Remodelers are increasingly focusing on energy efficiency but face barriers to promoting it to clients. A study identified remodelers' needs through focus groups, finding clients are often cost-focused and upgrades do not increase home value. Remodelers need tools to educate clients and quantify savings. A survey of remodelers found the top priorities were appraisal values not reflecting efficiency and clients selecting bids based on cost alone. Developing standards and programs were suggested to address remodelers' needs and help more homeowners.

1. Needs & Motivations of
Remodelers for Adding
Energy Efficiency
Amber Wood
Manager, Energy Programs
NAHB Leading Suppliers Council
June 7, 2012
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2. Building America
 Private/public R&D
partnership sponsored by
DOE
 Energy-efficient solutions
for new and existing
housing
 Technologies/Systems
 Whole-House Test Homes
 Quality Processes

3. Needs & Motivations of
Remodelers
 Current remodeling industry
 Role of energy efficiency
 Identify the gaps and barriers
 Quantify and prioritize needs to
increase sales & projects involving
improving home energy efficiency
3

4. Remodelers’ View of Current
Industry & Energy Efficiency
(initial set of focus groups)
4

5. Current Remodeling Industry
 The economic climate has shifted greater
to focus to remodeling
 More consumers are staying in their homes
 Many builders are turning to remodeling work
 Competitive, price sensitive market due to
 Lending restrictions
 Lack of appraisal value on energy efficient
upgrades
 Flood of individuals into the remodeling arena
5

6. Current Industry (cont.)
 Qualified remodelers strive to
differentiate themselves
 Convey to the consumer the value of an
experienced, qualified remodeler
 Position the remodeler as the expert &
serve to build trust and confidence
among consumers
6

7. “This is the way we build”
Believe energy efficient upgrades are part of “doing things the right way”;
incorporate as part of their business model
Have certain upgrades that include as standard part of process, if warranted
Approach as “this is what we’re going to do” then educate consumer as to
why they do it
“My responsibility to recommend”
Believe energy efficient upgrades are in customer’s best interest and actively
seek opportunities to recommend upgrades
Seek to guide consumers as to benefits; try to drive them toward it
May recommend upfront, but most often wait until have gotten a feel for the
house and customer
“We’ll offer as an option”
Intellectually know it should be recommended, but don’t have strength of
conviction
View more as a consumer driven decision; give them information then let them
decide
Anticipate consumer bottom line focus
7

8. Role of Energy Efficiency
in Remodeling
 Provide a cost/benefit analysis for
energy efficient upgrades
 Include an energy audit assessing
energy consumption & lifestyle
 Demonstrate potential savings for
various upgrades; connect the dots in
terms of upgrades and real world
benefits.
8

9. Best Approach to Energy
Efficiency
 Knowledgeable
recommendation with the
consumer’s best interest in
mind
 Sales attempt with the
remodeler’s/builder’s
financial interest in mind.
9

10. Remodelers’ Gaps & Barriers to
Adding Energy Efficiency into
Remodeling
(2nd set of focus
groups)
10

11. Gaps & Barriers to Adding
Energy Efficiency
 See growth potential for energy
efficient upgrades
 Long-term success is dependent on
upgrades becoming market driven.
 Need incentives based on improved home
performance (not specific products)
 Shifting homeowner mindsets to
“performance” of the home
11

12. Challenges . . .
 Perceived value in doing energy
efficient upgrades
 Costs
 Auditing/testing
 Limited homeowner resources
 Energy savings vs. upgrade investment
 Energy efficient improvements do not
add appraisal value
12

13. Reasons to Invest in Energy
Upgrades
 Motivators Include:
 Reducing monthly energy bills
 Having more predictable energy bills
 Increased comfort
 Improving indoor air quality
 Environment, conservation, and/or green
 Helping homeowners to connect the dots
between a problem and solutions is
necessary for buy in
13

14. Selling vs. Solutions for
Remodelers
 Educational information regarding
energy inefficiency can create
awareness
 Did you know that you could be paying
more than you should be in monthly
energy costs because of leaky ducts,
drafts, outdated heating & cooling systems
or insufficient insulation?
14

15. Growing Energy Upgrades
 Nationwide existing home
performance scores
 Establishing appraisal value for
energy efficient upgrades
 Realtor education as to value energy
efficient upgrades bring, and how to
sell the features
 Points off mortgage interest for
energy efficient upgrades
15

16. Tools Needed
 Informational/educational resources
 Shift consumer thinking to home
performance
 Increase understanding of problems
 Understand benefits of various types of
upgrades
 Website, DVD, printed materials
16

17. Tools Needed (cont.)
 Consumer campaign
 Free/low cost energy audits for
homeowners
 Key questions to ask in order to
identify opportunities
 Means of quantifying impact of
energy efficient upgrades
 Connecting remodelers with energy
auditors to develop referral network
17

18. Remodelers’ Needs for
Improving Home Energy
Efficiency
(quantitative market
research based on focus
groups)
18

19. Prioritize the Support
Needs
 Quantitative market research
with remodelers.
 Build upon the qualitative
remodeler focus groups,
 Quantify and prioritize the
support needs
 Increase sales and projects
involving improving home energy
efficiency 19

20.  What percentage of your recent clients
fit into the following groups when it
comes to accepting energy efficient
upgrades?
% Clients in Following Groups Mean
Bottom line focused - will not spend any more 40%
than they have to.
Can be convinced - may or may not think about 39%
energy efficiency, but are open to the upgrades
once they understand the benefits.
Embraces, or actively seeks, energy efficiency. 21%
Total 100%
20

21.  When working with clients, which of
the following statements most closely
describes your company’s approach to
energy efficient upgrades?
Company Approach to Energy Efficient Upgrades Freq.
We do not try to sell or offer energy efficient 6%
upgrades unless they are specifically asked for by
the client.
We offer or recommend it when the energy 51%
efficient upgrade is cost effective and is directly
related to the home improvement project.
We believe energy efficient upgrades are part of 43%
“doing it the right way” and incorporate this into
as many remodeling jobs as possible.
Total 100%
21

22.  What is the relative importance of all of
the issues?
Priority Issues sorted by Importance to Remodelers
1 Appraisal values factor into what type of remodels clients are
willing to undertake, and energy efficiency is difficult to value.
2 Clients are typically unable to discern between high quality and low
quality construction at the bidding phase. Often they select the
lowest cost bidder. This makes selling upgraded energy efficiency
difficult.
3 Realtors, who are in contact with homeowners as they buy/sell
homes, aren’t able to describe the value of energy efficiency.
4 There is no standard way to compare a home’s energy efficiency
when buying or selling an existing home.
5 Homeowners want to see tangible differences, often focusing on
aesthetics or functionality, which makes energy efficiency a difficult
sell.
22

23.  What is the relative importance of all of
the issues?
Priority Issues sorted by Importance to Remodelers
6 One popular way to determine airtighness, a blower door test, is
expensive and most clients are not willing to pay for just an
evaluation.
7 Homeowners see energy efficiency upgrade costs as an expense
and not an investment.
8 Clients don’t understand the value of energy efficiency. They place
little value on it. If consumers don’t see a problem, then they won’t
purchase the solution.
9 There is little real demand for energy efficiency. Homeowners are
just following the money for rebates.
10 No coordinated efforts between the federal government, state
government, and utilities when it comes to offering, applying for,
and complying with energy efficiency incentive programs.
23

24. Next Steps
 Outline potential solutions
 Determine homeowners gaps &
needs
24

25. Resources
 Building America
 www.eere.energy.gov/buildings/building_america
 Builders Challenge
 Program: www.eere.energy.gov/buildings/challenge
 NAHB Research Center
 Main Website: www.nahbrc.com
 Technical Info: www.toolbase.org

26. Questions?
26

27. Thank You!
Amber Wood
NAHB Research Center
Manager, Energy Programs
400 Prince George’s Blvd  Upper Marlboro, MD 20774
(direct) 301.430.6309  (fax) 301.430.6180
www.nahbrc.com
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