I serve as the vice president of ambassador and industry partner programs at Buildxact, providing leadership and collaboration across the various verticals involved in custom homebuilding and remodeling and the industry stakeholders involved in order to guide relevant product solutions.
... As one of many actions to reach a net zero energy economy by 2050, the U.S. is finding ways to minimize the impact of existing housing, which is difficult because as a subset of the country’s overall decarbonization efforts, residential buildings have one of the most diverse existing landscapes.
“Plus, like we have seen in other areas, remodelers are laggards when it comes to sustainability,” he said. “They typically aren’t proactively seeking differentiation in the market. They do it when it’s necessary, like when it is driven by compliance or insurance.”Pros rated lack of consumer demand as the biggest barrier to doing retrofit projects.
While The Farnsworth Group study reports that the value and benefits for the customer is one of a contractor’s top priorities – second only to cost. That value and benefit is wrapped up in the costs and the energy savings that would be passed along to the homeowner.home value increases $20 for every $1 reduction in annual utility bills. So, a solar energy system that saves $200 per year would also add $4,000 to the value of a home.
According to Farnsworth, some contractors are passing on opportunities to install more sustainable products if they require a specialist or if the product is more expensive. He also reports that if the contractor has to buy more expensive products, they may not change already established practices. A U.S. Department of Energy’s 2021 study showed that to achieve at least 50% carbon reductions in the average home, the project would cost about $55,000, which is a daunting figure for many households when the average home improvement investment today sits at about $22,000.
The Pacific Northwest National Laboratory has embarked in some consumer research to understand the homeowners’ motivations and help spur engagement. Chrissi Antonopoulos, senior analyst at the lab says that the best motivator is rebates even if they are small. This gap in profit margins spells out an opportunity. If energy upgrade businesses were to reduce gross margins to the level of standard remodeling, overhead and profit costs could be reduced from 47 to 33%, representing a 14% reduction in total project costs. Although the potential for reduced costs is clear, the way to get there is not.
The report also suggested outsourcing customer acquisitions as a prime opportunity to reduce soft costs. Customer acquisition typically costs up to $2,500 per project, which can be reduced to $700 per project by using a skilled marketing group and use of best practices. “The federal government, while they are authoritative, aren’t the best in giving contractors tools,” Briscoe said. “That’s what Rewiring America has set out to do – eliminate the friction in accessing IRA benefits.”
“Manufacturers and service providers have an opportunity to be a knowledge source,” Farnsworth said. “They have responsibility and opportunity as it relates to specs and products as it relates to the policies.
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