Sign of things to come?

[Michael R. Boyett]

Starting on June 1, 2009, most Austin, Texas homeowners will be required to have an energy audit completed before selling their home...Read the ordinance.

Austin Energy, the city owned electric supply, will oversee and administer the ordinance. The admin details are still being finalized but, in general, a HERS/Resnet or BPI certification will be required to perform these energy audits. More information can be found at one of the training providers website here.

Austin likes to think of itself as being on the foreskin of technology and the leading edge of environmental causes. This compromise ordinance is the result of a bitter 18 month fight between the city leaders and the local RE board who vehemently opposed any restrictions or adding of costs to sell private property.

Central Texas Inspectors interested in getting certified to perform these City required energy audits can see the training provider website link above for starts.

[Michael R. Boyett]

Granted, this is a Texas thing and, more specifically an Austin thing, but I'm surprised no one else has a comment about these mandatory audits.

As it looks right now the City is going to define a subset of BPI/RESNet audits and require duct blower, insulation, solar screen and duct sizing reports. I know, don't ask me...why not a door blower test and what's with the duct sizing? Lot's to be defined and clarified in the next few days. Training of local folks to do the audits started this week and I am probably going to schedule the training for myself and a business partner the 1st week of March.

[Linda J. Foster]

Mike,
I thought this was still in the early thinking stage, and not fully thought through, or scheduled to start up soon ? ?
Linda

[Michael R. Boyett]

Linda, it's been in the works for about 18 months now. The ordinance was passed in November and goes into effect June 1 as shown on the past page of the ordinance. It's been fully thought thru, now does everyone buy into it? Not by a long shot, but it's a done deal for the near foreseeable future. Who's next? Helotes, Bandera, Concan, Utopia?

[Jack R. Robnett]

Are sellers required to make repairs, or just say ok here is the audit?

Jack

[Michael R. Boyett]

At this point, just provide the audit. The City's position is that they are expecting/predicting 25% voluntary modifications to be made in year one of the ordinance going to 75% by year three or four. If that voluntary participation doesn't occur then the City says they will make it mandatory. In all cases though, it's a negotiation topic between the Buyer and Seller.

[Kevin R. Weiss]

Sounds interesting Michael. I am going to do the training soon anyway to compliment my IR energy stuff. May be a hassle for sellers, but I think it is a good thing for energy usage and a nice potential market for those of us who are prepared.

[George E. Russell]

So I've looked all over and can't see anywhere what one would be able to charge for this service. Anyone have any clues?
G

[John Cahill]

Here is what will happen.

Home owners will get caught by surprise. A few powerful ones will force elected officials to retract the law. Plain and simple. Rich home owners will kick City of Austin butt.

Example. Dallas passed a lawn irrigation check valve law and made it retroactive. Worked for a few months before they wrote up the expensive homes of rich and famous. The law was immediately put on hold and retracted a few months later.

I would not waste my time on the class.

[John McKenna]

Originally Posted by jcahill

Here is what will happen.

Home owners will get caught by surprise. A few powerful ones will force elected officials to retract the law. Plain and simple. Rich home owners will kick City of Austin butt.

Example. Dallas passed a lawn irrigation check valve law and made it retroactive. Worked for a few months before they wrote up the expensive homes of rich and famous. The law was immediately put on hold and retracted a few months later.

I would not waste my time on the class.

Your post makes sense, but what about the pressure that will come
from the feds on the states to reduce energy use? Do you see that
as a factor, John?

[John Cahill]

The Feds already contribute to energy reduction with tax credits and subsidies. The prevailing party would loose votes with a mandate. The current administration has bigger problems right now. People cannot afford the light bill in an energy efficient home.

[Michael R. Boyett]

The new stimulus package "roughly triples the money for a range of energy programs, including weatherizing homes and building transmission lines. It provides $6.3B in grants to states for energy projects, $5B for weatherization,......." At least for the near term, there will be federal monies available for states/cities to throw at reducing energy consumption. I believe there are enough loopholes and variances available in the Austin plan that any resistance to the mandate will not be residential but rather the commercial sector. The ordinance also calls for all multi-family (i.e. apartment complexes) to be audited by 2011. There's where the big bucks and resistance will occur.

[Douglas Cossar]

Originally Posted by grussell

So I've looked all over and can't see anywhere what one would be able to charge for this service. Anyone have any clues?
G

George:
The Canadian Federal Gov. has a program where home owners get grants to update furnaces, A/C, windows etc to Energy Star quality.;

Energy audits are done, reports, with recommended upgrades are provided to the home owner. They have 18 months to do any, or all of the upgrades, and a second audit is done to confirm the upgrades.

The Feds provide specific grants for specific upgrades and our Province (Ontario) matches the Federal grant and provides a $150.00 grant to suplement the cost of the first audit.

As to fees: We charge $315.00 for the first audit and $150.00 for the second, some charge more and some charge less.

The Ontario Gov. has just introduced legislation requiring the Audit before any home is listed for sale, I guess like you mentioned is happenening in TX, but it is still in the legislature. Not law yet, and no time frame has been established.

Cheers

[George E. Russell]

Well after I read where HVAC contractors may do the inspections AND offer upgrades and repairs I've decided to wait and see what happens. If I offered such repairs on homes I inspect it would be a conflict of interest and I could lose my license. I'm not seeing why HVAC contractors can offer this and it NOT be a conflict of interest. I'll not compete with them.

[Michael R. Boyett]

E-mail I sent to several other local inspectors today:

As several of you know, I have verbally asked Tim with Austin Energy (AE) to confirm the number of homes that AE predicts will fall under the new Austin Energy Audit ordinance. In Tim’s presentation last week, and in other publications, that number was 4,000 homes total (i.e. not ‘per year’). If that number is correct then the available residential market is much, much smaller than many of us originally estimated. I asked him at the meeting about that number, I e-mailed him about it and I left a voice mail about it but he has not yet responded. That’s somewhat understandable as I know he is very busy trying to manage this project and get it rolled out for Austin Energy.

I did stop by the Austin Board of Realtors (ABOR) office today and talked to Emily in their Government Affairs Department and who has been working with Tim. She re-affirmed the 4,000 number and also said she too thought that was an absolute number and not a ‘per year’ number. Her understanding was that the number of older homes that have already participated in existing AE energy reduction, weatherization, rebate and other qualifying programs was fairly high and really brought the number of potentially affected homes down dramatically.

If that 4,000 number holds up, like it has so far, then the average auditor ( AE estimates 175 qualified auditors once the pgm is rolled out ) will perform ~1.9 energy audits per month (assuming all 4,000 homes are audited over a year's time) at around $250/audit resulting in $475/mo estimated revenue. With a ~$4,000 capital investment then the payback would be in the neighborhood of 8-9 months on the average. Personally, I also question the 175 number; I suspect it may be much lower than that which would improve the payback but there is no real way to know that number at this time.

Also, my understanding on multi-family projects (i.e. apartments) is that only one of each available floorplan will be required to be audited thereby greatly reducing the work and cost of the audit.

HVAC companies already doing similar energy work for AE will be offering these audits for free or at reduced rates in anticipation and enticement of getting the repair work where their money will be recouped.

Based on these assumptions and numbers then it does not seem to be a viable side business, for me at least. Bottom line is that the market is likely smaller than I anticipated and the number of auditors may be more therefore the potential revenue is not as lucrative as I once expected. Please arrive at your own conclusions and share your thoughts if so inclined.