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Nov 18, 2022

Deep Energy Retrofits Are Key to Our Energy Transition—Why Are We Not Setting Contractors Up to Successfully Implement Them?

Kelly Delaney shares her thoughts on why contractors should be set up to successfully implement deep energy retrofits.

By: Kelly Delaney

Man uses a ladder to climb on roof of home to replace the shingles.

My mother recently had solar installed on the roof of her home here in Central California. She did most everything right; she got several bids, and carefully researched each brand of proposed panels. But the chosen installer missed a key opportunity to impact her energy savings: they didn’t suggest that she insulate the roof or upgrade the giant, single pane windows that make up most of the exterior walls in her home to reduce the amount of energy expended on heating and cooling. Of course they didn’t, you say; their business is solar. They certainly aren’t going to cheapen their proposal for potential load reduction, nor is it likely they are licensed or trained to install insulation or windows.

In my own work in residential energy efficiency financing, more than half of our financed projects consist of only one energy measure, and they break my heart a little bit. The building sector is responsible for 40% of total energy use and 59% of all U.S. carbon dioxide emissions in the U.S. according to the ACEEE. Every time a contractor leaves a property with only one portion of the home upgraded instead of the system as a whole, we miss a key opportunity to dramatically improve the home’s energy performance.

A Complex Challenge

The misalignment between costs, incentive structures, licensing systems, and workforce training in building sciences places our national goals and investments towards reducing carbon emissions at great risk. Maximizing energy savings, potentially by 58% to 79%, relies on treating homes as whole systems, with improvements made to the building envelope and upgrades to heating and cooling systems, rather than as a collection of independent components. Indeed, the efficiency of HVAC heat pumps, a measure prized for its energy efficiency potential, improves by an additional 15% (reducing energy consumption between 20% to 40% in total) only when homes are well insulated, especially in colder climates.

There are many reasons why residential retrofits don’t maximize this opportunity. Energy efficiency is complex, not sexy, and mostly invisible. Many consumers don’t understand whole-home energy efficiency (or energy efficiency in general…if I had a dollar for every time I told someone I work in energy efficiency and they responded, “Oh, so solar?”). It can be expensive (a 2014 ACEEE report on residential deep energy retrofits estimated the cost to run from $50,000 to $100,000), often requiring additional electrical or infrastructural home improvements. Incentives and rebates also tend to be deployed towards single solutions (e.g., a flat financial incentive for a single piece of equipment, like a water heater).

But this problem is also certainly exacerbated by the way our regulatory institutions silo the residential HVAC, building envelope, solar, and water heating trades, which are often licensed separately (if at all). Contractors themselves are sounding the alarm: a recent report from the Building Performance Association provides several depressing anecdotes from whole-home performance contractors who often subcontract specialized work out to licensed trade specialists and say even the specialists don’t understand energy efficiency and how building systems fit together. One Building Performance Institute (BPI)-certified general contractor based in Southern California described to me his experience of working with licensed HVAC contractors: “They want to size HVAC units by square footage when they really need to consider things like the color of the roof and siding, the types of windows, the foundation type, how thick are the walls and how much insulation is there, what is the building’s height and orientation, and so on.”

There are also often few requirements for proving expertise or formal training, let alone building science training, in order to be issued a license in the first place. In fact, the states which rank highest on ACEEE’s State Energy Efficiency Scorecard (California, Oregon, Vermont, Maine, New York, Illinois) have either limited or no knowledge requirements to receive a license. A California Public Utilities Commission study similarly identified skill requirements and training standards, and keeping these standards and skills up to date as technologies advance, as significant barriers to ensuring quality home energy efficiency improvements. This matters because licensure is commonly considered affirmation of expertise, and is used as evidence by consumers and energy efficiency programs like mine that a particular contractor can correctly perform the work. We rely on employers hiring people who have completed some type of formal training, or even conducting on-the-job training, with little to guarantee that the right knowledge is being passed along.

Unfortunately, this lack of advanced building science knowledge is one sticking point in the energy transition that I don’t think policy “carrots” can completely solve. There are many great building science training and certification programs available. However, inertia, a business-as-usual approach, and backlogs of waiting customers mean there is little incentive for contractors to differentiate themselves with additional credentials, especially when consumers by and large aren’t asking for efficiency. The influx of work that will flow from the Inflation Reduction Act (IRA)’s tax and rebate incentives could contribute, paradoxically, to this stand-off.

A Solution Is Already Poised For Deployment

The good news is that the IRA also includes funding for states to provide training and education for contractors to perform home energy efficiency and electrification improvements. States have often been met, understandably, with fierce resistance to attempts to increase the requirements for contractor licensure. These are in many cases working class professions and requiring additional training can be a genuine cost and time burden. However, contractors are where the dreamy policy work of statehouses and commissions meets reality; they are the real heroes of the energy transition and we should treat them as such. We need to set high expectations for contractors, but also empower them to meet those goals.

I suggest that states consider using this funding to subsidize and provide advanced building science training, and require it for contractors seeking licenses that touch the home’s energy performance, with additional training required at the time of license renewal. This isn’t a radical idea; in California, smog check inspectors and repair technicians must renew their licenses every two years after completing four to 16 hours of update training. Contractors don’t need to be jacks of all trades, but they can be better prepared to work with the building system as a whole. We could even re-imagine licensing systems altogether, and consider establishing a structure that emphasizes the holistic nature of efficiency. State governments and utilities can also help drive consumer demand with incentives based on whole home performance, rather than individual components, as some programs are already piloting.

I don’t mean to imply that this suggestion will ensure every home upgrade is perfect; there are many ways to improve deep retrofit rates (and plenty of consumers who will turn down a deep retrofit proposal from even the most expert contractor—I couldn’t even convince my own mother!). Nor can I begin to suggest precise details of what building science training should encompass; it will differ for each state, trade, and perhaps even climate zone (the U.S. Department of Energy has created some guidelines to start from). But, with the passage of the IRA and similar initiatives at the state level, hundreds of millions of dollars are about to be thrown at the home energy efficiency market. If we want to amplify the impact of each dollar, we should invest in our contractor workforce to meet the challenge.

Author’s Note: These are my personal opinions, and not those of my employer.

Kelly Delaney
Energy Efficiency Financing Specialist

Kelly Delaney is an Energy Efficiency Financing Specialist with the State of California's GoGreen Financing program, a public-private partnership helping California meet its energy savings goals by increasing private investment in energy efficiency retrofits. She is a 2022 Fellow with the Clean Energy Leadership Institute. Kelly received a MSc. in Environmental Management and Policy from Lund University in Sweden.

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