How accurate do you think some of the program and policy energy improvement pricing suggestions are?

Ever wonder why some customers think your prices are too high? Might it be because some of them heard prices that where way too low from our friends in the federal or local program told them some numbers that were way too low?

More here:  http://omstout.com/when-programs-talk-pricing-they-hurt-the-market/

Tags: Cost, Database, Efficiency, Measures, NREL, National, Pricing, Residential

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I find this common practice in the energy saving business.  The governments operate in a bubble, where the work is supplied in bulk and the leads generated are subsidized by grants other taxes. Small businesses get one or two leads at a time and need to spend resources finding work. This costs money and is placed onto the cost of the equipment.  It makes it difficult to pitch to consumers when they have been corrupted by skewed numbers. Combine this with other pressures in our business, and it is difficult at best to continue steady work.  

David Starrett

People who have no clue what things cost OR what they save make themselves look inept simpletons, or worse - like completely incompetent and dishonest liars - by reporting the cost or savings of things.  

This dumb approach sets expectations so absurdly high that those coming in to make the sale are put at tremendous disadvantage when talking about both price and benefit.  Why don't they simply attempt to illustrate opportunity rather than dig into details and solutions?  

I think that's what people want to know, what is my opportunity.  NREL could make calculators like this: http://bit.ly/Homescale -

So simple a cave man can do it, and it doesn't create biases around prescriptive solutions.  It builds on the "every house is different" theme, that the solution is NOT going to be plug and play, and helps the consumer decide if further investigation is warranted.

8 years ago no one thought my prices were too high. Today even I think they are too high. Why? Because in order for me to participate in home performance in NY I need to work with NYSERDA programs. Now I have 2 full time office people, a part time marketing person, outside services for SEO, multiple folks with multiple BPI certifications, multiple trade association memberships, multiple annual trade show 'must see events' ...
In short the cost of doing business has increased exponentially while the supply of reasonable private work has dried up. Now my competitors are better versed in finding financing to expand and survive than they are at HP. Eventually the funding from government will dry up. I can't wait for that day to come. The only other fix I see is to divert all subsidies to homeowners and make the contractors survive the market.

My hope is this house of cards collapses sooner rather than later and we get back to business. I don't need an audit to know an uninsulated house with a 30 yr old furnace needs work. That work usually costs less than $13000 in the system i am forced to work with today. In the old system it would have been under 10000. I can understand and am willing to implement test in test out across the board, and it makes sense to do a fan if infiltration is way low, fix gas leaks, check CO, all of which I did not do 15 years ago, but do now. It doesn't make sense that I need a staffer to keep track of the forms and applications, which program does what, remember Treat doesn't default to the right lifetime for a thermostat, etc.

The system isn't even consistent, now we have to work with WAP ( EmPower) and HP (GJGNY) (often on the same house) and those systems are completely in opposition. Each has its own software. In EmPower air sealing $ must be justified by itemizing things at an hourly cost. In GJGNY air sealing is what you call dollars you cannot justify otherwise.

Regulating this beast keeps several people at NYSERDA, CSG, BPI, & Honeywell in a paycheck. The more obtuse the regs are the more bureaucrats stay employed. They are self regulating. (Sic) These bureaucrats are the folks who have enough paid time to lobby DOE and create the rules. Contractors don't have that time, so we end up dealing with the chaos.

It feels to me like the acronyms want to push retrofits to deep energy retrofits. Where is the economy for the homeowner to ignore radon, lead, and asbestos but require exhaust venting? Ignore poor drainage but require a cover on the filter slot and a drop tube on the TPR valve? What is the payback on triple pane vs double pane? Especially after walls, attic, floor are insulated and a condensing furnace is in. By ignore, I mean not offer funds to do radon, drainage, roof repair, lead or asbestos mitigation, etc. They only fund stuff that saves energy. Then, they say don't complain to us, it is the PSC.

Finally, with the government (even the present administration) advocating clean coal and fracking, fuel costs are sure to remain low while the administrative burden imposed by these programs means cost of doing business will remain high. There is no good business sense in this industry right now, there is only corporate welfare at its worst.

Creativity in weatherization practice is irrelevant unless you can get it to show SIR. There is no good reason to innovate in practice unless you can write an algorithm to associate that improvement to success in software. Now BPI is making modeling a requirement for BA. Guess where that will lead.

lol, awesome post Pat...  

Nice job defining what happens when you measure proxies for performance, don't measure what matters, and everyone with their hand in the pot will do whatever it takes to avoid accountability or shift blame for poor performance to the guy in the chair next to them.  

Seems a lot of "work for work's sake" rather than "work for productive purpose".   This causes a climate where excellence is competitive disadvantage.  Those who cut corners the tightest without getting caught are the biggest winners.  

Until we start tracking where our drives land and counting the strokes, the score everyone will continue to claim will remain 18 for 18 holes.  In HP, everyone thinks they are Tiger Woods.  It's the Emperor's new suit situation, nobody wants to be honest and the only winners are the gypsy tailors.  

Are you ready to recognize that when we start tracking most won't be breaking 100, not in the near term anyway?  Are you willing to acknowledge when your drives land in the pond or tall grass?  Are you willing to have your scores compared to the scores of your peers?  

If you are, on the other side is a much better world.  One where you are recognized and rewarded for excellence rather than corner cutting.  Where higher price can be justified by your history of better results.  

On the other side is a world where the consumer can be confident in the results you provide because of both your history of results, and your skin in the game in having your continued results outperform your competition. 

But who has the ability and self-interest in stepping back and seeing accountability as a GOOD thing instead of a bad thing?  Who is interested in having a TrustBridge Contractor Performance Registry?  Training facilities will benefit, but who else?  

Who will support transparency and accountability?  I'm looking for names.

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