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Will the Independent Home Energy Auditor Become Extinct?

 

home energy auditor testing for duct leakage

Independent home energy auditors have always been a rare breed. In the past decade, though, an army of them has gone through RESNET or BPI training programs and hit the streets in search of homes to analyze. At first, these energy auditors were mainly of the RESNET variety—certified home energy (or HERS) raters—because the ENERGY STAR new homes program really took off. Then, with all the ARRA weatherization money that started flowing in 2009, the BPI building analyst certification became the hot one.

Home energy auditors basically fall into one of two camps: those who work for small, independent companies, often only one person, and those who work for large companies. A number of factors are making it difficult for the small, independent companies to make a go of it in this business.

  • With new home construction way, way down, fewer home builders are hiring home energy raters to qualify their homes for the ENERGY STAR label.
  • The ENERGY STAR new homes program is in transition to Version 3 right now, and some builders who are still building are dropping out of the program. (RESNET is trying to keep HERS raters going by getting builders to market the HERS Index.)
  • The cost of training to become a home energy auditor has risen a lot in the past decade. When I took the HERS rater class in 2003, it cost me $625. Now, most trainers charge $1200 to $1500 for a week long training (both HERS and BPI) because of their increased costs and the stiffer requirements they have to meet.
  • The cost of ongoing certification and quality assurance requirements keeps rising.
  • BPI is adopting new new testing standards, and the costs to trainers will rise significantly. There's been a lot of really good discussion about this lately in the RESNET/BPI group on LinkedIn.
  • A few big companies have gotten most of the grants and contracts from the ARRA money and have used that to expand their positions in the market. I know one energy auditor in Ohio who couldn't make it on his own and had to go to work for one such company because he couldn't compete against the $50 energy audits they were offering homeowners.
  • The ARRA money is going away, and the economy is still weak.

Can a small, independent home energy auditor make it? I think the answer is yes, but it will be more difficult. It also depends on who else is in their market, as my friend in Ohio found out. Mostly, though, home energy auditors need to combine their energy audits with other services or products to be profitable. Many are also contractors (insulation, spray foam, crawl space encapsulation, full home performance...).

So, there are a lot of interesting things happening in the world of home energy auditing, which you'd expect for any new industry. I think a lot of things are going to change in the next ten years, both on the training side and the energy audit side, and the industry will look very different in 2022 than it does now. (I'll write more about the training changes I see coming in future articles.)

As I see it, there's always room for smart, resourceful people, and because the industry is so new, there's plenty of opportunity to be on the cutting edge of the changes.

Comments

I am surprised there have been no comments re EcoBrokers or Green certified Realtors. I am in the process of obtaining these certifications and I am finding many of my clients, both buyers and sellers anxious to have the property energy audited. ATTN Energy Auditors, find a Green Broker or EcoBroker and partner up. We need one another.
Posted @ Friday, January 06, 2012 7:45 AM by glenn
Glenn: That's a great point. I've been a big promoter of the Energy Efficient Mortgage, which requires audits as well, and anytime you can package an audit with the sale and financing of a home, the cost objection should go away. 
Posted @ Friday, January 06, 2012 7:52 AM by Allison Bailes
There are literally tens of millions of homes that require attention, yet many Auditors look at each one as its own science project. Only a very a very few will survive writing books, Blogs, hosting PBS TV shows, going to HP science camp holing hands and singing Kum Ba Yah and spending 6-8 hours per house . The vast majority will have to learn retailing, join up with companies that know retailing, or perish.  
 
Houses built by the same builder in the same development have the same issues and doing the Science Project Performance Art routine wastes time, money, and delivers nothing in the way of additional information about the house. Audits can now be done as accurately in real time during phone interviews with quick validations on site as the “scientist” spending 4-5 hours with a dog and pony show and another 2 hours gaming bad software. That model is unsustainable without the unfunded subsidies from other peoples money it has lived on. In addition we are not even considering all the lies that have been told to homeowners regarding savings estimates that have never materialized. Evolve or Die.  
 
pj
Posted @ Friday, January 06, 2012 8:48 AM by pj
Good article.  
 
 
 
The savvy consumer will want unbiased recommendations from a professional who has no pre-determined financial interest in the outcome, when he thinks it through and considers his choices.  
 
 
 
Sometimes the difference between a professional and unbiased energy audit and a sales presentation for a particular product or service rests totally upon the independence of the auditor from any pre-determined "need" for the item he happens to carry in his truck. 
 
 
 
Marketing is the key and, for the time being anyway, the advantage presently goes to the vendor using the energy audit as his "foot in the door". 
 
 
 
An educated consumer, IMO, will prefer an independent auditor to provide him with a roadmap to use as he collects competitive bids from a variety of contractors to perform the recommended upgrades. 
 
 
 
As the industry progresses and the consumers become more informed I think we will see this happen to a greater extent than it presently is. 
 
 
 
Posted @ Friday, January 06, 2012 8:49 AM by Jim Bushart
I get amazed how much air someone who has just finished a 1 week course becomes a professional.  
Their one ace in their pocket is they are a third party verifier with experience with house sciences. Their premise is 3rd party is the only way you can get an honest opinion. Baloney. Integrity comes from within a person ...not a silly 3 party verifications process.  
 
Since 2002 I been listening to how this industry Raters say how much the HVAC contractor dont know what S and J manual are and they dont know how to size ductwork. Etc, etc, etc.
Posted @ Friday, January 06, 2012 9:42 AM by chuck h
I am an independent auditor and I haven't quit my day job yet. Not enough demand to fully support myself doing audits, but I enjoy the work, and hopefully, am making a difference. From feedback I have received, I know I have made a big difference in the utility bills of some of my customers. 
 
 
 
There is no such thing as a $50 energy audit. I know utilities and "home performance contractors" offer such underpriced audits. However, these audits are either subsidized by the utility (read: ratepayer's money) or the actual cost is recouped by inflating remedial work (read: homeowner's money). IMHO, both practices are inherently deceitful. This is not how I would like to represent myself to my customer. There is no free lunch, and homeowners should be aware of that. 
 
 
 
Glenn: thanks for the pointer. I was not aware that the real estate business was (finally) moving in this direction. 
 
 
 
Independent auditors are an important tool for homeowners. Jim did a great job of covering the "conflict of interest" aspect of of this discussion. Unscrupulous contractors will give us all a black eye. 
 
 
 
 
 
pj: My "Science Experiment" takes about two hours and provides the homeowner lots of useful info. This is not a HERS rating, but that's overkill for most homeowner's needs.  
 
 
 
I used to disparagingly refer to some quickie-audits as "drive-by audits" but your suggestion that we "just phone it in" made me laugh. You have just lowered the bar considerably! Would you be happy if your doctor diagnosed you over the phone? 
 
 
 
BTW, RESNET has special guidelines for tract houses, so the auditor doesn't actually have to conduct a "science experiment" on each and every one. 
 
 
 
Sorry you have such a jaundiced view of the industry, PJ. Perhaps you should persue other work. Maybe assembly-line work would suite you? (Foghorn Leghorn voice I say, that's a joke, son! 
 
 
 
 
 
Posted @ Friday, January 06, 2012 12:09 PM by Henry Borysewicz
Good Grief I hope not! Doc, how dare you! We are fortunate here with multiple utilities either providing rebates or inexpensive financing to homeowners to reduce their load. I conduct the assessment for "Before & After" blower door and duct tests. I have contractors asking me to conduct audits for them, they are my customer, and I send the contractors "requests for bids" when I am directly assisting the homeowner. My clients want to have a complete plan of action before talking to contractors. I do not have a dog in the hunt, but some of my contractors rebate some or all of my fees to the homeowner. I am not paid from them for their sales. But I make them do a good job for my(our) client.  
 
I bet that guy is amazed by all the air from new auditors. They (we) now know something that most people don't know, a i r h o l e s ! we get to share the info and help homeowners, the environment, and economy as well, and I mean the really local economy. I got to pay college bills.  
 
There is room for all types of business models in this industry. There are millions of homes who need our help.  
 
Posted @ Friday, January 06, 2012 1:08 PM by Bruce Looney
Real Estate Agents may understand the appeal of home energy audits. But they aren't the decision-makers. Real Estate Brokers fear home performance audits; they don't want us anywhere near their buyers or sellers for at least 3 reasons. They don't want us to uncover anything that may lead to a low-ball offer. Doesn't matter if they're the listing or selling agent. Brokers don't want yet another technology they must understand and explain. Nor do they want to uncover something they and their agents must disclose every time the property in question is discussed. Besides being a thermographer I have managed real estate, custom-home builder, and escrow offices. 
 
As free-lance pro, I do a combination of B2B and B2C work. Most of the consumers who hire me are engineers who are intrigued by IR. The businesses are mostly remodeling or energy rating companies who can't afford to buy, get trained on, and get good at using IR imagers.
Posted @ Friday, January 06, 2012 1:10 PM by Lorna Fear
By the way, I'm both a BPI Building Analyst and BPI Envelope Professional.
Posted @ Friday, January 06, 2012 1:12 PM by Lorna Fear
I agree with Henry. I do energy efficiency jobs as a hobby because it's a real interest of mine. Here in Chicago there isnt much demand for it. Lets face it most people in this country just don't have the money to spend on anything for there homes except pressing repairs.  
 
 
 
The people i know who are interested in it all have high paying jobs with some disposible income. 
 
 
 
I don't see any big demand unless the government mandates it for everyone.
Posted @ Friday, January 06, 2012 2:41 PM by Chris in chicago
Of course realators do not want quality inspections because I doubt whether most homes would pass the electrical, plumbing, enclosure and HVAC portions without requiring major work. We are promoting shoddy workmanship by never having these items looked at. Legislation is the only way houses will be properly inspected and then builders/remodelers will start to put some effort into making them right.
Posted @ Friday, January 06, 2012 3:49 PM by Colin Genge
As an independent I would say yes. The industry is just cutting their teeth. I think it is way too early to say the independent can’t survive. I am not big on the push from government. I think that is what brings the bigger companies to the table. I believe in this business model. I think it can survive without the mandates. While I cannot claim a roaring success I will take that as a challenge to do a better job of marketing.
Posted @ Friday, January 06, 2012 5:24 PM by Glen Gallo
Quality energy audits do not lend themselves to the "cookie cutter" method/assumptions. I have been to developments where similarly constructed houses have been modified over the years and now have unique issues. Been to some new developments too where some subs are on a learning curve (e.g., HVAC duct leakage) or are being swapped in/out every week. 
 
That being said, it will not take too long for the poor economy, low-ball, loss-leader "auditor"/contractors to drive out the exclusive auditor competition. 
Weatherization programs are a joke. Builders building new Energy Star homes will go away due to lack of interest and high prices (try finding a new home builder that will even bring up the subjece of Energy Star with a customer). I think the best thing would be for the Federal government to establish national building codes (Energy Star II IMO), and fund the demolition or rebuilding of all residences that have passed their design lifetime (much better stimulus IMO). Building/remodelling/HVAC/electrical/plumbing/insulation/energy auditing trades all win; homeowners get much better homes; the nation reduces our dependence on energy companies.
Posted @ Friday, January 06, 2012 5:51 PM by DE
@Henry Borysewicz, As the guy who now performs the $50 audits. Yes they are heavily subsidized by the utility, but the homeowner is only paying $50 for a full BPI home energy audit. The home energy audit for most of my customers is even better than the one I was able to provide on my own because of the nice reporting software and equipment supplied by my company including free installation of programmable thermostats and low flow shower heads. So unless I want to drive 2 plus hours to get out of the utilities service territory, you can't compete. 
 
I do hope to go on my own again, but it will be more than just home energy audits, because I feel you have to be diversified and have to have other means of income.
Posted @ Friday, January 06, 2012 7:41 PM by Joshua Lloyd
I am an independent auditor and choose to remain that way. However, I've leveraged what I've learned into the rest of my service offerings.  
I will never be anyone's employee again, but I'm more than willing to team up with contractors. I also have the ability to provide unbiased opinions. 
What I enjoy the most is handling the cases where people who only know a narrow topic well have given up. What I know may only be an inch deep, but it's miles wide. I need to work with folks who what they know is an inch wide and mile deep! It works great as a project manager and engineer.
Posted @ Friday, January 06, 2012 8:22 PM by Sam Young
@Joshua Lloyd, Hey Joshua, I'm doing those $50 audits too! I am contracted by two different utilities to do their audits. 
 
Of course the utilities pay me a lot more than $50. And although they may only charge the homeowner $50, where do you think the rest of the money comes from? The ratepayers, of course. Where else do utilities get their money? 
 
Drive 2 hours to get out of their territory? Not me. In fact, if someone tries to hire me independently, I ask who their utility is, so I might steer them to a subsidized audit instead. The real losers are homeowners who don't take advantage of the subsidized audits - after all, they are paying for them, regardless! :-) 
 
@Sam Young, Great idea! I think you have the best answer.
Posted @ Friday, January 06, 2012 8:52 PM by Henry Borysewicz
@Henry, our utility doesn't hire independents to perform the audits, it's all done by one large company. Before working for them, contracting was not an option and still is not. And I don't think $0.01 per 100ccf if a huge price to pay for the rate payer.
Posted @ Friday, January 06, 2012 9:20 PM by Joshua Lloyd
Just a quick correction to your blog - where you say " BPI is about to go to a completely new model for their training programs". BPI is a testing organization and doesn't oversee the training in any way. It is the testing process that everyone has been talking about recently. 
 
 
 
 
Posted @ Saturday, January 07, 2012 6:14 AM by Amanda Evans
It is good to see the range of comments and passion! I agree that Realtors and Appraisers are the key to moving this forward in a non-subsidized way. There is no reason a high performing home should only be valued by the s.f. and location only. This is a mistake by the lenders to not realize a better performing asset and a missed opportunity for the realtors to not put their clients in a comfortable and well performing home. Energy Efficient Mortgages are a HUGE opportunity that is being overlooked!! HUGE!!! 
 
I do agree there is a lot of hot air out there, but the one thing I believe will survive is the auditor/home performance consultant that continues to educate themselves and their teams to provide the total package for builders, architects and homeowners like Sam Young has professed. I don't think they will survive if they only know and fund their operations from ARRA funds, running blower doors and not helping build better homes openly. The good thing is the awareness is growing. 
 
I wish, and hope, that more Raters will not shy away from ES Version 3 due to the new HVAC requirements. Even though there are a lot of Raters that come out of the 'week' berating HVAC companies for their possible ineptness, there are a lot of Raters that know nothing about how to solve the problems. The HVAC industry is our best and most important ally, but they also have to be open to change. It is time for Raters to understand it is not about the air leaks only, but it is about the system-as-a-whole that we all have been focused and trained on. Too many want to run the blower door and profess savings....that is just not so. There are a lot of leaky homes, but there are more opportunities than this and blower doors will not solve the problems we face from overall performance! 
 
Egos must go away. Openness must be part of our everyday. Ongoing education should be consistent (reading, studying, thinking, collaborating, etc...) Together with the lenders, realtors, appraisers, HVAC contractors, insulators, builders, framers, landscapers, etc...we can survive and will if the desire to be open and honest is there. It is about the passion and opportunity that exists, it is not about a magnanimous person and their tools!
Posted @ Saturday, January 07, 2012 8:15 AM by Jamie Kaye
Thanks for all the comments!  
 
Jim B.: You make some good points in the case for third party audits, but I guess I confused things when I used the word 'independent.' My intention here was to look at what's going on between the large national or regional companies (including utilities) and the small local auditing companies.  
 
Chuck H.: Yes, a one-week class isn't nearly enough to make someone knowledgeable and proficient in building science. As for HVAC contractors understanding proper design, a look through the articles I've written on that topic here in the EV blog will show you where I stand on that. 
 
Henry B.: Good points! (And I like your Foghorn Leghorn voice!) 
 
Bruce L.: Hey, I'm just asking the question. You're lucky that in Charleston the programs are subbing out work to you guys. In places like Ohio, where Josh is, he couldn't compete against $50 audits. 
 
Lorna F.: Yes, that's been my experience with real estate agents in general. There are exceptions, of course, and Glenn, who commented first here, seems to be one of them. 
 
Chris in Chicago: Another option to help is the Energy Efficient Mortgage, which can make the cost issue go away. If the SAVE act passes or we get the ability to tie financing of energy improvements to property assessments (Property Assessed Clean Energy, PACE). 
 
Colin G.: Legislation could definitely help, but it needs to be done intelligently, and that's the part I fear, given the state of government. 
 
Glen G.: I agree that mandates can be a problem. They can also be a big driver, as in Austin, TX, which requires all homes to have an energy audit when sold. 
 
DE: I have to agree that in many cases, older, poorly performing homes should just be demolished and replaced with something better. 
 
Josh L.: I was hoping you'd jump in and identify yourself as the Ohio energy auditor. Thanks! 
 
Sam Y.: Good points! 
 
Amanda E.: Thanks! I've revised that part. 
 
Posted @ Saturday, January 07, 2012 8:21 AM by Allison Bailes
Jamie: Great points! I like EEMs, too, and agree that the HVAC industry can and should be a great ally. 
 
Posted @ Saturday, January 07, 2012 8:35 AM by Allison Bailes
Great post! The demise of the independent energy auditor is a sore subject with me. 
 
I am a licensed professional engineer. I worked as a mechanical engineer for a decade before recently pursuing my interest in building performance. I performed about fifty home energy audits while working for an air sealing company and then for an HVAC company. 
 
Licensed engineers are prohibited from selling reports in situations where they stand to make additional profits from their recommendations--the classic "conflict of interest." But the rules are different in the home performance industry. Here in southwest Ohio, the local energy alliance will only subsidize $50 audits for companies who offer a "one stop shop" solution of performing energy audits plus quoting and then installing the recommended weatherization and HVAC upgrades. They are explicitly not interested in supporting independent auditors, because their focus is on subsidizing the improvements, not the testing. 
 
Consequently, a lot of independent auditors and smaller companies are scrambling to partner up with someone, anyone, who can fill the gaps. The result is a hodgepodge of partnerships that offer a "jack of all trades, master of none" level of service. Regarding the conflict of interest, I never tried to sell a homeowner a service that they didn't need. However, I did tend to filter out audit requests from homeowners who needed services that my employer couldn't provide. Otherwise, we had to subcontract that portion out, and we would lose money on the job. 
 
In my opinion, a better model would be to have energy auditors perform a similar role as building inspectors. They would perform the initial baseline testing and make recommendations, then step back and allow the weatherization and HVAC installers to focus on what they do best. The energy auditor would check in at the critical milestones--a blower door test after the building envelope has been improved, a duct blaster test after the HVAC system has been upgraded--rather than saving it all for the very end, when the contractors have been paid (or should have been paid) and are long gone. 
 
The "house-as-a-system" approach is excellent from a technical perspective, but not from a business perspective. If I'm getting paid $50 plus a modest subsidy to perform a 3-4 hour site visit (which doesn't include the driving time, reporting, and follow-up), then I'm not interested in also being a project manager. I like the idea of homeowners being able to select trusted contractors from a BPI database, but unfortunately, the database is very sparse at this point. 
Posted @ Saturday, January 07, 2012 9:09 AM by Karl Oberjohn
“I am an independent auditor and I haven't quit my day job yet. Not enough demand to fully support myself doing audits, 
 
Henry, it sounds like you are already in a different line of work. 
 
If you would like to lay some money down on the accuracy of your “science project” audit vs a customer interview and quick field validations, I would be happy to accept the challenge. Quite a bit has been written about the waste of time, money, and opportunity to effect the masses of your 6 hr Performance Art Audit. First you tell me about the need for the science project and then you tell me you can’t make a living doing it, then we get to here how bad all those HVAC guys are that are running profitable businesses. Hmmmm. 
 
Reading the comments relating to mandates, subsidies, rate payer money, other peoples money, etc, one might think HP guys are all communists. Does your business deserve handouts or should it stand on its own like others? 
Posted @ Saturday, January 07, 2012 10:06 AM by pj
Allison, 
 
Just before seeing this post, I finished reading an article in the latest Home Energy magazine about Energy Performance Score (EPS), an online auditing tool based on SIMPLE and being promoted by the Earth Advantage Institute (I had mentioned this to you on Twitter). 
 
If you're already certified as a BPI BA, you can become certified in EPS via an online course and a series of exams. The total cost of training/certification is $199 and the per-audit cost to use the online software is $45.  
 
Of course, this program is very much in start-up mode, and according to the author of the article, still has a way to go to mature. 
 
But I mention this here because its related to your post topic in the sense that it appears to significant lower both cost of entry and ongoing auditing costs (lowering costs is always a good thing), assuming, of course, that you're already BPI-BA certified. 
 
Here's a link to the article: http://www.homeenergy.org/show/article/id/1748/viewFull/ 
 
And a link to the EPS website: http://www.earthadvantage.org/programs/energy-efficiency/energy-performance-score/about-eps/ 
 
~ John
Posted @ Saturday, January 07, 2012 1:40 PM by John Poole
John, 
We're doing a pilot program in New Mexico using EPS software and the auditors involved all really like it - very quick and easy to use. The people at Earth Advantage have been very responsive and helpful.
Posted @ Saturday, January 07, 2012 2:13 PM by Amanda Evans
Hi Amanda, 
 
Thanks for the information about the New Mexico pilot. The article likewise mentions a large-scale program being conducted in Seattle. 
 
As long as quality of service isn't diminished, anything that reduces upfront & ongoing costs and time to complete a project can't be a bad thing. It'll be interesting to see where EPS goes! 
 
- John
Posted @ Saturday, January 07, 2012 4:01 PM by John Poole
From a lenders perspective and an Energy Efficient Mortgage Lender EPA preferred, I find it more that the HERS auditors that I have come in contact with are utilized are extremely talented in their field by default, but the sell/pitch to the client on utilizing or originating a EEIM is like extra weight of a traditional sale on the street with the auditor literally on my back with me carrying them. Its SALES101 and unfortunately in my market my auditors are in need of sales training and where to market their audits. It sure would make my job much easier, but I do not think it is a dying breed, just a silent voice that many don't get to hear.
Posted @ Saturday, January 07, 2012 4:58 PM by Bo aka BoKnowsMortgages.com
I am an independent auditor. My business model is third party auditing, and I accept no referral fees for recommending contractors. As I state on my site - Energy Audits Are Not A Side Line - They Are Our Only Line. This is my only occupation, I did well last year, and this year is starting out very good. I work in the Detroit Metro area - one of the most depressed economies out there and I stay busy all year 
So "yes" their is a place for the small independent auditor
Posted @ Wednesday, January 11, 2012 8:27 AM by Carl D. Clark
I am an independent auditor who recently went full-time into the business. Did so knowing the December/January period would be slow. 
 
True, last year the bulk of my work was with the utility sponsored BPI audits, but I am branching out and expanding my services. My recommendation is if you want to succeed at this as an independent - then you need to align your services and MULTIPLE certifications with those programs that require it. Then, market yourself to end users or even middle-men in the process. IF you can provide a full turn-key experience that includes consultation, education, testing, recommendations and verification - then you can make a living doing this.  
 
If you are just in it to get into a house and get out, with little regard for being an integral part of the team, then you simply won't make it. It takes a certain type of individual to make it at this as an independent or small business. You MUST be knowledgeable about a whole lot more than what they teach you to pass the certification exams and you must be both aggressive and creative.  
 
I intend to become a regional player, not national. That will work fine for my goals and it keeps the level of housing stock more manageable in terms of types of construction, etc.
Posted @ Wednesday, January 11, 2012 1:00 PM by Shawn Mullins
The independent rater will become extinct just like the local independent hvac company. There's a long way to go and a lot of inefficient houses to go around. Raters (and all businesses) need to adapt to varying conditions, and will like no big company can.
Posted @ Wednesday, January 25, 2012 9:49 PM by chris
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