Home run

Neil Kelly Co. implements efficiency upgrades.

It might seem safe to assume that U.S. homeowners understand how best to make their homes energy efficient. After all, Energy Star is a household name, utilities have long offered incentives for energy upgrades and the price of energy continues to rise. But the old axiom about what happens when one assumes still holds true: Nearly 40 percent of the energy used in U.S. homes is wasted, according to San Francisco-based One Block off the Grid (1BOG), which recently announced an effort to address home energy efficiency improvements.

But the recent economic downturn that’s resulted in depressed single family housing starts has led homeowners—seeking to shave home operating costs, and general contractors looking for new revenue streams, to turn to whole home performance. The decades-old industry has never quite taken off—until now.

Single-family housing starts are down 63 percent from peak levels of production during the housing boom in 2006, according to the National Association of Homebuilders (NAHB). With so many general contractors scrambling to drum up business, many are looking to remodeling work to replace lost revenue. And they seem to be finding it, but not in the usual places.

Kitchen and bathroom remodels just don’t hold the same weight they used to with homeowners who are now faced with lower overall home values, tighter credit markets and decreased job security. Further, traditional remodels don’t pay off as well as they once did. In 2008, homeowners could expect to recoup an average of only 67.3 percent of their investment in 30 different home improvement projects, down almost 20 percent from the height of the housing boom in 2005, according to the National Association of Realtors.

Such economic factors, along with an overall push from the federal government in the form of Recovery Act funds and incentives to increase the number of “green” jobs in the country, are moving whole home performance to the forefront of the construction industry.
That new industry could fill a huge niche. There are about 130 million homes in the United States that need to be retrofitted, according to Alison Kartiganer, operations manager for Seattle-based Vesta Home Performance Retrofitting, one of the first companies in Seattle to offer home-energy audits and retrofitting as a package.

She estimates that the demand in the Seattle-Everett metro area alone, where there are about half a million single-family, owner-occupied homes, could support at least 100 companies similar to Vesta.