Our Business Is Changing Very Rapidly!

This article was written by Halco owner, Hal Smith, and published in ACCA's newsletter, IE3. Please click here to view the original publication. 

Our business in N.Y. State is very involved in a program called HeatSmart. They have recently launched campaigns across the state. It is a community awareness program focusing on four things:

1. Envelope Improvements
2. Cold Climate Air Source Heat Pumps
3. Geothermal Ground Source Heat Pumps
4. Air Source Heat Pump Water Heaters

The end goal is to use less fossil fuels for a substantial reduction in our current carbon footprint. I find myself spending much of my time going to community awareness meetings, press conferences and writing proposals. Our Business is Changing.

I remember the days when it was good enough to just be a great HVAC/Installation/Service provider. We still need to be that, but so much more! I remember the days when my entire marketing department was me, simply putting in a larger Yellow Page ad than the year prior. Our Business is Changing.

Another buzz phrase around our state is P.4.P. (Pay for Performance). All the rules and details have not been released yet, but my understanding is that sometime in the very near future, things like utility rebates, will be a thing of the past. What we are to expect is a world where we get paid for the measured and verified carbon footprint avoidance that our work creates. Individual projects will get rolled up into a large group and “sold” to the market under a portfolio of jobs by a completely new player in our industry…an aggregator! This is already underway in California and coming soon to a utility near you. So I go from being a Plumbing/HVAC contractor to becoming a Home Performance contractor to now considering becoming an aggregator of a portfolio of clean energy jobs! Wow! Our Business is Changing.

For a long time, I have been a proponent of actual measured energy savings. I feel strongly that we need an actual unit of measure that is nationally accepted. I have never been a fan of modeling a home and then “Truing it up”. It is all just a bunch of “Hocus-Pocus” educated guessing. And then there are the asset-based scores of homes, which do no more than guestimate energy use based on average homes. Although all these things can be helpful in getting you pointed in the right direction, I feel we should be measuring and not guessing.

To do this a lot of things need to change. We need more data and from the energy use side of things! Smart meters are on their way! This will be a big help. We have been recently introduced to Green Button Connect (GBC), which is basically a platform for smart meter customers to share their data with 3rd party vendors…like us, the contractors. Finally, we will be able to get actual real time gas and electric meter reads! Why do I care? Because that’s how I am going to be paid through the Pay for Performance program. Our Business is Changing.

I would like to see a universal form of measurement that is then weather normalized. Maybe kilowatts per cubic foot? We know when a vehicle gets less than 10 miles per gallon, that it is terrible! And we know when a vehicle gets 40+ miles per gallon that it is good.

We do not know when a particularly sized home is performing poorly or very well because there is not currently, a standardized unit of measure. Yes, we have the Home Energy Score from DOE; yet another asset assessment that estimates energy usage and then compares it to the actual. Unbelievably, to create a HES score it only looks at the heating and cooling loads. What about baseline loads and how people “use” their homes? There needs to be a measure of relative energy usage in a home that can be compared to its neighbors, with all the energy usage accounted for! Our Business is Changing!

This afternoon, I will be on a webinar from a new market study software that is going to tell me about customers who want to buy a new geothermal heating/cooling system based on their buying trends. I guess based on whether you buy Charmin or Scott toilet tissue, this software will understand how you think. I can’t wait to see this! Our Business is Changing!

We can choose to roll with the changes and try to figure out how to remain in control of running a profitable business or push back and hope for the best. We choose to anticipate the future and embrace it, one way or another, our business is changing very rapidly.