Grab the energy ‘edge’

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Now that high energy costs and a faltering economy are giving Americans a double dose of worry, homeowners are looking to trim their monthly budgets wherever they can.

Happily, the good news also comes in twos, since energy-efficient home designs and products can also make a house healthier and more comfortable to live in. And rural builders who can deliver their clients a one-two punch of lower utility bills and higher quality construction stand to gain a competitive edge in a tough housing market.

“Being a ‘green’ builder can definitely give you a marketing edge because it’s a niche that can distinguish you from other builders,” affirms owner Bob Tortorice of Building Alternatives Inc. in Franconia, N.H.

Similarly, owner Todd Meinhold of H&D Quality Builders in Roanoke, Ill., says “green” construction practices “provides us an edge in marketing, to the point where we’ll even take less profit on a job so that we can position ourselves as ‘the’ sustainable builder in our territory.”

Tortorice and Meinhold began to emphasize green building and energy efficiency several years ago. Both report their early entry is now paying dividends, and it’s not only the marketing edge they have achieved. They have gained experience in green construction practices so that building energy-efficient homes is now standard for their companies.

“Many rural builders say, ‘I’ve always done it that way.’ But once you get past the learning curve,” says president Scott Foley of Ultimate Construction in Cottage Grove, Wis., “green construction techniques become second nature to you. That means your costs come down and you can distinguish yourself through quality. Giving customers a ‘healthy house’ with good indoor air quality is a major selling point with homeowners, right along with energy efficiency.”

The current economy will compel many homeowners to stay longer in their current homes. For that reason, Foley notes, “Being a green builder can give us an edge in the remodel market.” In the same way, construction manager Bryan Wolford of WC Buildings in Newark, Ohio, cites another immediate benefit for being known as a builder of energy-efficient homes.

“The current downturn is actually helping the case for green building,” Wolford believes. “A year ago, everybody was building as fast as they could. So ‘being green’ went by the wayside. But now, those clients who are still doing any building are really looking into energy savings.” Then down the road, he adds, “If you’ve established a reputation as a quality builder during the tough times, then you’ll have a leg up on the competition when the good times return.”

Learning the ropes

Bob Tortorice remembers building his own house 30 years ago and, despite a desire to be energy efficient, finding a general lack of “green” building materials then on the market. “For example,” he recalls, “after having the insulation installed, it took me another two weeks to go through and fill in all the gaps.”

Through the 1980s Tortorice learned more about developing technologies for energy-efficient construction when he worked for a modular home manufacturer. But in time, rather than sell only one product, “I decided to branch out on my own, so that I consult with clients to help them get what they wanted rather than what I was selling.”

Over the years he has built homes with timber-frame and 2×6 panelized construction, modular and post-frame, structural insulated panels (SIPs), and insulated concrete forms (ICFs).

Now as owner of Building Alternatives, Tortorice finds that despite all the national headlines about energy savings, “As a builder you’ve still got to be proactive because, 90 percent of the time, you’re the one who’s got to make clients aware of the options,” he relates. “People may come to us because they like the fact that we offer diversified types of construction. But we’ve got to educate them on the alternatives.”

Even so, Tortorice must gradually, in stages, ease homebuyers into accepting green building principles.

Sharing your knowledge

“You start by educating clients about the building envelope, since all the fancy energy-saving systems won’t save them money if the house is drafty,” he counsels. “The next level is to look at passive solar energy — and then active solar, and then geothermal.

Nevertheless, Tortorice reports, “It’s still the tax credits for installing energy-saving technology, and the incentives from the power company, that are needed to win over the homebuyers.”

He has likewise found that the prospect of improved indoor air quality can be a critical selling point. And he has sold some customers on the idea of starting out with an energy-efficient building envelope “and then prepping the house so that energy-saving systems can be installed later when the client can afford it.”

Tortorice eschews a “standard” package and instead tailors each home to the client’s wants and needs. “But if the homeowner has no knowledge or bias,” he adds, “I’d recommend ICFs for the basement and SIPs for the shell.”

SIPs can be installed by one trade contractor, he explains, whereas 2×6 panelized wall construction requires three trades — one to erect the walls, another to spray the insulation and a third to install exterior insulated panels. For that reason, about 80 to 90 percent of homes constructed by Building Alternatives employ SIPs.

Yet if selling “green” requires consumer education, then rural builders themselves must be educated about the available technologies and building techniques. “You have to learn slowly in order to really learn all the options,” Tortorice points out, “but oftentimes, rural builders have nowhere to go for education.”

Helpful information

Resources he has found helpful include those offered by the United States Green Building Council (www.usgbc.org), the Green Building Program of the National Association of Home Builders (www.nahbgreen.org), and the federal Energy Star program (www.energystar.gov).

“You should also get active in your local homebuilders association and ask them to sponsor seminars and workshops on green building and energy efficiency,” Tortorice continues. “That way, you get the benefit of the trainers’ experience and of other builders in your area.” While he concedes that manufacturers of building materials and systems can provide information, he cautions rural builders against being locked in to particular products.

In order to be a leading green builder in his market, Tortorice has been compelled to train carpenters in the necessary building techniques. He helped establish a homebuilders association in his area, and recently his company launched a new division that provides consulting services to architects and homebuilders.

“We’ve got to push green education from both ends,” Tortorice believes, “with builders as well as consumers. Otherwise, rural builders will just continue doing things the way they’ve always done it.”

Energy savings vs. resale value

At WC Buildings, Bryan Wolford reports that in his central Ohio market “it’s about 50/50 between residential customers asking us about energy efficiency and us bringing up the subject.” With three crews on the road, about two-thirds of the company’s business is light commercial projects and the remainder is residential and agricultural jobs.

The larger scale of commercial projects can provide striking proof that energy-efficient construction techniques are effective. WC buildings recently put up a 6,400-square-foot furniture showroom and helped the client reduce its average electric bill from $1,000 per month to just $300. “For both commercial and residential construction,” Wolford observes, “manufacturers of building materials are putting out better products, because today’s owners are paying more attention to life-cycle costs rather than just upfront capital construction costs.”

That being the case, Wolford believes that post-frame construction offers homeowners a highly marketable alternative to traditional stick-building. “You use less material, have less waste, and get a more efficient result,” he says. And for rural builders who have learned green building techniques, he adds, “It doesn’t cost that much more to be energy-efficient.”

Like other builders, Wolford agrees that the place to start is educating homebuyers on the benefits of an energy-efficient building envelope.

“Doors and windows that are Energy Star-qualified are big sellers,” he reports. On the other hand, “cool” metal roofs—that reflect rather than absorb heat, thus reducing air-conditioning loads — are a harder sell. “Customers prefer the darker colors, even though they absorb more heat,” he relates. “So they install the roof colors they want in order to get the ‘look’ they want.”

For his part, Scott Foley also finds a 50/50 split between homebuyers who inquire about energy savings and projects where Ultimate Construction must raise the subject. And he admits that consumer education is required to promote green building “since most people would rather have the amenities they want — say, a cherry hardwood floor or a deluxe kitchen — than upgrade to green systems.”

Although some prospective clients do their own research on green options and have sold themselves, Foley continues, “Most people are really pinching pennies right now and are afraid of the upfront costs for energy-saving systems.”

Foley explains to them how spending $20,000 on such systems might only add $70 to their monthly mortgage payments while cutting utility bills $100. He tells them about tax credits and utility rebates available to homeowners who install energy-saving devices.

“But clients are also worried right now about the resale value of the home they’re building,” he notes. “Many of them figure that amenities may add more resale value than, say, solar panels.”

Then, too, most homeowners “expect to be in their houses for seven years, not 20,” Foley reports. “They’re worried that the next buyer won’t want to pay extra money to get a house with solar panels.” For that reason — and because of the upfront cost — solar panels are difficult products for Ultimate Construction to sell. “People are so cost-conscious now,” he states, “that energy-saving products must be cost-efficient as well as energy-efficient.”

Still, Foley believes that green building is clearly the wave of the future. “Builders need to get ready now,” he advises, “because green products and practices are eventually going to be mandated by the permitting process.” In addition to training its own crews, Ultimate Construction is “also training the trade contractors we use in how to do the construction practices we expect from them.”

An educated customer

H&D Quality Builders has constructed custom homes ranging from 1,700 to 7,700 square feet, says Todd Meinhold. Light commercial projects account for half its volume, while post-frame barns and storage buildings comprise about 30 percent. But even though residential jobs account for only 20 percent, they play a key role in Meinhold’s business.

“We don’t go after custom home jobs,” he explains, “but we do build homes for our commercial and post-frame customers who ask us. If they want a home built  — in addition to, maybe, a horse barn — then we want them to come to us, rather than going to someone else for their home construction.”

Since Meinhold’s company serves a territory where agriculture is common, then his customers are generally aware of environmental concerns. At the same time, central Illinois is an affluent area that is home to numerous corporate headquarters.

“All in all, then,” he says, “our customers are well-informed. So they usually ask us about energy efficiency, rather than vice versa. That’s why we’re working hard to establish ourselves as ‘the’ sustainable builder in our market.”

Since 2005, when H&D Quality Builders began to emphasize green building in its marketing, the company has adopted some new building practices. “We don’t waver on the issue of good doors and windows,” Meinhold notes. “The building envelope is where it starts. So we use 2×6 construction and then a combination of fiberglass and foam insulation.” Fiberglass keeps the cold temperatures from coming in. But since fiberglass has air pockets, the foam insulation keeps any cold air out.

Commenting on different energy-saving products, Meinhold says that efficient windows are “an easy sell.” He has also found that geothermal energy is popular in his market, and some customers are willing to consider windmill energy.

“We can install a windmill system for maybe $30,000, although many customers still can’t afford that amount,” he says. H&D has used SIPs and ICFs with some projects, and recently launched a division to market cool metal roofs. “But solar panels are hard to sell,” he observes. “The panels are an aesthetic issue since they have to be big to collect enough solar energy to do any good.”

Dealing with so many options — fiberglass and foam insulation, 2×6 construction, SIPs and ICFs, solar panels, geothermal and windmill energy — requires a lot of homework.

“We use architects and subcontractors who are knowledgeable about green building and tap into their expertise,” Meinhold relates, “and we spend time getting information from the Internet, from the construction magazines, and from associations like the National Association of Home Builders and the National Frame Building Association. It’s all about good networking.”

Meinhold believes government mandates for green building will eventually come builders’ way. But even now, interest in energy savings is market-driven. “Baby boomers are realizing they need to save their nest eggs,” he advises, “and to do that, they’re willing to spend some money for a sustainable home.” The secret to selling these customers on energy-efficient systems, he believes, is to “ask each client how long they plan to live in the house, and then tailor a green package that offers a combination of economic payback and resale value that meets their individual needs.”

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