Most, if not all, energy auditors that I come across in the real estate world have an energy auditing company that that is also a home performance contractor that complete many if not all of the upgrades and repairs that they recommend. Usually it is a contractor such as a HVAC, insulation, general contractor, etc that has energy auditors on staff though there are several companies that emphasize the home performance testing first with the ability to contract or sub-contract the work outl
Is third party energy auditing a viable stand-alone business model in this day and age (I'm looking for answers from those in areas where a third party energy audit is not required for the sale or purchase of a home)?
Thanks in advance.
In most areas a stand alone energy auditing business cannot compete with companies who will give the audit away in hopes of getting the more profitable renovation work. If they someday mandate 3rd party independent energy audits then perhaps we could compete. I took the easy path and retired.
Wow that is a great spreadsheet. Are you completing the weatherization work yourself or do you sub it out?
Hi Rob. Here are our case studies, should help you understand our process.
If you have more in depth questions you are welcome to reach out to me directly.
My business is a 3rd party Energy Audit Business only. It has been this way for 16 years. Most of those years it was part time. Since 2006 however it is more than full time. You cannot think individual home owners will sustain your business. You have to develop other markets. We were influential in getting jurisdictions to adopt the Performance Path as compliance to the building codes starting in 2009 with duct testing. Energy Star and National Green Build certification services add to the business when directed at builders and Low Income Housing programs. Don't get caught up in Government programs that may be temporary in nature. Many auditors have gone out of business chasing these Gov/Utility programs.
Make sure your business plan is solid to start and flexible enough to adjust to the market.
So is your business more with other contractors verifying their work?
I operate a home energy consulting business and most of the non-mandated audits I do come to me precisely because I'm not affiliated with any contractor or product. These homeowners appreciate the independent, non-biased approach I take. Is it sustainable? No. I do it part time and would/could never rely on these customers to keep bread on the table. It's niche and that's fine with me. To Bruce's point, I would need to branch out beyond the residential homeowner market to truly make this sustainable.
Good question Rob. I've seen some that offer multi-faceted approaches with more than one product line, ie solar, energy audits, HVAC.
But I also have clients who are energy auditors that are very successful. Being able to offer more than one product line as a be-all type of business may be the wave of the future energy auditor to capture more business.
But there are always those consumers who don't want an auditor that also sells product as that isn't seen as ethical, maybe more salesman like.
My experience with some of the local companies is that they only push what they know. HVAC pushes duct sealing and system replacements while the insulation company focuses on adding R value in the attic (I know that is a broad generalization and apologize in advance for pigeonholing the local industry into that category).
On the other hand and from a real estate sense, I don't see home buyers (in general) demanding energy audits as part of the home buying process, especially when the cost is coming out of their own pockets (even if it is only an additional $99).
I know you are including that as part of your home buying process too but are your buyers taking action with their results after closing (or as part of the process) or is it just something that they are using as just information about the house?
If an auditor has not actually done a lot of field work, air sealing and insulating, they are not able to provide truly useful work proposals or recommendations. An insulation contractor then only has a written report to go by. They still have to go and look at the house and do their own assessment of what can or cannot be done and what it would take to do it. When the auditor comes back to do a test-out, they can miss a lot of things that were or were not done and are now hidden. For example, how many knee-walls or attic crawls or other voids are not accessible during the audit? Was that bath fan really ducted properly with rigid pipe> Was the insulation dam around the chimney done properly? Were the recessed lights covered properly?
My second argument against separation of audit and contractor is that auditors develop relationships with contractors, which is sometimes only driven by money- cheaper contractor with cheaper work and possible kickbacks or "finder's fee" to the auditor. Is that really independent?
"The more you look, the more you see" and "If you don't look, you don't see"
Swiftsure Energy has run as consultants, verifiers and raters for 8 years- we audit very few (about 5% of our business) existing homes but instead focus mostly on new construction. Not sure if that is the answer to your question? We do not do any improvements or new installs. We also contract with some HVAC companies to do 3rd party duct tests and blower door testing for house air leakage. We have had a 20% growth rate every year.