I originally posted this under a different title in Business, but thought I might get more responses here. BillHartmann already listed all the sources for rebates (thank you) so I don’t need that part.
ORIGINAL POST: I recently insulated and weatherized my house and thankfully, I’m now seeing my gas bills reduced by about half. This got me thinking about starting a small business that focused on home efficiency and I’d like to get your feedback on some points:
Energy prices will continue to increase as supply decreases. Renewable energy sources are still being perfected and remain expensive. It’s been said that efficiency is our greatest untapped energy supply.
I live in an area loaded with old Victorian mansions left over from the Pennsylvania oil boom. There are lots of big, old houses that I’m sure are just energy pigs.
Does anyone know what the current tax incentives/rebates are for people doing efficiency remodels or if the next administration will be offering anything?
I’m surprised that I couldn’t find anyone listed in my Yellow Pages. I think there would be a great demand if you could show people how much money you could save them (especially if there were tax incentives) and also make them think they’re doing something to help the environment, but I’d like to hear from you guys. Thanks.
Replies
I've been having the same thoughts lately as I've been tightening up our old place. A lot of what I've read about energy improvements stress that the first place to start is with sealing up drafts, weatherstripping, and insulation. These will bring the fastest payback vs. spending thousands on new heating systems or converting from oil to gas etc.
I have the feeling that a lot of these easier improvements have already been done back in the 70's and early 80's . Yet here I am still working to seal up the drafts in our 1778 house. I recently used at least a dozen cans of spray foam to fill gaps between the foundation and sill beam in various places.
The Jan.'09 FH issue has a good article on energy audits.
might be a market in some areas but what filthy pain in the butt work!! much of the
areas that would benefit are the attics which are often inaccessable, filthy, dark, etc.
Ever gotten into old mineral wool insulation? nasty stuff!
Me, personally am in the building bussiness because I like most of the work, most
work involving energy upgrades just does'nt sound like any fun, sorry to rain on your
parade.
Nasty work indeed! My adventure into my own attic was part horror movie, part archeological dig, and thanks to my 6'3" 270# frame - part comedy. The blower I rented kept hollowing out a cavity in the cellulose so you constantly had to run outside and tamp it down. The only good thing is that there was no previous insulation installed. I guess any old insulation would have to be dealt with before new stuff is added. This might lead to exposure to mold & asbestos.But I really do see a need for this type of service. How expensive will natural gas have to get before nasty work like this practically becomes mandatory? I look at the economy, the destruction of the middle class, the rich getting bailed-out, the poor being exploited, peak oil, the environment, and this seems like a way to really make a difference. The question is, can you also make a living?
Your local utilities (power and gas) may be way ahead of you on this. Many of them do energy audits for free - or at a nominal charge - and give you a list of things to reduce your consumption.
Their websites should also have information about rebates, incentives, etc available to you.
>>Many of them do energy audits for free Free to the consumer but they pay some one to do them. It is very good money too.Where there's a will, there are 500 relatives
I am in favor of energy efficient upgrades and tight home construction, but you must be extremely careful when tightening an older home. Check all equipment and appliances for clean operation and proper exhaust drafting before any insulation or airsealing work. You could end up killing someone by trapping carbon moxide gas that previousl escaped through the leaky envelope. Special training is needed to operate this kind of business, but it can be very rewarding.
Bob Woodhead
A good friend of mine recently told me a story about another old friend of his, someone I have not met. they were in the military together years ago and recently caught up with each other.
this person, i forget his name, owns a mechanic shop in southern michigan. he has been in business for 15 years or so, is well established, owns the building etc. started as a small shop and then upgraded over time, the classic recipe for small business success.
now that the economy is in bad shape and no one is buying new cars his business is great, everybody is keeping the old ones and fixing them.
he has started to buy fixer upper homes in southern michigan. he recently got one for $25,000 that he had to put some money into, and had it appraised for $90,000 when he was done. i don't know how much he put into it, but being an established businessman with good credit was able to borrow against it and is now looking for another one.
while it may not yet be rock bottom for housing prices, if you are able to hold and rent for a positive cash flow it may still be time to buy. it occurs to me that a fixer remodeled with upgraded insulation and weatherization would have an advantage in a rental market.
I also think that remodeling plans specifically for a rental unit, that lend themselves to durability and repairability as well as energy efficiency makes them even better long term investments.
I would also think that if it could be shown to be a good long term investment (rehabbing cheap fixers into solid rental units) that you would have a flood of money coming in from investors and banks. At least thats what I keep hearing about all the investors waiting on the sidelines.
I think the main problem with your idea of selling improved energy efficiency is just the running of the numbers. If I save 50% of my gas bill for 5 months for the next 10 years what is that number?
Say my gas bill (heating) is $200 per month. 100 x 5 x 10 = $5,000. Or it could be looked at as $500 per year. How much would you charge to properly upgrade insulation and weatherization? How long before it pays for itself it at all? If I have to come up with all the money now for the improvements I think it might be better to just pay for the gas each month, depending on financial conditions. I would hate to lose my job and house right after I fixed it up.
You may be able to sell it to a homeowner, but can you sell it to a landlord? someone who is looking at as a business, and is concentrating on the numbers? If you can sell it to the landlords your business will be through the roof.
I think the key to making the numbers work are the right price for the fixer house to begin with, the right recipe for remodeling as a long term rental, and the combination of the house needing other work as well as insulation and weatherization, and combining the investment value. I don't think the energy efficiency is enough to stand alone if you are trying to sell to investors.
>>>"I think the main problem with your idea of selling improved energy efficiency is just the running of the numbers. If I save 50% of my gas bill for 5 months for the next 10 years what is that number?"I don't know if there's an equation for that or not. I'm going to check with my utility companies.Would you agree that chances of success increase as energy costs rise?
There are some insulation cost/return calculators on the internet. I don't know how accurate they arehttp://www.builditsolar.com/References/Calculators/InsulUpgrd/InsulExamples.htmhttp://chuck-wright.com/calculators/insulpb.html
"Ask not what the world needs. Ask what makes you come alive... then go do it. Because what the world needs is people who have come alive."
Howard Thurman
yes absolutely, but as the stock market goes, so goes the price of oil and to some degree energy. Gas is certainly a lot cheaper now than it was last summer.
I honestly don't think you need to check with your utility to run some quick guesstimate numbers. I gave an example in my previous post that you can compare to the price you will need to charge to make a profit in this business.
I don't think you will find too many buyers for a $5000 insulation upgrade if you can only save them $500 a year. Like I sad before it would help to do this work when other work is necessary, lowering the cost of the insulation upgrade.
I like the ideas though, and this is a great forum for spitballing. keep em coming!
I posted this over at an energy website and someone thought that you'd need a degree in civil engineering to pursue this line of work! That sounded a bit excessive. Is there specific training/certification for something like this?
I also found out that the federal tax credit is only $500 and now applies to 2009 only (I bought all my stuff last year). Also, my local gas company doesn't offer any type of rebate. Bastards.
Ive been looking into this as well.
You dont need, because I dont think states/counties/cities have, a certification or anything like that to do this as a business. There are different organizations that will certify you which obviously makes you look more impressive than the next guy.
This one,http://www.aeecenter.org, you need a four year degree to become a "certified energy auditor"
Resnet.us is a pretty interesting site that has rater certifications
eere.energy.gov has alot of great info and links. Being the US department of energy I would hope that it would.
There is a guy who does this as part of his business, in our area. He claims a 5 year payback, or he will refund part of your money.
a-aexteriors.com is his website. (hmmmm.......that didn't create a link) It is not a dial up friendly website.
I don't know how well he does with it, as I have met him numerous times but his background is in sales, not construction. The building in the website picture has had a "for sale" sign on it for a few months, though I still think he is in business.
A few years back he told me he was the third largest air sealer in the state without even trying to be.
Bowz
real top of the head responses
name notinuse $ 5000 expense to save $ 500 / yr - many nuances to that but probably your most viable selling point - does it sway you?
save your own info / investment / savings - they are telling for clients
we hear of wunderkind savings offered from everything but hear / see few empirical results by objective regulators or the like
observations of my many yrs building experience
cost of electrical 35% more than i think
cost of plumbing 40% more than i think
cost of framing close to what I think
cost of painting 20% more than i think
cost of sheetrock 15% more than i thinkl
cost of me 35% more than I think
cost of insulation 40% less than I would thinkI wouldn't want to compete
Edited 1/15/2009 11:51 am ET by johnharkins
foam as an insulator did not enter my consideration in previous post pricing
I dont think I would look at an energy auditing career as a way to get more insulation jobs.
Informing the client of ways they can save money with the new and continuously improving technology would be one step. Informing them on how their daily habits, good or bad, affect their monthly bill amount would be another.
There are guys doing home inspections, and doing very well, who dont know much more than the average residential GC. The big thing with them is mortgage and insurance co.'s created a huge martket for guys like these by requiring a home inspection before apers were signed.
Now if we can somehow get an energy audit, or a green rating(or something like that), required we could be in some real business.
A businessman here is making a go of it and currently expanding. I saw him on tv and he just bought a local testing, insulating, HVAC, mold abatement company.
http://www.sustainablespaces.com/
They are hiring right now but the work is tough and the pay is worse.
bpi is the current leader energy audit training many states require bpi training to take advantage of incentives
Just heard this on NPR. All these "signs" telling me to just grow a pair and do it. Or maybe just grow a pair.
http://www.npr.org/templates/story/story.php?storyId=101059253
All Things Considered, February 23, 2009 · People in the business of weatherizing homes are expecting to profit from the new economic stimulus plan. The federal aid package sets aside $5 billion worth of spending for making homes and buildings more energy-efficient.
That's good news for people like Malcolm Woolf, who runs the Maryland Energy Administration. It's a small office, just fourteen people, and they've started a new program to train people to weatherize homes — installing things like weather stripping around doors, insulating attics and basements, or making heating and cooling systems more efficient.
"We are training folks every week to become home energy retrofit professionals," says Woolf. "Construction workers can be easily retooled to be air duct or insulation installers and meet our current needs."
Maryland has also spent hundreds of thousands of dollars over the past ten months helping low- and moderate-income homeowners pay for retrofitting. The energy department will pay up to $5,000 for qualified families to weatherize.
Woolf expects the federal stimulus package to boost his budget tenfold. That means new work for Bob Logston, whose company Home Energy Loss Professionals does a lot of the Maryland program's retrofit work.
"Back in the day, real estate people didn't want people to know that their homes weren't energy efficient," says Logston. "Now they want people to be more energy efficient."
New homeowner Princess Moorman is one of about fifty Marylanders who has qualified for retrofitting for her north Baltimore three-storey house. It was built in the 1920s and although it's been renovated, it's drafty. Moorman says her January heating bill was $500.
Logston and his three-man crew recently spent a day going over Moorman's house. By running a big exhaust fan that pulls air out of the house, they create a low-pressure zone inside that draws cold outside air into the house through cracks and holes. They locate where it's coming in by using an infrared scanner that spots cold areas. The culprit in Moorman's house is the ductwork that carries air up from the basement heating system. Fifty-degree basement air is leaking up around the ductwork and cooling the house.
Logston's team spent a day painting mastic on the ducts that will help them retain heat and wrapping the water heater and pipes with insulation.
"It's not high-tech," says technician Mike Shifflett, "but it makes a big difference." He says it might take six months to train someone from the building trades to do energy audits and retrofits.
The work at Princess Moorman's Baltimore home will run about $4,500. The Maryland Energy Administration says the average retrofit they pay for saves about $400 to $500 a year on home energy costs. That means about a ten-year period to recoup the up-front expense.
Despite the considerable expense, says department analyst Eli Jacobsen, "We have about 150 people in the program (out of 200) without any subsidy" — they pay the cost themselves.
Jacobson says about half do it for comfort, a quarter because they want to cut energy costs, and another quarter say they want to help the environment. Energy Administration head Malcolm Woolf says the federal stimulus package will boost his budget for this program tenfold.
Do you know where we can find the info that says what the qualifications are for the stimulus money. Does princess moorman pay the $4500 or does the company get a check from the govnt? If the govnt is paying directly I'm right behind you at the blower door store.I figure 10k will get you everything you need to run a professional home energy auditing company. We could make that back in couple months.The problem I ran into when doing a little market research was that there just wasn't the demand to support the business. If the govnt is paying then it's up to us to get the word out.Get in first before the money runs out.
>>Do you know where we can find the info that says what the qualifications are for the stimulus money.
-I'm working on this and will let you know. Are you in PA? Let's hope it's as easy as the bank bailout: 2 page application>>>The problem I ran into when doing a little market research was that there just wasn't the demand to support the business.
-I think rising energy costs will solve this.>>>Get in first before the money runs out.
-I agree, but I also see this as a long term need.