The green movement is gaining new ground in the built environment. Builders and HVAC contractors alike are benefitting from these inroads, and the National Association of Home Builders (NAHB) is keeping an eye on builder and consumer behavior as the idea of being green continues to advance. According to the "2020 Green Single Family and Multifamily Homes SmartMarket Brief" — which analyzes the green home building market and current market trends — 97 percent of green builders report using energy efficiency practices on more than 75 percent of their projects. The relevance to the HVAC industry is in the next finding that showed 88 percent of those 97 percent of green builders call out a tight building envelope and 61 percent use high performance ventilation. The latest in a series of studies conducted by Dodge Data & Analytics in partnership with NAHB, the report also points out that over two-thirds of these same green builders are also using practices designed to improve IAQ and water efficiency.
“These findings complement the results of a recent NAHB study where home buyers ranked high-performance products and practices among the top features they want in a home,” said John Barrows, NAHB Sustainability and Green Building Subcommittee Chair and founder of B3 Builder Group in Bridgehampton, New York. “This shows us that the value of home performance is increasing among builders and consumers.”
Increasing awareness is part of the green equation, but so is building demand. Commercial and residential consumers may have been aware of green products and building processes for years, but that doesn’t mean they were requesting them. With demand being the other side of the supply and demand principle, this is an integral piece of green product and building process growth.
According to the study, builders and remodelers see the need for increased market demand from customers for green homes in order for them to increase the green projects they build. Lack of market demand was cited as the top reason that companies are not currently doing more green building.
“This presents an opportunity for growth in the green market, as only one-third of builders identifying themselves as green, built green at least half of the time, while nearly half (42 percent) of single-family and almost one-third (31 percent) of multifamily builders reported doing no green projects at all,” said Donna Laquidara-Carr, industry insights research director at Dodge Data & Analytics.
Mike Antonucci, manager, Advanced Air & Refrigeration Inc., Fort Myers, Florida, explained that when it comes to the intersection of HVAC and green, much of the company’s clientele want to see a decrease in their electric bills.
“Customers aren’t asking for increased SEER ratings; they are asking to save money on their electric bill,” he said. “Most people in our market simply want their a/c to operate all the time.”
Despite the lack of demand, Advanced Air & Refrigeration Inc. is still preparing its team for a time when the demand increases. The company has an entire training program focused around green practices.
“We make sure our techs are EPA [Environmental Protection Agency] certified for refrigerant handling,” said Antonucci. “We discuss building envelopes and proper sizing of systems as well as duct systems. We do sell a larger-than-most volume of communicating systems in our area.”
In the future, he is expecting that not only will refrigerant changes possibly increase green demand, but also that an increase in communicating/inverter systems will allow longer run times at a lesser load. It will, in turn, drive down the electrical load placed on power systems.
In the NAHB study, it was noted that 29 percent of single-family homebuilders said that green is more difficult to market, but 34 percent said it was easier to market. As for multifamily builders, only 13 percent thought it was more difficult to conduct green marketing, while 54 percent said it was easier to market.
The study took a deeper dive into marketing terminology, examining what phrases were more successful in builders’ marketing efforts. In both single-family and multifamily green marketing, the most effective terms were “long-term utility cost savings" and “operating efficiency.”
The terms “durable construction” and “sustainable” were the least effective. In the middle fell marketing terms such as “healthier homes”, “quality construction,” and “high performance.”
Along with marketing, there are drivers and obstacles to green homes and buildings. Both single-family and multifamily builders showed that over 60 percent of consumers — 64 and 63 percent, respectively — are still not willing to pay additional costs. Those numbers have decreased since the last study in 2014, which showed 73 and 68 percent of customers were not willing to pay additional costs.
MONEY MATTERS: Both single-family and multifamily builders showed that over 60 percent of consumers — 64 and 63 percent respectively — are still not willing to pay additional costs.
Martin Hoover, president of Empire Heating and Air Conditioning in Decatur, Georgia, said that his experience has so far revealed that the greener an installation, the more expensive it becomes.
“I believe as green installations and practices becomes common, the pricing will come down,” he said. “Right now, each manufacturer has their own controls and their own programming. I don't think the major manufacturers want to find a common standard, so I think contractors will have to be more selective in what they sell and service.”
Hoover explained that as green and high-efficiency equipment grows in demand, even highly skilled technicians could have trouble servicing top-of-the-line equipment across multiple manufacturers.
“There is a large amount of product-specific training required,” he said. “We have been preparing our staff to handle these increasing demands. We are well-versed on the newer variable-speed options, and it is the fastest growing segment of our business.”
INCREASING ACCEPTANCE: Over 80 percent of single-family builders and remodelers believe that the lower operating costs of a green home provide more value to the home owner than the initial premium, and over half also believe that owners gain value from the greater comfort and better occupant experience that a green home provides.
According to the NAHB study, a majority of builders/remodelers believe that their customers see green homes as costing more but also as achieving higher performance. In addition, 70 percent of single-family homebuilders believe that their customers will pay more for a green home, suggesting that many homebuyers understand the benefits of green. In fact, over 80 percent of single-family builders and remodelers believe that the lower operating costs of a green home provide more value to the homeowner than the initial premium, and over half also believe that owners gain value from the greater comfort and better occupant experience that a green home provides.