Show Me the Money!

Most of us working in the field of energy efficiency try to apply the adage that, “We are doing well by doing good.” The good is working at something that will benefit our communities and contribute toward saving the planet. However, unless we also do well in financial terms, we will not be able to do good for very long. Before anyone invests the time and money to enter a new line of work, they must first figure out how they are going to make a living at it.

At this early stage in the energy efficiency industry, making a large investment of personal time and money requires a leap-of-faith. Many in the industry, particularly training organizations, will advise you to get in on the “ground floor” of an industry that seems set to expand exponentially. What no one can tell you is when that massive expansion will begin and how fast the expansion will take place. Another unknown at this point is what business models will prove successful over the long run.

The best any of us can do is to gather as much information as we can find as a basis for such an important career decision. The discussion below is our best effort at providing you with the hard financial facts you need to know so you can decide where you might fit in this industry.

Field Verification and Diagnostic Testing Rater

Income Potential

While most field verification and diagnostic testing raters are independent contractors, some raters do work for HERS rating companies. As independent contractors, raters usually recruit a number of building or HVAC contractors as clients and are paid by the job/verification. Raters working for rating companies are often paid by the job also, but considerably less than independent raters.

While the time required for jobs varies greatly, most raters can schedule between four and six jobs per day – assuming there is that much demand for their work. Most raters will take a least one day off a week to make phone calls and catch up on paperwork. The typical prices for jobs are as follows:

• Duct test and seal verification – single family residence $200 to $350
• Several duct test and seal verification – multi-family residential project $75 to $150
• Refrigerant charge, air flow– single family residence $150 to $250
• Refrigerant charge, air flow and fan Watt draw – single family residence $200 to $300
• Refrigerant charge, air flow and fan Watt draw – multi-family project $75 to $125
• Duct test, refrigerant charge and airflow-single family residence $275 to $400
• Duct test, refrigerant charge and airflow, fan watt draw-single family $350 to $500
• Smoke test $75 to $150
• Solar installation verification $??
• Quality insulation installation $??

Cost of Setting Up Business

Training Classes:

• Basic Hers class (3 days) with class materials and exam $675

Field Proctoring:

• Basic HERS field proctoring (1 job) $150/job (average)

Membership Fees:

• CBPCA HERS Providership administration fee $100 per annum

Equipment:

• Duct test and seal test:
• Duct Blaster $2,100 +/-
• Refrigerant charge test:
• Set of manual or digital gauges $200 to $1,200
• ChargeRite system $2,600 to $3,000

Cost of updating data to registry:

• Uploading verification data to registry (depends on volume) $25 to $50/verification

Annual audits:

• Audits on 1% of verifications $150/verifications (average)

Classes for other certifications:

• Solar Inspection (1day) $225
• Quality Insulation Installation (1 day). Free through utility programs

Whole-house Home Energy (HERS II) Rater

Income Potential

The business of providing HERS II ratings has not even begun yet, so it is not clear what the demand will be, what business models will be successful, or what the income potential for Whole-House Home Energy raters will be. It is the intention of the CEC to keep HERS II audits voluntary on a state level, but to encourage municipalities, utility programs and other organizations to adopt HERS II as a common standard of measurement of energy efficiency in buildings.

Potential applications of HERS II ratings include a potential time-of-sale requirement for real estate transactions, as a tool for determining the amount of rebates in energy efficiency incentive programs and as a necessary precursor for renewable energy rebates. It is hoped that, as the awareness of the need for energy efficiency spreads amongst the general public, energy efficiency will become an important factor in determining the value of a building and HERS II will become the primary measuring stick for determining energy efficiency. If that happens, the demand for HERS II ratings could realistically number in the hundreds of thousands per year.

• HERS II audit and rating (yet to be determined)

Cost of Setting Up Business

Training Classes:

• Basic Hers class (3 days) with class materials and exam $675
• HERS II class (days to be determined) $675 (for 3 days)
• Home Performance with Energy Star, Level I (3 day) $675
• Home Performance with Energy Star, Level II (3 day) $675

Field Proctoring:

• Basic HERS field proctoring (1 job) $150/job (average)
• HERS II field proctoring (1 job) $150/job (average)

Membership Fees:

• CBPCA HERS Providership administration fee $100 per annum

Equipment:

• Duct test and seal test:
• Duct Blaster $2,100 +/-
• Shell leakage test:
• Blower Door $2,800 +/-
• Combustion Safety Test:
• Combustion Gas Tester/Analyzer $600 and up
• Infrared Scanning:
• Infrared Camera $5,000 to $40,000

Annual audits:

• Audits on1% of HERS II ratings $300/job (average)

Cost of uploading data to registry

• HERS II data (depends on volume) $25 to $50/job

Classes for other certifications:

• Solar Inspection (1day) $225
• Quality Insulation Installation (1 day) (free from utility programs)
• Home Performance with Energy Star, Level III (BPI) 3 day) $675
• EnergyPro Software Classes (highly recommended) (variable)

Home Energy Inspectors

Income Potential

Home Energy Inspectors must work under the supervision of a whole-house home energy rater. The primary task of a home energy inspector is to help the primary rater collect data to be used in the calculation of the HERS II energy rating. Home energy inspectors cannot legally do verifications, operate testing equipment or process data. (see Legal Functions of California State-certified Energy Professionals [link]) While this is a new profession, it will likely be the case that most home energy inspectors will be either helpers for the rater or trainees trying to learn the profession. As such, it is anticipated that the hourly wage for home energy inspectors will probably be between $10 and $20 per hour. Current real estate home inspectors may add this training to their existing business model.

Cost of Setting Up Business

Training Classes:

• HERS II class (not including computer class) (to be determined)
• Home Performance with Energy Star, Level I (3 day) $675

Field Proctoring:

• to be determined

Cost of uploading data to registry:

• Not allowed

Annual audits:

• None required

Classes for other certifications:

• Home Performance with Energy Star, Level II (3 day) $675
• Home Performance with Energy Star, Level III (BPI) 3 day) $675

Home Energy Analyst

Income Potential

Home energy analysts must work under the supervision of a whole-house home energy rater. The primary task of a home energy analyst is to enter data into the HERS II software program and generate HERS II ratings. The home energy analyst cannot do verifications, operate testing equipment or collect data. (see Legal Functions of California State-certified Energy Professionals) Most home energy analysts will probably end up being the same independent business people who in the past have done Title 24 energy calculations using one of the energy compliance software programs. The typical cost for running a project through the energy compliance software is between $?? And $?? No doubt, the price for running the HERS II process and calculating a HERS II rating will be determined by the market, but it is yet too early to know what the price will be.

Cost of Setting Up Business

Training Classes:

• Basic Hers class (3 days) with class materials and exam $675
• HERS II class (days to be determined) (to be determined)
• Home Performance with Energy Star, Level I (3 day) $675

Field Proctoring:

• None required

Equipment:

• None required

Cost of uploading data to registry:

• HERS II data (depends on volume) $25 to $50/job (Billed to the Whole-House Home Energy Rater)

Annual audits:

• None required

Classes for other certifications:

• EnergyPro Software Classes (highly recommended) (variable)
• Home Performance with Energy Star, Level II (3 day) $675
• Home Performance with Energy Star, Level III (BPI) 3 day) $675

Building Performance Contractor

Income Potential

A Building Performance Contractor must have an active class B contractor’s license as well as earning a certification as a Whole-House Home Energy Rater. Generally, a Building Performance Contractor will contract with the homeowner to do the actual work to remediate a house to improve its energy efficiency and generate a HERS II index rating at the end of the project. The revenue potential of a building performance contractor is limited only by the market for energy efficiency and his/ her skill as a contractor. If demand for HERS II audits builds, Building Performance Contractors may well compete with Whole-House Home Energy Raters for the work, but once again, the price for ratings will undoubtedly be set by the market and it is too early to predict what that price may be.

Cost of Setting Up Business

Training Classes:

• Home Performance with Energy Star, Level I (3 day) $675
• Home Performance with Energy Star, Level II (3 day) $675
• Basic Hers class (3 days) with class materials and exam $675
• HERS II class (days to be determined) $675 (for 3 days)

Field Proctoring:

• Basic HERS field proctoring (1 job) $150/job (average)
• HERS II field proctoring (1 jobs) $150/job (average)

Membership Fees:

• CBPCA HERS Providership administration fee $100 per annum
• CBPCA membership fees

Equipment:

• Duct test and seal test:
• Duct Blaster $2,100 +/-
• Refrigerant charge test:
• Set of manual/digital gauges $200 to $1,200
• ChargeRite system (alternative to manual gauges) $2,600 to $3,000
• Combustion Safety Test:
• Combustion Gas Tester/Analyzer $600 and up
• Infrared Scanning:
• Infrared Camera $5,000 to $40,000
• Other Equipment:
• In addition to all of the tool and equipment required for a general contracting business, there is no end to the specialty diagnostic and testing tools that a building performance contractor would find useful. A general estimate for the cost of specialty tools required for a general building contractor to become a serious building performance contractor is $20,000.

Cost of uploading data to registry:

• HERS II data (depends on volume) $25 to $50/job
• Home performance data to home performance database (yet to be determined)

Annual audits:

• Audits on 5% of Building Performance jobs $300/job (average)

Classes for other certifications:

• Home Performance with Energy Star, Level III (BPI) 3 day) $675
• Note: While it is not certain yet, it is expected that many utility incentive programs for home performance and many AB811 districts may require participating contractors to be BPI certified.

Becoming a building performance contractor commits one to a lifelong process of continuing education. Not only is the basic body of knowledge about energy efficiency huge, but new developments in technology and products is occurring at a blinding pace. In addition, as the demand for energy efficiency grows, the industry will mature and the definition of successful business models will evolve and change. The successful building performance contractor must remain vigilant of the changing dynamics within the industry and be ready to learn new ways of structuring his or her business in order to stay successful.

Note: All prices and fees provided in this document are estimates and approximations and should not be relied on as accurate information.