Can Energy Inspections Become a Viable Revenue Source for Home Inspectors? Simple question; not-so-simple answer.
The challenge begins with defining the service. The term energy inspection is sometimes used interchangeably with rating and audit, yet each term also is used to describe a specific service. Then there’s the matter of demand. Will the public’s current interest in lowering utility bills or buying energy-efficient homes translate to paying for inspections? And, if there is a demand, how do home inspectors become qualified energy inspectors, and can they compete with certified raters, auditors and installation providers, not to mention the window companies that offer free audits as sales incentives?
The ASHI Reporter spoke with training and software providers, non-profit energy organizations and home inspectors to learn about the current and future market for this type of inspection.
The Energy Inspection
Ed Voytovich, technical director for Absolute Home Inspection, is recognized within the industry for forging relationships between the home inspection and building performance professions.
He explained, “As an ASHI Member and as a person with a background in the new, but rapidly growing, building performance industry, I am all in favor of encouraging inspectors to be trained to advise clients about energy saving improvements. We have, in fact, been working on several fronts to create stronger ties between the home inspection and building performance industries.
“Since poorly executed energy-saving improvements can cause more harm than they do good, it is important for inspectors—even as generalists—to be educated in building science. They need a clear understanding of the house as a system in which the structure, the people and the mechanical equipment interact constantly. Inspectors also need to be well-informed about combustion safety and indoor air quality when they make recommendations. They should understand the basics of heating and cooling load calculations, duct design and performance, air leakage rates and minimum ventilation guidelines, moisture management, insulation types and performance, and the impact of all these things on the most important consideration: the health and safety of the occupants.”
Steve Luxton, technical manager for CMC Energy Services, described an energy inspection in terms of how the home inspectors he trains use the software his company sells.
He said, “Energy inspections provide homeowners with a blueprint that shows how to operate their homes at maximum efficiency and minimum cost. The energy inspector examines the house—checking insulation, windows, heating and cooling systems, the water heater and appliances, and looking for cracks and gaps where air may be entering. The inspector’s observations are analyzed using proprietary software to produce a detailed report.
“Since home inspectors look at the same things during a general home inspection as during an energy inspection,” he said, “the energy inspection requires little additional time. Home inspectors can easily add this service. When done as a stand-alone inspection, it takes about one hour.”
Affordable Comfort Inc. (ACI) bills itself as the source for building-science solutions. ACI’s Linda Wigington, manager of program design and development, suggested that the role of the home inspector might be to determine if there is a need to refer the client to a home performance contractor, who will look beyond the reduction of energy use and cost to air quality, moisture and more. ACI approves HVAC contractors/ installers who look at how new and existing houses perform in terms of health, safety, durability, as well as the reduction of energy use/cost.
Voytovich sees much the same role for home inspectors. “The key is to bring in trained professionals who can manage the complex issues of Building Performance. I agree with her 100 percent,” he said. “That’s where a certification for home inspectors from The Building Performance Institute (www.bpi.org) could come into play. There’s a great potential revenue stream for inspectors who become trained and certified consultants in the Building Performance sphere, and who can act as third-party advisers and direct their clients to a class of contractors who are trained and certified experts in this field. I believe this would be entirely consistent with the ASHI Code of Ethics, and it would benefit both the inspectors and their clients.”
Ratings, audits, weatherization assessments
The Residential Energy Services Network (RESNET) is a non-profit organization, that accredits home energy-rating providers, energy rating-training providers and home energy-rating software programs. Its mission is to ensure the success of the building energy performance certification industry, set the standards of quality, and increase the opportunity for ownership of high performance buildings.
Claudia Brovick, RESNET public affairs director, explained that a rating is an actual number that is used for specific purposes. Contractors are allowed to become energy auditors, but the code of ethics requires full written disclosure that they are contractors as well as raters.
Home-energy ratings provide a standard measurement of a home’s energy efficiency. There are two types of ratings:
Projected ratings – Ratings performed prior to the construction of a home or prior to the installation of energy im-provements to an existing home.
Confirmed ratings – Ratings completed using data gathered from an on-site inspection, which could include performance testing of the home.
Confirmed ratings involve an on-site inspection of a home by a residential energy-efficiency professional, a home- energy rater. Home-energy raters are trained and certified by a RESNET-accredited home-energy rater training provider.
The home-energy rater reviews the home to identify its energy characteristics, such as insulation levels, window efficiency, wall-to-window ratios, the heating and cooling system efficiency, the solar orientation of the home and the water heating system. Performance testing, such as a blower-door test for air leakage and duct leakage, is usually part of the rating.
The data gathered by the home energy rater are entered into a RESNET accredited computer program and translated into a rating score. The home receives a score of between 1 and 100, depending on its relative efficiency. An estimate of the home’s energy costs is also provided in the report. The home’s energy rating is then equated to a Star rating ranging from one star for a very inefficient home to five stars for a highly efficient home.
Unlike an energy audit or a weatherization assessment, a home-energy rating is a recognized tool in the mortgage industry.
There are two types of energy mortgages:
Energy-Improvement Mortgage – Finances the energy upgrades of an existing home in the mortgage loan using monthly energy savings.
Energy-Efficient Mortgage – Uses the energy savings from a new energy-efficient home to increase the homebuying power of consumers and capitalizes the energy savings in the appraisal.
Vendors, energy organizations and home inspectors all agreed that the key to demand is educating the public and the housing industry on the benefits of residential-energy efficiency.
According to ACI’s Linda Wigington, “Due to increased consumer awareness, the market for home-performance professionals (house diagnosticians, performance testers, mold remediators, building scientists and other related specializations) is growing rapidly.
CMC’s Steve Luxton agreed: “As energy prices go up, homebuyers and owners increasingly feel the pinch of the second largest expense of a home—energy costs. And yet, simply by upgrading the energy technology in their homes, homeowners could save an average of 25 percent on their utility bills and make their homes more comfortable and valuable. This reduction in energy use also would benefit the environment, reduce the pressure on further price increases, create more jobs and lessen our dependence on foreign oil. How can we persuade homeowners to invest in energy improvements? By showing them that they will come out ahead if they invest in upgrading the energy efficiency of their homes, since their monthly energy savings will be greater than the monthly payments to cover the cost of their investment.”
ASHI has approved a number of energy-related courses for MRCs, including Affordable Comfort events. CMC Energy Services reports it has trained 800 home inspectors and is now teaming up with Kaplan/Inspection Training Associates (ITA).
Voytovich described the push for training in his state: “Here in New York State, we are close to finalizing the arrangements to offer building-performance training to home inspectors in a series of courses that will travel around the state. The Building Performance Contractors Association of New York is developing this program. The New York State Department of Energy and Development Authority will significantly help with the funding for curriculum development and the actual sessions.
We are working to arrange Continuing Education credits for inspectors, and we’ve even talked about offering a certification for home inspectors."
The ASHI advantage
ASHI members who choose to add this service might have an advantage because they can market themselves as professionals who have no actual or perceived conflicts of interest. What are the odds that the free “audit” conducted by the window company will determine that new windows are needed? Is there the perception of a possible conflict of interest when an installer is also an auditor or rater? If ASHI home inspectors choose to offer energy services, they can do so without actual or perceived conflicts of interest. The homeowner or buyer can use the inspector’s recommendations to hire a full audit or rating, or research the energy advantages of specific components identified in the report. As with all home inspections, even those with additional services such as radon testing or water testing, the home inspector has nothing to gain or lose by the results of an energy inspection.
In addition, it would seem that energy inspections are consistent with ASHI’s commitment to serving the public and promoting home safety.
“From my point of view (and I’m sure RESNET and ACI are with me on this), Voytovich said, “energy savings are a good thing only after everyone is certain that the health and safety of the occupant will not be endangered in any way as a result of the work. To give a short example: In the uninsulated house of a client in a cold climate, two unvented gas heaters were in use. The occupant reported that there used to be heavy condensation on all the windows, but she had new high-efficiency windows installed and the problem went away. In fact, the problem was made worse. Whereas the old windows were dehumidifying the inside air that was saturated with water vapor as a product of combustion, the new windows stayed above the dew point and no condensation took place on them. The moisture was driven instead by positive pressures into wall openings on the second floor and into the attic space, where it condensed on cool wood surfaces and made it possible for mold to grow—and possibly cause eventual health or structural problems. People who make significant changes to buildings need to be able to foresee the potential negative consequences of their work. This is where the training comes in.”
Answering the question
All aspects of building performance, including energy efficiency, would seem to be a natural for home inspectors. As one ASHI member said after attending energy-inspection training, “Although I’m not conducting energy inspections, I learned about every component of home performance—how things are tied together, and I’m a better home inspector for knowing this.”
The verdict still may be out on energy inspections as a source of additional income for home inspectors, but vendors, energy organizations and some home inspectors seem to believe consumer education will increase demand, and with the appropriate training, tools and techniques, home inspectors can find a place in this field.
ASHI home inspectors who have successfully incorporated energy inspections into their services are invited to share their experiences by e-mailing firstname.lastname@example.org.