EnergyLogic Inspection Report Updates

If you thought that communicating the status of an inspection would be straightforward you would be wrong.    Therefore, in an effort to better ensure clarity and consistency in the delivery of our inspection reports we will highlight the following changes, effective Monday, May 21, 2018. 

One very important change is regarding inspection report language.

The term “Builder Sign Off” will be changed to “Fix and Proceed”.  Items that were formally designated as a “Builder Sign Off” will now be designated with hammer icon and a “Fix and Proceed” message.

   Fix and Proceed

   Correct and Re-inspect

   Photo Re-Inspection 

  • These are inspection items that fail to meet the intent of a program or code but are minor in nature and do not warrant an on-site re-inspection.  They, however, must be fixed in order to ensure compliance with the appropriate code or program.  Any issue designated as “Fix and Proceed” becomes the sole responsibility of the Builder’s field construction management team.
  • Items that were formally designated as a “Failure” will be replaced with the message “Correct and Re-inspect”.  The “Correct and Re-inspect” designation is for inspection items that clearly fail to meet the intent of a program or code and are serious enough in nature to require on-site verification that the item has been corrected.
  • EnergyLogic has added a “Photo Re-inspection” ability which will be designated using a blue camera icon on our reports.   “Photo Re-inspection” is an option used at the discretion of the HERS Rater. It can be used when, and only when, all “Correct and Re-inspect” items do not warrant an on-site re-inspection.

For example, if five items are called out as “Correct and Re-inspect” and four of them could be “Photo Re-inspected” but one needs an on-site inspection the entire group would be assigned “Correct and Re-inspect” with an on-site re-inspection as a trip is required.  On the other hand, if at the time of re-inspection some inspection items have not been fully fixed but it is clear that they are being addressed, a “Correct and Re-inspect” may change to a “Photo Re-inspection”.

Regardless, when “Photo Re-inspection” is called out items need to be addressed, photo documented and sent to the Rater as quickly as possible or an on-site re-inspection may be ordered, drywall may need to be removed, and all kinds of issues could arise. It is EnergyLogic’s expectation that photos will be received within 24-36 hours to verify that the item has been corrected.

It is obvious that every scenario can’t be exemplified here so I want to make it clear that inspection items will be assessed and allocated as Passed, “Fix and Proceed”, “Correct and Re-inspect”, or “Photo Re-inspection” at the sole discretion of the Rater based on their judgment. EnergyLogic is always open to dialogue so please ask questions of our field rating team whenever needed and we will do our best to get you the clarification you need in the timeliest manner possible.

Lastly, the structure and look of our reports are changing as well. 

All changes have been instituted to more clearly express and report the issues that are occurring in the homes we work in.  We need to know if you agree, so please let us know if you see areas for greater clarity.

Thank you!

If you have any questions, please email Robby Schwarz.

Robby Schwarz (faked)

Who to Contact:

Robby Schwarz
Principal, Director of Builder Relations

Email Robby
720-838-0677

Colorado Springs is on the Move to a New Compliance Code

What does this mean for you?

Regional Building Department (RBD) is bringing the 2015 codes and the International Energy Conservation Code to El Paso County.

These code changes won’t require a complete overhaul for your current building process, because RBD has included flexibility in their adoption of the code, making the code transition meaningful, and adaptable at the same time.

Key things you need to know:

  • The code presents multiple pathways; selecting the best pathway is critical.
  • Building a 2×4 wall is a possibility, but you won’t be able to use the prescriptive path.
  • The simulated performance alternative allows trade-offs which can help you maintain your current energy specifications.
  • Through code compliance, EnergyLogic can generate your HERS Index score to help position and market your homes, and to help ensure that you receive eligible utility incentives.
  • Pikes Peak Regional Building Code Implementation Documentation Link

RBD is now accepting new plan submissions under the 2015 IECC.

  • New plan submission is required, which presents an opportunity to change building pathways.
    • Blower door and duct leakage testing are required.
  • New HVAC designs are required, which presents an opportunity to evaluate, and potentially change, HVAC designers.
    • Building cavities are not allowed as ductwork.

How can you best prepare?

EnergyLogic is well versed in the new code and is prepared to support our partners to make this transition as painless as possible. We understand that the path to a successful partnership means working together in all phases of the building process to ensure that everyone has input and is apprised of both cost-effective and flexible options to achieve code compliance.

If you have questions or would like to schedule a time to discuss pathways that meet your needs, please please email Robby Schwarz.

Robby Schwarz (faked)

Who to Contact:

Robby Schwarz
Principal, Director of Builder Relations

Email Robby
720-838-0677

The Misconception That Buyers “Don’t Care” About Home Performance

I just had a meeting with a builder EnergyLogic is working with and I felt like I was having a déjà vu moment. Our conversation seemed straight out of the early 1990’s. That being said, the reality is that there continues to be a perception that consumers do not care about home performance.  Here is the punch line of our conversation: “Buyers simply don’t care.  All of our specifications are better from insulation to HVAC and windows.  From what I see they (the buyers) gravitate to lower cost vs. higher performance.  Our Sales staff is selling what we are doing, so why should I continue.”

My concluded thoughts were “Wow – where to start?” As I see it, there are four main issues that need to be addressed from a statement such as the one above.

  1. What is the disconnect between what the data supports vs. what we are seeing in the field?
  2. Do we understand how building and expectations have changed in our market and in our country?
  3. The mentality of “if we offer an option, they will buy it, and that will demonstrate that they want it” works for aesthetic options but does it work for performance/efficiency base options?
  4. We think we are educating buyers, but are we really?

Let’s dive into each of the main issues mentioned above:

1 – What is the disconnect between what the data supports vs. what we are seeing in the field?

Data from all sectors disproves that buyers do not care. For example, The National Association of Home Builders (NAHB) released a study titled What Home Buyers Really Want; an excerpt regarding the purpose of the study states that it is “a study which outlines home buyers’ preferences for home type and size, room layout and design, kitchen and baths, windows and doors, accessibility and outdoor features, electronics and technology in the home, energy-efficiency and choosing a community.”

So what do homeowners want?

“First and foremost, energy-efficiency. Some of the most wanted features involve saving energy, i.e. energy-star rated appliances and windows, and an energy-star rating for the whole home. Nine out of ten buyers would rather buy a home with energy-efficient features and permanently lower utility bills than one without those features that cost 2 % to 3 % less.” Additional key findings of the NAHB study is available here.

According to the U.S. Department of Energy:

  • A typical existing resale home in the United States scores 130 on the HERS® Index system and would have utility costs of approximately $200,000 over a 30-year mortgage.
  • Utility costs for a home that scores 100 on the HERS Index would be 30% less, saving $60,000 in operating cost
  • Utility costs for a home that scores 65 on the HERS Index (which is approximately the average score for new homes in Colorado), would be approximately half, saving $100,000 in operating cost over 30 years.

This data is meaningful to home buyers and has been shown to influence buying decisions.  There are many reasons why homeowners buy the homes that they do – location, quality, price, amenities, and other factors play into those decisions. In the past, energy-efficiency was believed only to have played a small role in particular home-purchase decisions, but studies like the NAHB’s are supporting that in our modern world, energy-efficiency provided by a high-performance home is now in the mix when making a new home-buying decision.

2 – Do we understand how building and expectations have changed in our market and in our country?

Today’s modern consumer expectation has not directly followed the evolutionary path that our buildings have.  For example, the NAHB study also indicates that today’s buyer wants a bigger house on a smaller lot, more bedrooms, basements, garages, luxury master suites, etc. Builders have responded to these desires, but the way homes are being built has also evolved which has shifted buyer’s expectations in an interesting way.

Building materials and systems have changed dramatically over the course of the last 25-30 years. As an example, when I started in the industry working for a regional production builder, my task was to research how to bring new “green environmental” building materials into the production building arena.  These materials included things like I-joist, OSB, and blown fibrous insulation. These building materials are the “norm” found on construction sites today.  Straighter, more dimensionally sound manufactured lumber, blown insulation, and all the other modern construction materials improved the structure and performance of our homes.  Pure and simple, these materials made our homes tighter and more efficient by themselves. We can utilize them in different ways to get even better performance, but the main point is that the expectations of homes have changed because we build differently than we did in the past.

In conclusion, over the course of 25-30 years, people have moved into a new home and been more comfortable, paid lower utility bills, and have begun to associate modern expectations with new home purchases. Most of these expectations are never spoken out loud and many of them have been passed down from generation to generation outside of the influence of the building industry. Now most buyers believe that just because it is new, it will perform according to these unspoken expectations. Durability, efficiency, and especially comfort, are the hallmark of these expectations and are the ones that lead to the increase in builder warranty issues.

I expect to be able to walk from room-to-room and from floor-to-floor in my underwear and be comfortable. If that comfort level is lacking and does not meet my expectations, I will call the warranty department.  These expectations need to be included in the buying and selling process and builders need to double-down on creating and understanding that just because it is new, all homes will not perform equally.  Some new homes perform better than others, but all will perform better than a 1980’s house.  The trick for builders is to demonstrate that my new home is better than the competitors.

3 – The mentality of “if we offer an option, they will buy it, and that will demonstrate that they want it” works for aesthetic options but does it work for performance/efficiency based options?

The mentality of “if we offer an option they will buy it which demonstrates that they want it” mentality works for aesthetic options, but does not work for performance/efficiency-based options.  Granite counters, hardwood floor, additional bedrooms and other aesthetics are options builders can offer. Levels of performance are integral to how a home is constructed that is either there, or is not.  Consumers already expect the home to perform, so a performance option makes no sense and experience has demonstrated over the years that they don’t sell.  When you try to sell efficiency as an upgrade, aren’t you saying that your base house is not as efficient?  Why would a buyer want to buy an inefficient home from you when it appears that efficiency is included with your competitor’s home? What ends up happening is the option is not sold which is interpreted as meaning the public is not interested.

Thrive Home Builders has the best-documented case demonstrating this fact.  They offered their version of a zero-energy home as an option, which resulted in only selling a few of these homes. They then moved to include it as a standard feature, including the additional $30,000 price-tag, and have had no problem selling the new package no problem.  They, therefore, have made zero-energy and indoor air quality standard features of their package offering, which has been the number one differentiator between themselves other market competitors.

4 – We think we are educating buyers, but are we really?

If our sale techniques are not working to sell what we believe to be the best product, is it a correct conclusion that our buyers don’t want what we are offering, or does it say something more about our sales technique? Transitionally, in the Colorado market, builders have given away the performance measures in their homes rather than selling them. I believe that a buyer’s research extends to the following; location, schools, floor plan, and aesthetics.  They visit a specific community so they have already made a location and school decision. Now the salesperson presents and sells the architectural layout and configuration of the home and the aesthetic options.

The majority of buyers don’t ask more than superficial questions about the performance and efficiency of the home. Therefore, it is up to the salesperson to bring it forward in the conversation, because within any given community location, schools and for the most part, floor plans and aesthetic options are the same for most builders.

Here are four things that can help sales personnel bring the conversation forward and arm your prospect with questions to ask your competitors:

1. Research the HERS® Index score.

  • Are you rating your homes? Do you know your average HERS Index score?
  • Can your salesperson explain the HERS Index score in three sentences?
  • Do you have a display that describes the HERS® Index and the actual rating of the model home in the model home?
  • Do you run the HERS Index video on a loop in your home?
  • Are your salespeople challenging your prospects to see if the other builders they are looking at are rating their homes to compare average scores?

2. Create a comparison checklist to hand out to your prospective buyers. Pick four meaningful value-propositions so that buyers can compare you to others. Use those four things to highlight how you will meet their unspoken expectation of comfort and efficiency. Be sure that they leave your model home with an understanding that all new homes are not created equal, even though they might look that way.

Great Homes Builder ______ Builder ______
Average HERS® Index 65
Third-Party Quality Assurance Inspections X
Above Code Compliance X
ENERGY STAR® Certified X

 

3.  Consider partnering with a program. Programs such as ENERGY STAR® not only help to ensure that you are building the high-performance home that you think you are, but offer tremendous resources to help market your homes. ENERGY STAR marketing collateral is offered at no cost.  The ENERGY STAR label has over a 90% recognition rate amongst consumers. Branding your company with a program brings tremendous value and instant recognition. Most builders do a poor job talking about the great things that they build into their homes. If you can be a little better and consistent with your message, you will see success.

4. Consider including an economic message. The cost of ownership is often as equally important to buyers as the cost of buying a house. Monthly utility bills are the largest controllable portion of the cost of ownership. A simple way to estimate what the average utility cost would be is to take the annual cost from the Home Energy Rating Certificate and divide it by 12.  In the case below $1,817/12=$151.42 per month.  In addition, if you take the annual savings number from below and multiply by an average of 30 mortgages you get $49,620 savings.  These are two quick economic messages that talk specifically to the cost of ownership and savings potential.

Another economic message that can be used is to take advantage of an Energy Guaranty. For example, EnergyLogic’s Built-In Savings Guaranty will pay the homeowner the difference between the predicted annual costs plus 10% and the actual cost. In this way, in partnership, we and a builder are stating that we have such confidence in our process of modeling, building, and providing quality assurance that we will stand behind it with a guaranty.

Building a home is not a simple task.  Building a home without a sound, applied building science and systems-thinking approach lead builders toward a path of excessive builder risk.  Therefore, to recoup value from sound building methodologies, builders need to become better marketers and stronger promoters of the great work they do! Many of the tools are right at their fingertips and my hope is that I was able to help bring them into your grasp.

If you have any questions, please email Robby Schwarz.

Robby Schwarz (faked)

Who to Contact:

Robby Schwarz
Principal, Director of Builder Relations

Email Robby
720-838-0677

Work Completed by EnergyLogic in 2017

We want to begin by thanking each and every one of you for giving us the opportunity to serve your needs, whether it be through consulting, code and program compliance, HERS Index services, or quality assurance needs. We take pride in our partners and relationships, as we couldn’t be successful without each and every one of you to help achieve increasing the comfort, safety, durability, and quality of residential homes.

We are not only proud of our EnergyLogic ‘Logicians’ for the tremendous job they continue to do, but we are also proud to have worked with our industry partners through some challenges which affected many professionals across our industry in 2017. Those issues, such as Flak Jacket and labor shortage aside, we should be proud of what we’ve all been able to accomplish. EnergyLogic is thankful for every opportunity that our partners and their teams have provided by allowing us to strengthen our partnerships, and to tip our glasses toward welcoming another successful year in 2018.

As we’re working our way through the first quarter of 2018, it’s always good to take a few moments to reflect on our collective accomplishments from the year prior. 2017 was a busy year up and down the Front Range of Colorado. As shown in the graphic chart above, EnergyLogic has focused on performance for our partners by completing 4,000+ rough inspections and near 3,900 final inspections. As we reflect upon each of the metrics supported in this graph, we can’t help but get excited about what’s to come in 2018.

Like most of our partners, we continue to grow and innovate to better meet the challenges of our industry. Through the journey that has brought us here, and the journey ahead, we’d like to share a few highlights:

  • We’re beginning our 12th year at EnergyLogic. Much has changed in both our industry and our company, as we have learned that being flexible and adaptable to change is an important focus, and is what has helped to make us successful.
  • A lot of our time in 2017 was spent evaluating our systems and processes, refining our service offerings, and implementing efficiency improvements. This journey brought us to the launch of our new Vision and Mission:
    • Vision: A world in which every person lives in a home that promotes happiness and security.
    • Mission: To meet our partners where they are and engage them in the journey of building the best possible homes.
  • We continue to nurture our strong cultural foundation through the elements of our core values: A – All for one and one for all; B – Build a better mousetrap; C – Chase perfection; D – Do the right thing; and, E – Energy. Each of our core values individually, and collectively, support the passion of what we do, and help us to focus on ways we can work together to become better at what we do.
  • 2017 brought significant growth through our HVAC design service, specifically, our HVAC design, testing and inspection package. Many of our partners have discovered value in pairing these services together to verify and ensure that the system performs in the field, reducing potential warranty and comfort complaints. We also saw increased growth of our third-party quality assurance services. We are actively expanding this offering in 2018.

As we take each new step throughout 2018, we carry forward our insights from 2017 which will help us to better serve our partners and to realize our newly launched vision and mission.  Thank you for your continued confidence in EnergyLogic.

Please reach out to me, or to any Logician if you have thoughts on how we can improve.

Happy 2018!

– Robby Schwarz and the EnergyLogic Team

If you have any questions, please email Robby Schwarz or Rusty Buick

Robby Schwarz (faked)

Who to Contact:

Robby Schwarz
Principal, Director of Builder Relations

Email Robby
720-838-0677

2017 Builder Tax Credit Update

2017 Builder Tax Credit Update

EnergyLogic was informed on February 12, 2018, that Congress retroactively reinstated the 45L Builder Tax Credit for 2017.

By April 1, 2018, EnergyLogic will be sending builders an annual report for all 2017 rated homes. Passing tax credit will be indicated on this report. Once you receive the report mentioned above, you will easily be able to access final report packets. Tax credit documentation is contained within every final report packet, regardless of a pass or fail status.

Easy Access to Retrieve Tax Credit Documents

By using your builder login to EnergyLogic’s DASH database, you can easily access these documents within the final report packet.

Link to document on how to search and locate tax credit documents packets in DASH

Contact Tracy Larson at tracy@nrglogic.com if you need directions, username, and password for the DASH builder login.  Tracy will be sending a report by April 1, 2018, that lists all homes that qualified for the tax credit. This will make your search easier by shortening the list of packets you need to locate.

At this time, the 45L Builder Tax Credit has not been approved for 2018.

How the Tax Credit works:

 Many may not remember how the tax credit qualification is actually quantified. Your house is imputed into the modeling software tool. Within that software (REM/Rate) the house is duplicated, thus creating two houses that are geometric twins; House A and House B.  House A is assigned the energy specifications that are outlined in the 2006 IECC, and House B is assigned the energy specifications you, the builder, actually used. The tax credit is issued for House B when it is 50% more efficient in heating and cooling energy use than House A, built to the 2006 IECC.  For the modeled “House,” the software determines what the 50% target is, and if the as-built house (House B) is performing equal to or better than the 50% targeted energy use.

The tax credit adds one further complication: in that it has created a two-part test to demonstrate 50% compliance.  The home’s heating and cooling energy use must be 50% more efficient than the 2006 IECC, as measured by normalized end-use loads and the building envelope component loads. The building envelope component loads alone must account for at least 10% of those savings. If both of these tests pass, the house qualifies for the tax credit.  According to the software compliance reports, a majority of homes pass the envelope loads test but do not always pass the normalized end-use loads test. Normalized end-use loads account for the differences in equipment types that exist when using gas or electric utilities.  This is a bit of a ‘black box’ calculation; this portion of the compliance matrix has to be addressed by a specification change in order to capture more rebates.

Only homes that are tested and inspected can qualify for the tax credit.  While we can do some analysis to help increase the percentage of the homes that will qualify, it is unlikely that 100% of your homes will qualify.  This is because the analysis utilizes a whole-house evaluation and some of the parameters are not in the builder’s control, such as house orientation.

In order to claim the tax credit, you will need the tax credit certificate from us and IRS Form 8908.

 

If you have any questions, please email Robby Schwarz. 

Robby Schwarz (faked)

Who to Contact:

Robby Schwarz
Principal, Director of Builder Relations

Email Robby
720-838-0677