 percent range with this work. We see average job tickets at $7,000, which can often be installed in one day by well-trained production crews.”
The investment in the proper equipment will likely come out to about $75,000, and there will be another $25,000 in the first year for training, according to Tannenbaum. Tools he suggests include highly productive cellulose blowing equipment, vacuums to remove existing insulation, a vehicle, and diagnostic tools like thermal imaging cameras.
“We recommend starting with air sealing and insulating attic floor services first,” he said. “But be careful — you need to understand exactly what the customer really wants to buy in order to compete effectively with lower-cost ‘blow and go’ insulation companies that do not air seal before adding insulation.”
Just because a contractor decides not to invest in providing insulation services doesn’t mean that they cannot benefit from overall insulation sales through their company.
Robnett subs out insulations jobs to an insulation professional contractor.
“We sell it with our financing as part of a total comfort and efficiency solution,” he said. “It makes us bottom-line margin money with no in-house labor or materials. We simply are a consultant and make a margin off of the sale of it.
“Customers understand insulation; it’s not a hard sell,” Robnett added. “I would say it’s harder to get our salespeople to remember to discuss the importance of it and offer it on our sales calls when the immediate focus is driven towards the HVAC system replacement sale.”