Is It Conflict of Interest for BPI Energy Auditors To Sell Weatherization Products and Home Improvements?

I have been concerned about the potential conflict of interest of energy auditors selling weatherization products and home improvement services recommended by their audits.  I would like to get the group's opinion.  I have brought this to the attention of BPI and the NJ Home Performance with Energy Star program without much apparent interest or feedback.  In fact, the NJ Clean Energy program has basically institutionalized this practice into their contractor incentives.  As evidence, note that they require all companies entering the program to be state licensed Home Improvement Contractors.  Neither BPI nor NJ seem to have a place for independent auditors who don't have an interest in doing the contracting as well.

I see this conflict as being no different than a Home Inspector selling repair services after they find problems in a home.  In fact the American Society of Home Inspectors (ASHI) and many states prohibit home inspectors from doing this. I have run into many homeowners that have either had energy auditors install items that weren't necessary (in their opinions) or at the very least always recommending their particular product or service as part of the weatherization improvements.  I find this is most prevallent with heating and air conditioning contractors - NJ has essentially forced many HVAC contractors into the home performance market whether they like it or not in order for their customers to be eligible for state incentives and rebates.  Many could care less about the full scope of home performance beyond making the HVAC sale.

I think this conflict seriously devalues the integrity of all our recommendations.  It also creates conditions whereby consumers don't understand the true costs of the BPI home performance audit because it is buried into bundled weatherization work, which may in fact cost them more than if the audit were done by an independent auditor with no ulterior motive to make a sale.  I think this conflict will ultimately cause many very good and qualified independent home performance auditors to get out of auditing, leaving only the contractors who are making sales as a result of their audits.  I'd like to know what everyone thinks.

Tags: BPI, audits, conflict, energy, interest, of

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Replies to This Discussion

I could not agree more. I have been in the energy auditing for 6 years and never once have offered the services to fix the issues. I do work with the home owner and there contractor on how to go about fixing the issues and it always works out and everybody is happy.

 

Regards

Jeremy Kays

X-Ray Eyes

For all of your unseen problems

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Bob,  BPI contractors have their work audited by BPI and often the program they are working under so they do have a big incentive to "do it right" if they want to keep their accreditation. I've had it explained to me that it is like many other professions - taking your car to get serviced for example - where the person doing the diagnosis also does the fixing, but at least in this case there is 3rd party oversight of a percentage of the work.

I see your concerns but thought I'd share the other side to the argument.

I'm sure we all have stories about repairs that were done to our cars that were not needed. Besides, my impression is that the audit is more to make sure they did things they said they would do the way BPI would like to see them done, not to necessarily to ensure that what they recommended was necessary or appropriate.

Bob, let me start by saying I am a BPI Certified Analyst, a Certified HERS Rater, and have completed the Home Performance with Energy Star training.  After completing an audit, I give the home owners a list of prioritized improvements based on the HPw/ES Program.  As an added service, I also offer homeowners contracting services, which is a service I inform them of up front so as to avoid conflict of interest issues later.  I have a group of contractors that I work with and they can complete the improvements exactly to the specifications of the audit.  As Amanda stated, there are standards that have to be lived up to and mine are based on three different protocols. Here is a link to an article in Energy Circle  http://www.energycircle.com/learn/home-energy-audits/certification that discusses this very topic.  Check down at Section II.  

When I am in people's homes, I am there to help them solve their issues and come up with a plan that gives them the most cost effective methods to fix these issues.  Although I don't personally do the contracting, I have the ability to provide the homeowner with the one thing they want, me.  I have gained their trust and in many cases have gotten their business from a referral.  I not only provide them with the proper contractors to complete the job, but they are people I know and trust that will get the job done properly to my standards.  They are also properly licensed and insured.  Also, in managing the contractors, I can make sure that the improvements are performed in the right order, so one doesn't inhibit the other.

I can certainly understand your point though, because lets face it, there are plenty of douche bags out there that are willing to do anything they can to make a buck.  What is unfortunate is that so many of us have been screwed by some one like that, that we become cynical.

So whether you are an auditor only business or a full service auditing business, both have their advantages and disadvantages.  I personally think that being a full service auditor adds value for the homeowner and keeps them from being left to finn for themselves when it comes time to finding the contractors to do the work that has been recommended. Let's face it, there is plenty of room for them to get screwed there too.  That said, I respect those that choose to remain independent.  As long as you are up front with the homeowner before you step foot into the door, I don't see a problem with either.  RESNET standards actually require a conflict of interest document to be signed before the rating is performed, so the hiring party knows if there is further involvement during or after the rating.

Bob,
I agree with you about his, but I'm in a situation where I'm wrestling with it. In upstate NY, there aren't enough weatherization businesses to handle the work I'm generating. Both the weatherization companies in the area, and my customers have asked me to jump into the business. I'm considering it because It will have the effect of generating more jobs and providing a much needed service, but I am uncomfortable with the conflict.
Thanks for posting the question, I'm interested in hearing what people think.

Dave

Dave

Why wrestle with it?  Lets look at the indicators.  There is more demand than supply and your customers that already trust you are asking for the service.  Even your potential competitors are asking you to offer the service, which helps to raise awareness of our industry.  Even your potential competitors are suggesting you offer the service.  You said it yourself, "it will have the effect of generating more jobs and providing a much needed service".

Guys, we are being handed an incredible opportunity to bring our industry to the fore front in an economic time that is looking for people with the balls (sorry ladies) to do so. Dave, I assume that you are a good guy and always keep your customers, best interests at heart.  Let's get out there and prove to people that we can hold our industry to a higher standard while we make an honest living for ourselves and those associated with our businesses.  Take the time to form groups that can promote each others businesses while exposing those that take advantage of homeowners.  Stop looking at this as a potential problem, but as a potential opportunity.  If you are completely up front with your current and potential customers and keep their best interests at heart, there shouldn't be a problem.

Massachusetts is so far behind it is sad.  I wrote my first energy audit back in 1978 that was promptly preempted by the State's free audits.  Now all the auditing is done by a handful of "lead vendors" working for the utilities.  We are waiting for 8 weeks to get an audit done on our own house, and then we have to wait another 8 or so weeks before the work can get done.  The lead vendor doing the audit tells the homeowner that they can sign up to get the work done (oh and by the way we have this badly copied list of other people who might be able to do it if you ask about other contractors).  Independent auditors such as our company cannot get all the benefits for the homeowners that the lead vendors can get.  Independent auditors are essentially locked out unless the homeowner just wants to pay for comprehensive information out of pocket.  We have trained dozens of BPI Analysts that can't get work.

As a California state licensed general contractor with over 30 years of residential construction experience, and a BPI certified Building Analyst and Envelope Professional with almost 5 years of home performance experience in treating the house as a system, I can't imagine doing an audit and then allowing someone else to perform my prioritized list of solutions.  In fact, I'm trying to do a better job at qualifying my clients before I schedule an audit to insure they have the funds as well as the intent to proceed with the necessary work.  An audit is of little value if it isn't acted upon.

 

My approach is the same as many of you, that is to test in, propose, remediate, test out, then follow up.  I try to craft my prioritized list in a way that allows them to make a real difference over time.  I've yet to meet a client who has had the necessary funding to complete the wholesale revisions many homes require.  I like to create budgeted scopes of work (plural) that allow them to spend their money in the most sensible and logical manner possible, as their income stream allows.  If I do my job right, and gain their trust as I should, then I can complete the work over time without concern that some other unqualified individual will get involved and screw things up.

 

In summary, I not only don't think there is a conflict, I think we should be encouraging more auditors to become licensed and insured so they can, in fact, legally perform the necessary work.  Doing so will not only improve your bottom line, but make you a better auditor.

Ron, I'm not suggesting there aren't good people out there that do the right thing.  But I have to believe (and have seen) business pressures to sell work turn that potential conflict into reality.  I think its just human nature. How do you account for ASHI not allowing home inspectors to do the same thing?  Isn't that the identical situation?  Why would their professional organization in a closely related field think differently?  I'm sure there are honest home inspectors too.  I can point to other professional organizations involved with IAQ and mold remediation that feel the same about the potential conflict as well. Besides, some of us auditors don't feel like our business is or should have to be contracting too.  That aspect is just not our expertise.  Unfortunately the institutional pressure is all or nothing here.
Ron, what is interesting in following this thread is the different opinions and stances based on where we live. I live in GA (break out the banjos) and it turns out we have a fairly aggressive stance when it comes to energy efficiency and trust me, the good ol boy network is alive and well. BUT where we live shouldn't matter, because WE have to take the bull by the horns and push for what we think is right.
As far as expertise goes, if you are an experienced auditor, are there really more people out there with more expertise than you? I am not a contractor, but I have taken the time to find qualified contractors I can trust and work with. Basically you become a project manager. Isn't that what a GC really is? Who is more qualified to be an advocate for your audit customers than you? AND, there is nothing wrong with getting paid to be that advocate, espescially if you keep your customers best interest at heart.

In Missouri's most recent rebate incentive program, paying up to 70% for energy upgrades recommended as a result of energy audits, 7.5 million dollars was obligated in less than two weeks with contractors performing "audits" presumably conducting more than five per day according to some reports.  Do the math.

Is it reasonable to even ask a struggling contractor who sells insulation or windows to recommend any other expenditures that might compete with his need for a sale?

The problem with BPI is that you either have to be a contractor or work for a contractor to make any money. It appears that the agenda of BPI is to advance their interests through control over the construction industry. This obviously means insulation, window, heating contractors etc. This is a major income source for their operation. BPI says you can make money 'refering' a BPI contractor after you perform an audit and do all the leg work, advertising, sales etc. for a few pennies of what the contractor will get.

Too bad that there is no place in the system for an independent BPI Auditor. The attrition rate of new auditors leaving after a short sprint speaks for its self.

We will eventually only have BPI certified contractors.

 

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