Rick Gerardi's case for a "Performance Registry"

Replies to This Discussion

Permalink Reply by tedkidd on September 10, 2012 at 2:38pm

Bruce,

I think the homeowner would prefer to work with someone who can deliver on promise.  

Frankly, tracking by contractor might benefit the small contractor more than it benefits the large one.  The cream could rise to the top, incentive and reward for high quality work would be more than simply "reputation".  A registry would allow contractors to have a light shine on their successes.  

It's pretty clear that administrative burden should not be on contractor, big or small, for this.  Another reason to keep them out of it, avoid the potential for having numbers gamed.

• ▶ Reply

Permalink Reply by Tom Conlon on September 10, 2012 at 1:39pm

The fragmentation of the home repair and renovation industry is legendary, and remains perhaps the biggest barrier to realizing Gerardi's ambitious "big data" vision. But that doesn't make it a bad idea.

I have long anticipated that one or more major national corporations will eventually step up to offer a branded home asset management service (bundled with affordable improvement financing)... a kind of "whole-house TruGreen/ChemLawn" if you will. When they do, such a performance registry would be crucial to measuring/managing their far-flung network of service providers to deliver a consistently satisfactory customer experience.

For now, costs remain much too high for such a national B2C business model to pencil (that's why most of the folks you see making money right now are usually selling B2B franchises, training, equipment, and software). But you can be sure Sears, ServiceMaster, Masco, HomeDepot and others are all biding their time and watching closely to see how this all shakes out.

While we wait for a rationale for a proprietary performance registry to mature in the private sector, I have a hard time imagining any single trade association, utility, or government agency adequately fulfilling this function.

Who does Rick think should build it? (I couldn't tell).

• ▶ Reply

Permalink Reply by tedkidd on September 10, 2012 at 2:52pm

That's a guy with a 30,000 foot perspective.  

"Energy saving" websites don't get it, or even get what saves energy.  

• Zillow is really well positioned, but apparently don't even see energy as being part of home buying.  
• Google gave up (long before green button), probably they thought it would only work if they could tie to the utility data and that looked impossible.
• Facebook - make an address a person? Timelines?
• Opower doesn't want to bite the hand that feeds it, so very gradual (good for the utility) savings is their goal.  
• BPI should do it, they need a powerful value add or their sails will completely depend upon programs.  
• Programs should do it so they can justify their existence, but somehow 50% realization isn't abysmal fear of job loss failure, and driving by out the rear window 3 years back is considered "on time" management in government.   

Seems nobody cares enough to roll up their sleeves.  Tom, wanna form a collaborative group and build it together?  

• ▶ Reply

Permalink Reply by Tom Conlon on September 10, 2012 at 7:14pm

Thanks Ted (actually I was just at 35,000 feet, flying over the badlands of Utah).

Lots of us have our sleeves rolled up, but sometimes it seems that for every shovel of dirt we remove, some other earnest colleague seems to spill half of it back in.

Personally I think contractors need easily searchable permit compliance registries more than a verified retrofit savings databank. In jurisdictions where these already exist, they help the truly qualified contractors squeeze the fly-by-nights out of the market so that consumers never even get to consider their sub-par options.

• ▶ Reply

Permalink Reply by tedkidd on September 10, 2012 at 8:20pm

I figure we are all always improving, all always making mistakes, and should all have our results tracked. This is a game everybody gets to play. Exclusivity fails IMO.

Contractors that fly by night will have crappy results, big and small contractors with high skill will have great results.

Homeowners will have a way to truly differentiate rather than pin hopes on a salesperson who may or may not ever have even seen a completed installation.

• ▶ Reply

Permalink Reply by Matthew Redmond on September 13, 2012 at 8:07am

Home Performance with Energy Star = HPwES. As usual Rick is well ahead of the curve. I agree with Rick that blower door #'s and computer modeling are not enough to attain an accurate assessment of energy savings from performance work completed. Only pre and post utilty bill interpetation, ie. electric ,oil, gas, from the same HDD periods will work to get an accurate rate of energy savings. Of course this accuracy is dependent on occupant status remaing the same througout the monitoring period.....

• ▶ Reply

Permalink Reply by tedkidd on September 13, 2012 at 8:21am

While day by day, week by week, or month by month occupancy and weather may vary too much for high statistical confidence (2 week vacation was January 10, and march 11), once you get to year by year its surprising how much these variances flatten out.

Hopefully global warming won't make weather variability so great we have to attempt normalization, I have no confidence normalization isn't totally building dependent (ie: not terribly useful). Last years mild winter I'm pretty much throwing away.

• ▶ Reply

Permalink Reply by Dale Sherman on September 13, 2012 at 12:06pm

Rick has laid out a great framework for moving the energy efficiency (EE) market forward and helping it mature to where it needs to be, on par with the public awareness of MPG.  One approach to get homes registered more quickly would be to use a hybrid of short-term energy monitoring and predicted usage, along with incentives to participate. 

In the early '90's I worked on a project with Synertech, NAHB, and NYSERDA to accurately quantify the energy signature of a home in one cold night.  It was called the Measured Performance Rating (MPR) System and involved a lot of monitored data and modeling to quickly assess the effectiveness of various weatherization measures.  A simpler version using today's data acquisition equipment to grab, say, one month of before and after data coupled with Heating Degree-Hour (HDH) to give us an accurate snapshot of a home's energy usage.  Coupled with modeling software to project forward (or backward) one year allows us to get a home into the Home Performance Registry with credible data.  As monitoring continues, utility and fuel vendor bills can be used to refine the hybrid monitoring/modeling data in the registry. Contractors' homeside manner and predicted savings accuracy could also be a part of the Registry similar to Angie's List, as Rick suggests. 

Keeping registry participation voluntary with incentives to participate would keep the Home Performance Rating (HPR) more receptive to the general public.  The homeowner can select whether to have his/her address show, or just his/her zip code.  Allowing the public to select any zip code and see how other homes in their area and elsewhere perform compared to their own home is key to driving the market. Displaying Btu/sq.ft./DD and kWh/sq.ft./DD (normalized for 2 people) would be two simple numbers, much like city/highway MPG.

So, where do we keep this Home Performance Registry?  Should it be a Home Energy Pros and LBL database? DOE, WAP, BPI, or RESNET database?  Does it need to start up in a couple of states and transform to a national platform? 

I must add, it's critically important to weigh in with many ideas and list all the possibilities for moving Rick's concept forward; naysayers need not weigh in during the brain fertilization period. The best ideas will gravitate to the top at which time issues can then be raised and addressed.

• ▶ Reply

Permalink Reply by Pat Dundon on September 13, 2012 at 7:51pm

Rick,
I r a contractor not a bureaucrat, so I sez what I think, perhaps too often.

We have been working with HPwES in NY for about 10 years now and I personally share the blame if it fails. I was one of the folks at the table when it was developed. Unfortunately, since I am as political as a steamroller I lost touch with the program oversight folks several years ago.

I do think it is not developing as intended and I do not think more rules, reporting, or regulation is going to fix it. Only in NY would the price of fuel used to calculate payback be simply the price of fuel, excluding surcharges, taxes, and delivery charges.

But I digress.

There is no compelling economic argument that can drive folks to spend several thousand dollars to weatherized their home.
There are dozens of respected, experienced, reputable, even revered tradesmen in all of our markets who do work wrong every day because that is how they have always done it. Many of them are 3rd generation tradesmen who learned long ago it is cheaper to vent that bath fan into the attic, 80% furnaces are 'high efficiency' simple to fix, cheap to buy, and profitable, people will pay way more for fancy windows and granite anything than they will for insulation, and HOUSES HAVE TO BREATH. For every one BS contractor. (building science, not the other BS) there are 10 of those guys.
Funny how those same guys will call the BS'er to save them when things go wrong with their approach.

In short, market forces oppose this business completely. And as long as so many 'tradesmen' feel it is easier and more profitable to avoid home performance that will not change.

We set up a program that relies on incentives. Those incentives have strings, they come fom dep pockets that want no liability, so they require BPI certification and accreditation. That brings rules, paperwork, more paperwork, hours spent at meetings trying to figure out how to do his better, cheaper, faster. We're it not for this program, I could reduce my office staff by 1/3 and save well over $50000 in overhead per year. The admin involved in assisting clients in navigating the paperwork maze is incredible. Me being the only contractor in my county, and the adjoining counties who says a ventless fireplace should never be in a house, we cannot insulate because your 2 month old orphan water heater will not vent now, that furnace needs an exterior combustion air inlet, flexible metal vent pipe is not acceptable on the dryer, the water heater needs a discharge pipe on the TPR valve, we have to check for gas leaks all the way back to the meter, etcetera and document it all, is absolutely nuts.

The cost of an attic job in 1999 was usually 1500 or less, now it is 3500 or more, and I don't net out as well as I did when it was 1500. That sucks.

What we did wrong was we created this beast that added all kinds of costs and time penalties for contractors, then we did not go to the market with a strong consumer education component. If consumers recognized a BPI accreditation as a benefit to them my job would be much easier and we would have real market transformation.

What the programs do wrong is they make it impossible for contractors who drink the kool aide to compete on an even footing with the guys that dont, then they expect those contractors to do all the marketing for the program and BPI.

10 years in it is a disgrace that when I google BPI I get a Beef Products website. By now BPI should be the Consumer Reports of remodeling and building and clients should be asking GC's to use BPI accredited HVAC and insulation folks.

There is hope. I think folks are starting to try to envision the end of the rainbow and those staffers at BPI don't want to evaporate with that rainbow. There is a period of pain coming, no doubt, but I think it is possible for BPI to gain consumer awareness, the price of fuel is so fickle, the Arab spring is turning into an American nightmare, perhaps these programs will end with a whisper. Then my admin budget will shrink, my prices and blood pressure will go down, and profits will go up.

• ▶ Reply

Permalink Reply by tedkidd on September 13, 2012 at 10:09pm

AWESOME POST PAT, I'm feeling much less lonely.  Man did you poignantly bang the wack a mole on the head a bunch of times.  Thanks for contributing.  

Let's flush out two parts of this a bit further: 

There is no compelling economic argument that can drive folks to spend several thousand dollars to weatherized their home.

 

So, who is to blame for the "economic argument" orientation?  I don't think blame falls upon the consumer.  Look at every part of this program, it is completely "good" or "bad" investment oriented.  "SIR, Payback, IRR," these are all at the very front of everything.  Such an unsophisticate, hyper-symplistic perspective, and completely wrong.  

 

If the program is about "telling" homeowners what is or is not a good investment at every step, of course that's the orientation they'll take.  It's not their fault, the program took them down that path!  Look at windows.  

 

Do people buy window for energy savings?  NO.  They buy them for a whole bunch of reasons and HOPE for energy savings.  Right now that's what happens with program work, they buy the improvements for a whole bunch of reasons and HOPE.  They secretly laugh at the reports:  "Yeah, like I'm gonna count on those savings", and they are RIGHT!

 

If consumers recognized a BPI accreditation as a benefit to them my job would be much easier and we would have real market transformation.

Propaganda only goes so far.   It might slightly improve recognition, but would it really increase uptake?  I'm doubtful.  With program realization abysmally low, the propaganda rests on smoke.  I believe the credibility of NY HPwES and BPI are beyond hope of PR correcting image or goodwill.  Only truth will fix it. 

What truth?  Truth about cost.  PEOPLE WANT TO KNOW WHAT THINGS COST.  They want to know if they can afford them.  They want to know that they won't get hurt.  

If the program could deliver on promise, and back it up in such a way consumers would have very high confidence in savings, they would make net cost decisions.  We could present our projects as Net Cost:  

Mrs Smith, you called us in because you want to correct a and b problems.  We discovered some additional issues you weren't aware of, and came up with a laundry list of potential improvements.  Then, looking at your budget, and prioritizing your areas of concern, we attempted to design a package of improvements to do now that fit your budget and solve your problems, while at the same time making your house more durable, more comfortable, more healthy, more valuable, and significantly cutting your energy costs.  And the really good news, the energy savings pays for more of the improvement than you do.  Money you will no longer be wasting on energy will help provide a better home for you and your family.  

This is how it works Mrs Smith.  Your monthly out of pocket will be $43.  The remaining $90 will come from your energy savings.  You currently spend on average $270 per month, and our models say these improvements will reduce that to $180.  Oh, and unlike your energy bill, the monthly charge for these improvements eventually goes away.  Now you may wonder what level of confidence you can have in your bill dropping by $90, well if you go to the contractor registry all jobs are tracked, and you can see what our ability has been to deliver on promise.  

On average we have been able to deliver 98 cents on the dollar promised with a deviation of 5 cents either way.  This means worst case your savings will only be $86 dollars, best case it will be $94.  But since you said your budget for fixing problems and improving your home was $60 a month and your worst case net would be $47, we are well within your budget.  

When you tell someone a project costs $25,000 and they are going to save $90 a month, how are they supposed to make heads or tails of THAT!?  That doesn't sound affordable, and it doesn't sound like it won't  hurt.  That presentation sucks, but that's what they give us. 

Mrs Smith is not related to Warren Buffet, she's not looking for 20% annualized after tax returns on the $25,000 she doesn't have.  She's concerned about making payments on the $25,000 she needs to improve her home.  She loves her home, she lives in her home, she wants a nice home.  

But she wants to know what it will cost.  

 

The program we currently have can't honestly tell her that.  Certainly none of the contractors I talk to have any idea how their projects perform relative to promise, and NYSERDA isn't telling them.  Why this doesn't get contractors angry is beyond me.  Don't they want to know how they are doing, and when they don't do well be able to go figure out what went wrong? To get better at delivering truth?  

If we want to truly differentiate from the "same guys will call the BS'er to save them when things go wrong with their approach."  it won't be with shiny ads from BPI, it will be from tracking ability to deliver.  Proving performance to the consumer.  Proof, not smoke.  

 

I've been in a lot of homes where 60% furnaces were replaced with 95% furnaces, so grossly oversized they never condense, and the bill didn't change.  When we can show our jobs net cost, possibly even show how they net cost less than the cheap approach, then market transformation will occur.  

 

For market transformation to occur, this program needs to offer some truth.  

• ▶ Reply

Permalink Reply by Pat Dundon on September 14, 2012 at 6:09am

Rick,

Make this less glassy and mor practical.  I r a contractor, not a bureaucrat. 

We are 10 years in in NY and we have little to show for it in my opinion. 

Why?

Contractors generally are not innovators.  they are guys who see what works and follow that until it doesn't work any more.  an 80 % furnace works.  it doesn't cost a lot and it doesn't take a laptop and degree to fix it if something goes wrong.  better yet, in today's marketplace if Mr HVAC tells his clients it is energy efficient, it is, and MR HVAC can make thousands of dollars without changing a thing.

Folks who own the houses these guys serve don't know anything about our work and don't really want to figure it out.  they want to believe their friendly HVAC guy has their best interests at heart. 

the HVAC folks are not the only problem, then there are builders who continue to want to do stuff the way it was done when their dad taught them the business 40 years ago. 

who can blame consumers for believing all these reputable long estabilshed 2nd and 3rd generation businesses when they say this is the best and it is energy efficient. 

then public money comes to call and says we want to fix this but we  cannot afford any liability.  So, they do the only thing government can do, they hold endless meetings and throw money on the table, then put lots of rules in place to prevent someone from scamming the money.  unfortunately, scammers are smart and they adapt, so the rules get to be a real obstruction to the honest guys, and that brings administrative burden that is expensive.  That makes the honest guys look like crooks too, and it severely impacts payback calculations.  one of the rules is the price of fuel does not include the taxes, surcharges or delivery costs associated with the fuel.   that impacts the payback calculations.  To avoid liability BPI was brought to the table.  then BPI said we just want to make the rules, we don't want liability either, so we don't train, and we don't endorse anybody or any thing, we just say this guy and that company understand the rules we created.  then, Government forces any participants to get the BPI certifications, and BPI makes that expensive, so BPI has a dependable, steady income stream. 

BUT, no one tells BPI to prove their value in the marketplace,  and BPI gets real comfortable being the gatekeeper to the funding.  it is a disgrace that 10 years in BPI is still a complete enigma to the consumer.  the rule we all forgot was to force BPI to get consumers to recognize them as the agency they should defer to for 'TheTruth'.  BPI should be the Consumer Reports of remodeling by now.  if they were much of the rest of these problems would have already disappeared. 

if HPES fails it is becasue we have not faced this dynamic yet.  with the rules as they are now, it takes about a month minimum to go from the initial vist to the home to a contract.  often it takes 6 weeks or longer.  during that time the contractor or his office is engaged in several days worth of auditing, reporting, and shepherding loan paperwork.  we all know the software we use is inadequate.  we all marvel in the fact that we cannot get the utilities to allow us to simply download historic utility data into the software like they can in Georgia.  the program software never agrees with the billing data on the first run through, so we have to 'adjust' the building model to so the software can be right.  it doesn't matter what reality is,  the model has to reflect the bills, so add a dehumifier to add electric use, set the stat to 85 to reflect the gas bills, if the walls are empty, but your billing is way low compared to the model, call them insulated and fugetaboudit etc. 

10 years in, NYSERDA must have some history to show.  they must have some idea of how successful these jobs have been and by looking at the geography they must have some idea of who is doing it right.  somehow, they need to use that data to coax the market.  i do not have the time or the staff to go to my clients and try to document the savings I have created.  i am too busy trying to get the software to reflect reality and be sure all the nits the QA can find are corrected. 

i think the incentives are ther own downfall.  I think it is criminal that BPI is not a household name now.  I think these problems are fixable, but it is going to be painful.  here is what we should do. 

BPI should spend 35% of their budget on marketing.  staff salaries should be dependant upon how many new contractors sign up because a consumer told them if they didn't get accredited they could not work on their house.  we should see BPI contributing in household places, like Good Housekeeping, Money, Family Circle, Better Homes & Gardens, with columns on Carbon Monoxide, return on investment, mold, durablility, etc.  why does the BPI professional check my water heater for draft with the bathroom fans running?  My HVAC guys never do that.  why does a BPI inspection include looking for gas leaks all the way from the meter to the devices?  My HVAC guys say that is not the way it is done.  why does my insulation contractor hace to do a blower door test before and after they do work?  they guy who did my neighbor's house doesn't know what a blower door is.  waddaya mean we get sleepy when we cook turkey because of Carbon Monoxide, not turkey fat?  does that explain why wives in the 50's were always portrayed as daffy? 

there should be no contractor incentives for doing work. 
there also should be no requirement for payback in a certain term. 
there should be no software or modeling involved at all. 
there should be no requirement for BPI certification or accreditation. 
there should not be a requirement for Continuing Education. 
there should be no incentive for hiring folks.
there should be no incentive for buying equipment.

wait for it.

a datbase should be developed for reporting fuel use. 

the utilities and the delivered fuels folks should be required to report historic use data and current use data in a form that can be tabulated in that datbase.  they should get some sort of financial incentive to develop that reporting system or government should develop it for them and they should be required to use it.    

the only contractor incentive should be $0.05 (pick a number) for every btu of savings created.  convert KWH, gallons of oil, therms, gallons of LP, cords of wood, etc to btu's and only pay for documented savings through actual monitoring of bills.  this incentive  should be paid quarterly for at least 5 years after date of service.  any confirmed and unmitigated health & safety issue diminishes the base incentive multiplier by 35%.  Two in one year makes the contractor ineligible for any incentives for 5 years and immediately terminates any current incentives.  any 12 month period with no health & safety questions or investigations, or consumer complaints increases the incentive multiplier by 15%.  consumers should know this and be able to look up what incentive rate their contractor is receiving. 

there should be a robust Q&A process funded by the money saved when other incentives are discontinued.  it should be focused on finding any health & safety issues that are actually threatening and reporting on those, but stuff that is not currently an issue recognized by the market should be considered a training opportunity and treated as such.  there is a difference between not venting a water heater outside and not putting the discharge pipe on a TPR valve.  this needs to be better fleshed out through a discussion among contractors and adminstrators. 

in this system, the market will encourage contractors to get trained, stay current, and do good work, but it will not suffocate them with software modeling or paperwork. 

the piece of the puzzle missing here is consumer incentives, which should just be buying down interest rates on weatherization loans, and grants like the ones currently available for consumers below 80% of the median income in their county.  the 10% High Efficiency Measure Incentive is nice, but the strings attached for the contractor inflate the cost well beyond 10%.  take that away and invest those funds in a better grant or loan product, or use them to create that utility database. 

then, we have a market based system and we can get rid of tons of unnecessary administrative burden. 

 

• ▶ Reply

• ‹ Previous
• 1
• 2
• Next ›
• Page