Facebook Twitter LinkedIn Google+


Contractors Adding Home Performance Services Have Choices

Originally published: 09.01.10 by Bob O’Hara


Building internal capabilities or becoming a franchise are options.

Many hvacr contractors believe Home Performance (HP) — addressing residential customers' needs from a whole-house, energy-optimization point of view — is the future of the industry. Here are two reports from residential providers who are taking different routes to adding HP services

ABC Finds Franchise Route the Best Way to Enter HP Market

Jerry Unruh is owner and president of ABC Cooling and Heating Services Inc., a 55-year-old residential hvac company with multiple locations in northern California. His company is one of the newest GreenHome America franchises.

Why did you begin exploring the possibility of offering HP services to customers?

We are an environmentally conscious company and always aim to provide the most energy-efficient, environmentally friendly options to our customers. With federal, state, and utility incentives fueling our market — and California’s initiatives to drive 40% energy reduction by 2020 — we decided it was a great time to begin providing HP services to our customers.

Why did you decide to become a GreenHomes America franchise?

Initially, we were not looking to participate in a franchise. With our decades of experience and many successful years of business, I had hoped my company could figure out Home Performance, get it up and running quickly, and see a fast ROI.


But after months of research, we found it to be quite confusing, especially since not many companies currently offer it.

Nonetheless, we started planning how to add Home Performance services, but shortly after that I read about GreenHomes America and saw this company as a true expert in the market.

What made you so sure this was the company to go with? Did you do any research?

I am very familiar with GreenHomes America’s parent company, The Linc Group, because several of my friends on the commercial hvac side are a part of the Linc Service Network and have been for many years. I also spoke with Princeton Air, a Linc Service and GreenHomes America franchise that launched the Home Performance model in just 90 days after partnering with GreenHomes.

Princeton Air confirmed that after partnering with GreenHomes, they beat their projected numbers just after their first year.

What are the biggest benefits of going with the franchise model for HP?

In today’s economic climate, time and resources are precious items. We felt that GreenHomes America had the start-up time down to the tee. They also provided answers to questions that we didn’t even know to ask, which we now know helped to avoid costly mistakes due to inexperience. And as a part of The Linc Group, GreenHomes America partners with leading vendors, which means we receive nationally negotiated, discounted prices.

Can you describe the process of getting the GreenHomes franchise up and running?

First, we received Building Performance Institute (BPI) accreditation, had several of our staff certified as Building Analysts, and designated a Home Performance manager. Next, we used GreenHomes’ consultation and training processes to get our sales staff, field personnel, and customer service representatives up to speed.

Then we ordered new branded trucks and began hiring additional field labor. They provided a detailed, step-by-step launch plan that had everything in it and was set in the order of priorities with anticipated completion dates.

GreenHomes also provides ongoing marketing support and consultation, documented procedures, job descriptions, forms, software and scripting for field and office staff.

What are your goals for the new HP service?

Our goal is always to keep our customers for life. We saw this as an opportunity to take our customer relationships to the next level. We can now do so much more to find energy savings by improving our customers’ homes in ways they don’t even realize. Not only energy savings of significant measures, but improvements in the health and safety of their home.

We also expect this to spur a cultural change in the company. We don’t see ourselves selling some hvac and then some Home Performance. Everything we now do will be through the eyes of Home Performance. Finally, we expect to increase average job sizes by $6,000 to $15,000; increase jobs during the typical “off ” seasons — since Home Performance is not driven by weather; and decrease the number of callbacks and warranty issues because comfort issues are being solved. 

KEIL Relies on Vast Experience To Add HP Services

Milton Baum is co-owner of KEIL Heating and Air Conditioning, Riverdale, N.J. which has built an internal HP services program.

Why did you decide to add HP services? Did customers ask for it? Did you see compelling research? Or did you pick up on the trend on your own?

KEIL Heating and Air Conditioning has always been at the forefront of change. We have performed complete heat loss/heat gain calculations since the late 1980s. We have had all of our technicians certified in air balancing, and carbon monoxide and combustion analysis. We have NATE-certified technicians, take advantage of manufacturers’ training, and use the Eastern Heating Cooling Council for additional training. HP just seems to be the next logical step in doing what is right for the homeowner.

Why is it right for homeowners?

With energy costs continuing to rise, and electrical distribution maxed out, the only way for homeowners to control increasing energy costs is to make efficiency changes to their homes. HP is the change most homeowners need. We decided that possessing the knowledge and certifications necessary to assist homeowners in tightening their homes and increasing efficiency of their major appliances was in everyone’s best interest.

We feel that as time goes on, the focus on HP will increase, and we want to be a part of that as it is a win-win for everyone involved.

What have you had to invest in to add HP service?

Our investment to this point has been minimal. We sent three people to take the Building Performance Institute (BPI) training classes for Building Analyst and Envelope (Shell) at a cost of $1,500 per person, including testing. This was scheduled through Conservation Services Group (CSG), which administers the Home Performance with Energy Star program in New Jersey. In order to complete the field-testing and to perform the basic requirements for testing a home, KEIL purchased a Minneapolis blower door, a Minneapolis Duct Blaster system, and a TrueFlow air handler flow meter through CSG for a total equipment cost of just over $5,000.

In that our company was enrolled in the CSG program before April 26, 2010, KEIL was eligible for incentives on the BPI training and equipment purchases through the State of New Jersey. These state incentives cut our training and equipment costs roughly in half, from $10,000, down to $5,000.

Beyond the certifications for Building Analyst and Envelope (Shell), KEIL will have to incur costs of certifying at least two people for Heating and for Air Conditioning through BPI as those incentives through the State of New Jersey have been eliminated. Each of these classes costs $750 per person. Beyond the costs of classroom training and acquiring the tools, there is also the ongoing cost of continuing education to keep each of the BPI certifications current.

This includes travel, food and lodging expenses, plus the costs of the seminars themselves. Add in the cost of an infrared camera with a week’s worth of out-of-state training, and you can add on another $9,000 to $15,000. Before long, we will have invested between $20,000 and $30,000 to be proficient in the Home Performance field, and this is without purchasing any type of insulation equipment.

What are your goals in terms of revenue generation or percentage of business?

We created a DBA (Doing Business As) — KEIL Home Energy Solutions — to perform all of the Home Performance work through. Once we have completed all of the training and received all of the certifications, we plan to market HP as a new service offered through KEIL Heating and Air Conditioning.

Our goals for revenue are somewhat tied to the New Jersey state incentives. When we first entered the Home Performance with Energy Star program, the homeowner incentives were capped at 50% of the total cost up to $10,000, plus zero-interest financing for the additional costs.

Since the time we started our training, the state’s program has been suspended and then reinstated with incentives capped at 50% of the total cost up to $3,000, plus the zero-interest financing.

With these new changes in the state’s program, there will be far fewer homeowners interested in participating. KEIL has never been the type of company to put all of its eggs in one basket, so once we are fully certified, we will begin the program slowly and build it up based on demand. We fully believe in HP as the future of our industry, which is why we moved ahead with the training in the first place. But we will never put ourselves in a position where should the homeowner incentives go away again, it could hurt our business.

Why did you choose not to go the franchise route?

With over 100 years of experience in the residential hvac industry, we feel that our in-house systems are strong enough to format a HP services system that will work well for our customers and us at a fraction of the cost of a franchise.


Articles by Bob O’Hara

Contractors Adding Home Performance Services Have Choices

Many hvacr contractors believe Home Performance (HP) — addressing residential customers' needs from a whole-house, energy-optimization point of view — is the future of the industry. Here are two reports from residential providers who are taking different routes to adding HP services
View article.

 

Plan for Succession While Building Value

Executing a successful succession plan requires a team of experts, including an attorney, CPA, and a financial planner.
View article.