"Kitchen Table" Strategy: Home Inspectors Driving Demand for Home Energy Upgrades

February 2012

“Although the home performance industry's delivery of comprehensive energy and comfort improvements has been growing across the country, it continues to struggle in creating consumer attention and demand. Our industry's delivery timing is off. We are not yet engaging the homeowner at their sweet spot of making improvements -- right after they purchase a home! This is when they move most aggressively with all sorts of home improvement projects -- and, unfortunately, seldom with any concerns of energy use. I strongly believe the home inspection industry is in a prime position to educate new homeowners on the long-term value of a high-performing house. There are millions of homes sold each year. Home inspectors are there; home performance is not. This must change."
-- Chandler von Schrader, ENERGY STAR Home Improvement Program

"Kitchen Table" Strategy

Nearly 10,000 times every day, home inspectors sit at kitchen tables with new homeowners -- BEFORE they even buy the house -- and educate them about:

how the home works;
how to maintain it; and
how to save energy.

Home inspectors are right now talking to potential clients of home energy professionals.

This strategy connects them. Energy education ultimately can create demand.¹

“The Department of Energy is working to develop a strong home retrofit industry. We are creating a state-of-the-art tool that home inspectors can use on a handheld device to assess energy-savings potential and identify the most effective investments to drive down energy costs.”

-- U.S. Secretary of Energy Steven Chu²

Meet Mr. and Mrs. Baker

Mr. and Mrs. Baker just found their dream home and, with the help of their home inspector and real estate agent, they are going to become new homeowners.

However, they’re unaware:

that their house is actually wasting money;
what their home actually costs to operate; and
how to save money by saving energy.

And they are about to spend thousands of dollars on "bling," home improvements and remodeling.

“New homeowners expect climate comfort in their dream homes. Most home energy systems are inefficient; i.e. uncomfortable and costly. Home energy contractors make homes climate comfortable. Pairing home inspectors with home energy contractors is a brilliant way to connect a comfort problem with a comfort solution.”

-- Stephen Michael Self, Sustainable Ideas

Here’s the Question

How can millions of other homeowners, like the Bakers, be persuaded to divert their valuable time and resources into upgrading their homes to eliminate energy waste, avoid high utility bills, and spur the economy?

Answer: Target New Homeowners

We need to:

target new homeowners;
educate them about energy efficiency; and then
connect them to their local home energy professionals.

Why New Homeowners?

Because that's where the money is.

We know two facts:

FACT #1: New homeowners are eager to start remodeling projects.
FACT #2: It is nearly impossible to sell energy upgrades to existing homeowners after they've spent money on remodeling projects.³

We must educate new homeowners before they begin their home improvement and remodeling projects.

$12,655:
The typical new homeowner spends $12,655 in the first year.⁵ A home purchase triggers a series of additional spending on appliances and renovation activities that exceed typical spending levels of non-moving owners, and spending persists for years after moving in.⁶

$8,500:

The Bakers will spend an estimated $8,500 in the first six months after moving in, and nearly $65,000 over the first ten years of their home ownership.

Remodeling:

500,000 remodeling projects occur every year, and energy-upgrade measures could be easily incorporated during them.

By their nature, home energy upgrades require substantial up-front investment in exchange for savings realized over the lifetime of the deployed measures. Therefore, it is critical to educate new homeowners about energy efficiency and home energy upgrades BEFORE they spend money.

Home Buyer Statistics

Today,

99% of all REALTORS® recommend a home inspection; and
most home buyers hire a home inspector.⁷

In 2011,

84% of all homes sold were existing homes;
typical home purchased was a detached single-family home, about 2,000 sq ft in size, built in early 1990's;
37% of all home buyers were first-time buyers;
most home buyers were married couples;
median household income of buyers was about $81,000; and
heating and cooling costs are important to most buyers.⁸

Ace® Targets New Homeowners

Starting in the first quarter of 2012, InterNACHI and Ace® Hardware will be conducting a pilot that will quantify how effectively home inspectors influence the purchase decisions of new homeowners. Ace® is providing $250,000 in Ace® Discount Cards for clients of InterNACHI inspectors in Colorado, New Mexico and Wyoming.

This is one way inspectors will influence the purchase decisions of new homeowners.

Mrs. Baker is taking an Ace® Gift Card, provided by her home inspector, and going shopping for weatherstripping and energy-efficient light bulbs.

⁹

How Can We Reach New Homeowners?

Ask any InterNACHI home inspector.

2 Million New Buyers

Over 2,000,000 times a year, home inspectors sit at kitchen tables with new home buyers, home sellers and their real estate agents, and the conversation over coffee is as much about home energy as it is about the home's condition.

Millions of Clients

Home inspectors also have a database of information on millions of their recent home-buying clients with whom they have positive, long-term relationships.¹⁰

Leveraging an Existing Workforce
Leveraging home inspectors’ existing relationships with new home buyers and real estate agents to deliver program messages can be a cost-effective way to increase demand for comprehensive energy upgrades.

The key to a successful home performance program, and the continued success of the home energy-upgrade industry, rests upon leveraging the existing, national workforce of trusted, third-party (neutral) home inspectors who can find and reach new homeowners (consumers), provide education using skilled communication, and motivate them to take effective energy-saving action.

Workforce Guideline Recommendations

Home inspectors make report recommendations based, in part, on the U.S. Department of Energy’s Workforce Guidelines for Home Energy Professionals.¹¹ These standard work specifications define the minimum requirements for high-quality installations of energy-efficiency measures by qualified contractors.

Home inspectors can help millions of homeowners find the qualified contractors -- home performance contractors -- to do the right work the right way. Watch how easy.

Customized Home Maintenance and Energy Saving Book

In 2012, InterNACHI will release its "Customized Home Maintenance and Energy Saving Book." The content of each book is customized to each homeowner and specific to their house. It includes staged improvements and upgrades based upon the homeowner’s needs and life cycle of the house.

Each book teaches the homeowner:

how their home works;
how to maintain it; and
how to save energy.

To produce a customized book, the inspector conducts a home inspection and collects data related to the home's condition and energy efficiency.

The inspector then enters the data into a web-based reporting tool and energy calculator developed by InterNACHI.

The energy calculator:
    •    estimates the home's yearly energy usage;
    •    pinpoints potential energy inefficiencies;
    •    calculates a score based on these estimates; and
    •    develops recommendations for energy improvements.

The book produces seasonal and yearly recommendations, including:

scheduled maintenance and service for all house systems;
appliance replacement and efficiency upgrades; and
home energy upgrades and efficiency recommendations.

The recommendations are customized to the homeowner and specific to their house. The book offers reliable and effective whole house packages of measures for every year of home ownership. They are tailored according to the house condition, its home energy efficiency and the major climate region with a clear focus on home energy upgrades.

Some of the recommendations are simple for a homeowner to do. Others require more effort and investment but promise large financial savings and reasonable return on investment over the years.

Trusted Home Inspector, Trusted Referrals

There are several benefits for the Bakers in hiring a home energy contractor referred by their home inspector.

The Bakers will enjoy:

utility bill savings of 20% or more;
less drafts and more comfortable rooms;
work performed by specially trained contractors;
third-party quality assurance to make sure the work gets done right; and
reduced greenhouse gas emissions to protect the environment.

Rather than focusing on a single problem, such as an old heating or cooling system, not enough insulation in the attic, or leaky windows, a home performance contractor looks at the house as a system and understands how improvements throughout the home can work together to give the Bakers the best results.¹²

A referral is a transfer of trust. Trusted home inspectors can refer their clients to home performance contractors.

¹³

Many energy-efficiency programs offer free or subsidized home energy assessments as a first step toward enticing homeowners to undertake home energy upgrade projects.

However, homeowners do not:

see the value of getting their home assessed by an energy auditor,¹⁴
nor trust recommendations made by home performance contractors or salespersons.¹⁵

Homeowners Trust Third-Party Advisors

Home inspectors play the role of the trusted, third-party advisors positioned to empower homeowners with accurate information so they can make informed decisions.¹⁶ Home inspectors address homeowners' concerns while also helping them find qualified contractors to perform home improvements and home energy upgrades. The home inspector's neutrality adds to the credibility of his recommendations, which engenders trust between himself and the homeowner.

Training: Sales, Communication and Customer Service

Home inspectors are trained in talking to homeowners. They speak their language. InterNACHI-certified home inspectors are required develop the skills necessary to effectively communicate to homeowners. Certified Professional Inspectors® are required to take courses on sales, communication and customer service.¹⁷

This online training is available to all home energy professionals, contractors, inspectors and auditors from InterNACHI. Continuous learning and mentoring opportunities are available to home energy professionals through InterNACHI's online and live classroom training and education curriculum.

Building science is complex and over-whelming to home owners. But home inspectors are trained to make things simple and clear to understand.

The home energy upgrade industry does not necessarily need more training and certification of contractors and auditors, but, rather, more home inspectors educating their clients about home energy upgrades.

¹⁸

Less than 25,000

Not enough work has been done. In 2009, less than 25,000 Home Performance with ENERGY STAR jobs were completed.¹⁹

Many American Recovery and Reinvestment Act (ARRA) and utility customer-funded, residential energy-efficiency programs are committed to developing a sustainable workforce of home energy professionals who will serve the market long after ARRA funds are spent. Much of the training has been focused on building science education and technical certification (e.g., BPI, RESNET). However, the increase in home performance contractors with technical training and certification has not produced a proportional increase in the amount of energy upgrade work.

The importance of engaging and educating the public in energy efficiency has never been greater. ²⁰

5:1 Ratio

Every single home performance contractor should know five local home inspectors.

Clearly, not enough energy upgrade work is being done. Phones should be ringing off the hook for energy upgrades, but they’re not.

Programs that succeed in performing a significant number of energy upgrades will leverage home inspectors as the program’s main way of reaching and educating new homeowners.

Public funding will not last forever, and in a self-sustaining market, home inspectors will be the primary agents in reaching and educating homeowners about home energy efficiency.

Therefore, the end-game for market transformation must leverage certified home inspectors.

Click on this 60-second video and turn up the volume!

From the last page of the Home Energy Inspection Report: Clients of home inspectors opt in to contact their local home energy professionals within InterNACHI's Network.

Leveraging Home Inspectors

Home inspectors, more than any other party:

are the people sitting across the kitchen table with millions of new homeowners every year talking about home energy efficiency; and
have access to consumers who may initially want to purchase "bling," but may be open to other improvements.

But the Bakers don't want to be overwhelmed with a number of metrics telling them how good or bad their home is regarding its energy efficiency. They need to be provided with a simple report and a single home energy label in a context they can understand and assign some actionable value to.

Increasing awareness of energy use and knowledge about specific energy-saving opportunities would enable homeowners to act more swiftly in their own financial interest.²¹

Through InterNACHI’s program, home inspectors use a simple tool that helps homeowners to easily understand the fundamentals of home energy efficiency. It’s called the InterNACHI Home Energy Inspection Tool – a web-based home energy calculator. This tool is open to all home inspectors.

Energy Auditors

Increased education and awareness of energy efficiency is a necessary component of a holistic approach to creating demand. It can be highly cost effective when home inspectors are leveraged.

Past research studies have shown satisfaction with energy auditors has been low for consumers. Clearly consumers are expecting a high level of education, information and tangible solutions from energy auditors. This suggests that to date, there has been a disparity in the expectation and actual derived value for consumers.²² Meaningful consumer education must start not with an auditor, but with a home inspector.

In 2012, there will be more than 2.5 million new homeowners educated by their home inspectors in ways that are meaningful.²³

Home Maintenance Book

Home inspectors are putting this home maintenance book in the hands of new homeowners every day.

The InterNACHI Home Maintenance Book helps homeowners:

make smart decisions BEFORE spending money on their home improvement projects; and
plan a strategy for making smart home upgrades that maximize energy efficiency and save the most money.

Green MLS Data

The most affordable way to accurately identify 'green' MLS features leverages the existing workforce of certified home inspectors.

Home inspectors are capturing accurate information for Green MLS data fields.

Listing agents are using home inspectors to accurately list the 'green' features.
Buying agents are using home inspectors to identify the 'green' features and the House Energy Score during a Home Energy Inspection.

Financing requires lenders that are willing, lenders require appraisals to underwrite their loans, and appraisers need data to support their valuations. Appraisers look to the Multiple Listing Services (MLS) and the local market for that data.

InterNACHI is developing new, creative approaches in the development and promotion of Green MLS data fields on a national scale. Having 15,000 home inspectors accurately identifying, capturing and providing data on 'green' features of millions of homes is a powerful way to promote the adoption of a standardized Green MLS.

For more information about home inspectors and the Green MLS, visit us at www.nachi.org/green-mls.

^24,25

The Time to Act is Now

Improving energy efficiency on a large scale is a challenge we can't afford not to take. While you were reading this information, Earth warmed up even more.^24,25

Most climate scientists agree the main cause of the current global warming trend is human expansion of the "greenhouse effect" -- warming that results when the atmosphere traps heat radiating from Earth toward space.²⁶

Increased frequency and severity of heat waves can lead to more illness and death, particularly among older adults, the young, and other vulnerable groups.²⁷

Homeowners can take simple steps to eliminate drafts, keep their home more comfortable year round, save energy that would otherwise be wasted, and reduce greenhouse gas emissions. Greenhouse gas emissions can be reduced through simple measures like changing light bulbs. If every American home replaced just one light bulb with a light bulb that's earned the ENERGY STAR, we would save enough energy to light 3 million homes for a year, save about $600 million in annual energy costs, and prevent 9 billion pounds of greenhouse gas emissions per year, equivalent to those from about 800,000 cars.

Nationwide Effort

A nationwide effort to improve the efficiency of America’s 130 million homes can:

create jobs;
reduce energy waste;
save our businesses and institutions money; and
reduce our dependence on foreign oil.

Our homes devour 23% of all U.S. energy. The U.S. consumes more energy than anyone else on the planet – about 20% of the total global demand. The nation's 130 million households and more than 74 billion square feet of commercial floor space account for:

42% of U.S. primary energy consumption;
39% of all U.S. greenhouse gas emissions; and
74% of all U.S. electricity consumption.^{28, 29}

The greatest potential for saving energy is making homes and buildings more efficient. Home energy upgrades made by home performance contractors can reduce energy waste in most homes by 20 to 30%.

Supporting the home performance industry will spur economic growth. Consumer demand for home energy upgrades will create hundreds of thousands of desirable green American jobs while stimulating the manufacture of building materials.³⁰

The time is now for all stakeholders in the energy upgrade industry, including the Environmental Protection Agency (EPA) and the Department of Energy (DOE), to recognize and leverage the existing workforce of certified home inspectors.

Join

One kitchen table at a time, home inspectors and home energy professionals can work together to make millions of U.S. homes and buildings more energy-efficient.

InterNACHI, the International Association of Certified Home Inspectors, is the world’s largest organization of home inspectors who perform nearly 10,000 property inspections every day. As the home inspection industry leader, InterNACHI supports policies that will create the foundation for a sustainable and scalable home energy upgrade market.

Join the InterNACHI Network by visiting us at www.nachi.org/energy-registry.

Contact:

Ben Gromicko

ben@internachi.org

1. Burrows, Kristi. Smart Energy Program Consumer Study, Understanding Consumer Lifestyle Drivers and Energy Attitudes as Motivation, Best Buy Consumer Insight Unit, September 2010. Best Buy - Home Energy Mangement Report.pdf

2. Chu, Steven, Op-Ed on Energy Efficiency from the World Economic Forum: http://energy.gov/articles/secretary-chu-op-ed-energy-efficiency-world-economic-forum. March 16, 2011.

3. Siniavskaia, Natalia, PhD., “Spending Patterns of Home Buyers. Special Studies.” December 4, 2008.

4. Lawrence Berkeley National Laboratory, “Driving Demand for Home Energy Improvements.” September 2010.

5. Siniavskaia, op. cit.

6. Siniavskaia, op. cit.

7. National Association of REALTORS®. Profile of Home Buyers and Sellers 2011.

8. Market Enhancement Group. National Association of REALTORS® Home Inspection Study. 2001.

9. National Association of REALTORS®, Pending Home Sales Index. http://www.realtor.org/research/research/phsbackground

10. Housing and Urban Development (HUD), “Annual Sales of Existing Homes .” U.S. Housing Market Conditions. Exhibit 7. Existing Home Sales 1970-Present. November 2010. Page 68.

11. U.S. Department of Energy (DOE). Workforce Guidelines for Home Energy Professionals. http://www1.eere.energy.gov/wip/retrofit_guidelines.html.

12. InterNACHI, Online Training and Education Curriculum, Required courses for home performance contractors who understand the house as a system, “The House as a System” http://www.nachi.org/house-as-a-system.htm, "Energy Movement" http://www.nachi.org/house-as-a-system.htm, "Comfort and Climate" http://www.nachi.org/comfort-climate.htm, "Indoor Air Quality" http://www.nachi.org/indoor-air-quality-course.htm. www.nachi.org/education.

13. U.S. Department of Energy (DOE). Report, "Motivating Home Energy Improvements. Focus Groups for the U.S. Department of Energy.” 2010.

14. Lawrence Berkeley National Laboratory (LBNL). “Contractor Sales Training: Providing the Skills Necessary to Sell Comprehensive Home Energy Upgrades.” August 17, 2011.

15. DOE, Report, op. cit.

16. InterNACHI. International Home Inspector Code of Ethics: http://www.nachi.org/code_of_ethics.htm.

17. InterNACHI. "Sales, Customer Service and Communication for Inspectors." Free, online training course for property inspectors provided by InterNACHI. A required course for all InterNACHI-certified home inspectors: http://www.nachi.org/customer-service-communication.htm.

18. U.S. Department of Energy (DOE). Buildings Energy Data Book. Table 9.1.2. http://buildingsdatabook.eren.doe.gov/TableView.aspx?table=9.1.2.

19. DOE, Table, op. cit.

20. DOE, Table, op. cit.

21. McKinsey & Company. McKinsey Global Energy and Materials. Unlocking Energy Efficiency in the U.S. Economy. July 2009.

22. Burrows, op. cit.

23. InterNACHI. Number of inspections performed, Vision and Mission Statement: http://www.nachi.org/vision-mission-statement.htm.

24. Remer, Lorriane. NASA, Earth Observatory, Global Temperatures 2000 to 2009. http://earthobservatory.nasa.gov/Features/WorldOfChange/decadaltemp.php

25. Lee, David. DOE's Building Technologies Program Residential Supervisor. "3-7℉ increase by 2100". DOE, Energy Efficiency: DOE Priorities, ACCA Green Conference, October 2010.

26. National Aeronautics and Space Administration (NASA). Global Climate Change, Causes.

27. U.S. Environmental Protection Agency (EPA). Climate Change Indicators in the United States. p. 58.

28. U.S. Energy Information Administration. Pie chart, Annual Energy Review 2009, and Monthly Energy Review (June 2011), preliminary 2010 data.

29. Crawley, Drury. Commercial Building Research Team Lead, Building Technologies Program, Office of Energy Efficiency and Renewable Energy, U.S. Department Of Energy. Testimony: The Building Technologies Program.

30. Goldstein, Benjamin. Rebuilding America, A National Policy Framework for Investment in Energy Efficiency Retrofits. August 2009.

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"Kitchen Table" Strategy: Home Inspectors Driving Demand for Home Energy Upgrades

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