The California Gold Rush (1848 to 1855) made headlines around the world as James W. Marshall struck gold in the hills around Sacramento California. Some 300,000 “forty-niners” flocked to the region to stake their claim on new fortunes to be made. Interestingly, there are significant parallels between the gold rush and how the home performance industry has evolved.
Let’s Get Rich
The term gold fever was used to describe the level of excitement that lured would-be prospectors to California. The promise of gold nuggets lying on the ground was a common slogan made by promoters seeking to lure citizens to California. Unfortunately, the end result was that most miners did little more than suffer poverty and disappointment because of unrealistic expectations.
Home performance is completing a similar cycle to the gold rush. Unrealistic promises were made, an industry has risen and is falling. It is rumored that there are less than 1,000 valid home performance contractors operating successful businesses in the US today. The vast majority of caulkers and energy raters have suffered poverty and disappointment because of unrealistic expectations and their belief in what would become of home performance.
Still Gold in California
The good news is “there is still gold in them there hills,” both in California and in home performance. Once the fever wore down, California prospectors that had long term business plans and consistently worked their claims are the few who became rich. Some of the original mines from 165 years ago continue to produce fortunes. The gold rush continues for those willing to take a long term approach and look beyond the get rich schemes and short sighted promises of promoters.
This same principle holds true for a significant number of HVAC contractors and dozens of home performance contractors who have embraced a realistic approach to home performance services. These wise business owners recognize the valid opportunity that the real market offers. With a long term view in mind, many are very successful in home performance contracting.
One source of failure in the home performance industry has been the all-or-nothing approach often made by its early promoters. The government and energy consultants adapted the element of force used by the environmentalists and sought to regulate the market in a similar manner.
As home performance entered the market, nearly every participant was funded into business. Federal regulations mandated state participation, so everyone joined the craze with the same approach. Training and often test instruments were handed out for little or no cost in an attempt to form a new industry. Regulations were put in place that spawned energy rating organizations and implied riches and prosperity for all. Program sponsors fostered the belief that energy efficiency and non-compliance were not an option. Unfortunately the market didn’t completely agree.
Then the market had its say. The voice of many homeowners was loud. “We will not replace our windows, appliances, light fixtures, seal our building envelopes, reinsulate, and replace our HVAC systems with 95 AFUE and 20 SEER equipment just because we are told to. We will not replace our water heaters and install solar panels and a windmill! All these cost more than our house is worth and the payback is 100 years!”
All or nothing never made sense to 95% of consumers, but it made sense to a few.
From a consumer’s perspective the early adopters took the bait and bought their environmental badges of honor. As that small pond dried up, the home performance industry has been forced to deal with the realities of the market. The approach that every home needs $30,000 to $60,000 in upgrades to be energy efficient has run its course. Sure, a few consumers still find a path to energy nirvana, and always will. Just like a few forty-niners struck it rich. But a new day for home performance is upon us.
Reality has Taken Over
If there is a single grand realization that has settled on the HVAC industry, it is that your job is to provide what customers want, and only what they want when it comes to home performance. It is not your job to demand your customers buy all or nothing, it never has been.
As some of the forty-niner’s of the home performance industry fade away and dissipate into other industries, the market will enable others to survive and prosper. This is a law of economics. The market will dictate what it wants and it has spoken.
Reality is returning home performance to the HVAC industry. Many are finding this has been its home all along.
The HVAC industry is comparable to those long-term miners who survived the gold rush. We have the customers and the relationships. It has been our role all along, but the rights to this claim can only be made if you are willing to dig for it.
What HVAC Contractors Can Do
You can begin with what you’re best at. First, get the home’s HVAC system sized right and operating according to published manufacturer specifications.
One piece of the puzzle that has always eluded the home performance industry is the ability to measure and rate the operating performance of HVAC systems. How can a home be rated without the operating efficiency of the HVAC system being measured? You can do this.
Did you know the load of a building under design conditions can be reduced up to 40 % just by renovating the HVAC system? This is accomplished by the HVAC industry by testing, diagnosing and renovating the HVAC system. Repairs include reducing equipment size, lowering the watt consumption of the fan, reducing BTU loss or gain through the duct system and lessening equipment run time by balancing the HVAC system.
If your customers have discomfort or high utility costs, your next step may be to talk about the building envelope before replacing equipment. If a section of the duct system were uninsulated and pulling air in from the outside, you would seal and insulate as part of upgrading the HVAC system, right?
Realize that each room in the home is also part of your duct system. As air leaves the supply register and then moves back into the return grille, the room actually becomes part of the duct system.
As you teach this principle to your customers, home performance opportunities that you really want become yours. Air sealing and insulating are the biggest bang for your customers' buck when it comes to energy savings, so why not offer this testing and these services to them? Understand you are there at the right time and also in the position of trust at the moment their home performance need arises.
Finally, it is perfectly fine to be selective. You don’t have to do windows, install light bulbs, replace appliances, install low flow showerheads or place solar panels on the roof. Leave these services for others, and stick with what you do best.
Rob “Doc” Falke serves the industry as president of National Comfort Institute an HVAC based training company and membership organization. If you're an HVAC contractor or technician interested in a free home performance questioner HVAC customers, contact Doc at [email protected] or call him at 800-633-7058. Go to NCI’s website at nationalcomfortinstitute.com for free information, articles and downloads.
