EEBA Newsletter

The views expressed in these articles are solely those of the author and do not reflect the views of EEBA staff, officers, or board members. EEBA welcomes guest articles from qualified authors, and we offer these articles as a service to the high-performance housing industry as a way to encourage discussion and collaboration between industry professionals on relevant issues.

Posts From August, 2018

High Performance Builders Seek the Next Frontier

Many are coming to the conclusion that energy efficiency may no longer be enough
High Performance Builders Seek the Next Frontier

As code requirements and consumer demand raise the performance of U.S. homes, energy efficiency isn't the marketing differentiator it once was.  Just ask Brandon DeYoung of DeYoung Properties.  When he, along with his brother and sister, took over the family's Fresno, Calif. homebuilding business a decade ago they had a vision: build super energy-efficient homes with low electric bills and minimal environmental impact.  They've succeeded.  Their latest project is a community of 36 Zero-Energy production homes, the state's largest.

But while that community is newsworthy, it doesn't put the company as far ahead of the pack as they would like to be.  A new rule from the California Energy Commission will require all homes built after 2020 to have rooftop solar panels, so the DeYoungs did what all marketers always do: find additional ways to set themselves apart.

The result was the DeYoung Smart Home.  Every home is outfitted with a Samsung home automation hub, as well as a smart light switch and door lock.  "Buyers can add lots of other smart devices as options," he says.  This has helped the company keep its edge.  "If energy is the only focus you will miss some of the market.  The buyer looking for an efficient home will also be looking for higher-quality products in general."

DeYoung isn't alone in this thinking.  High-performance builders, along with trade groups like the Energy & Environmental Building Alliance, have been trying to raise the efficiency bar of new homes for years.  With that effort paying off, leaders in the high-performance niche are embracing further innovations.

Communicating Health

From a sales and marketing standpoint, the best innovations push buyers' hot buttons.  The desire for smart technology is certainly one of these, but a potentially stronger one is health.  Energy efficient homes are engineered for good indoor air quality, and a growing number of builders are giving that top billing.

One of these is Phoenix-area Fulton Homes.  Although it's an ENERGY STAR builder, VP of Operations Dennis Webb says that designation has lost some of its edge.  "In Phoenix, ENERGY STAR has become an ante to get in the game."

Four years ago, Fulton signed on the US EPA's Indoor airPLUS program.  They now use low-VOC adhesives, carpet and carpet pad as well as an electronic air cleaner and a radon detector.  Workers also seal duct openings during construction to keep them from getting filled with drywall dust and other contaminants that can get blown into the house later.  Webb says that cost is minimal: since they were already doing ENERGY STAR, it only adds a few hundred dollars per home, which the company absorbs.

It has been a great differentiator.  "It's an awesome marketing tool that gives us a decisive advantage," says Webb.  For one thing, most consumers haven't heard about the program so they perceive it as cutting edge.  More importantly, it addresses parents' concerns.  "About 12% of kids in Arizona have asthma, and if your kid is one of these, health becomes way more important than granite countertops.  We simply ask people if they would rather live in a home with healthy air or stale air."

Competition has also led Denver-based Thrive Home Builders to pivot to a health focus.  "The biggest development we build in is Stapleton," according to Susan Elovitz, the company's Director of Marketing.  "The developer there backed us all the way when we wanted to do an entire community of Zero Energy homes.  It was a big differentiator, but the developer liked it so much that they want other builders in the development to start building zero energy ready homes."

Thrive, like Fulton, is doing Indoor airPLUS.  Energy efficiency is still important, but it's now part of an overall healthy home message.  "A lot of our clients care more about health," she says.  "We see that as the next frontier."

But while consumers want smart, healthy homes with predictable energy bills, those homes don't sell themselves.  "Most of the builders doing Indoor airPLUS build great homes but aren't good at marketing," says Webb.  "We spend more on marketing and advertising than any of them."

Who What Where

Throwing money at the problem won't solve it, however.  As for any marketing effort, builders in this niche must put a lot of thought into the three M's: the market, the message, and the medium.

There are different ways to define the customer (the market).  Some builders rely on a general understanding of what people in its area want.  "Energy and comfort are important to our customers but we also have high asthma rates, and our summer air quality is as bad as Los Angeles, including lots of smoke from wildfires," says DeYoung, whose smart home features include technology to improve indoor air quality.

Others prefer to create a specific customer avatar.  "We identify our customer as a 35-year old woman who is all about the environment and the health of her family," says Elovitz.  "She shops at Whole Foods, drives a Prius and in general pursues a healthy life."

When deciding what to say (the message), Thrive aims squarely for this avatar but also tries not to alienate other customers.  A good example of this is an ad showing a young mom feeding her baby.  The tagline: "What she's breathing is as important as what you're feeding her."

Fulton takes a broader approach by making sure the Indoor airPLUS label shows up everywhere: brochures, floor plans, price sheets and the front door of the design center.  It has also trained its salespeople to talk with customers about the program.

However, Webb cautions against making guarantees about energy use or health.  "We make it clear that we're certified by EPA because we follow the steps required by the program and our work is verified by a third-party inspection company."

DeYoung is even more careful in its messaging.  They offer "a home designed with the potential to produce as much clean energy as it uses in a year."  He says that the company relied heavily on its legal and PR advisors to come up with wording that gets the message across but deftly avoids making guarantees.  For instance, they used "potential" production in recognition of the fact that solar panels' output degrades slightly over time.  "People in California are extremely litigious so we're super-cautious," he says.

As for where to advertise (the medium), high-performance builders use the same mix as everyone else, including an optimized website, local newspapers, radio ads and social media.  Thrive has even hired on online sales counselor.  His phone number is on every web property, and he interacts with web and social media leads to helps steer them to the product best suited for their needs.

When it comes to energy features, show and tell still has its place, if it's sophisticated enough.  Thrive, for instance, uses the garage of each model home as a design and technology studio.  It's similar in concept to what used to be called the building science center but slicker.  It also includes displays that show the difference between the company's homes and those of its competitors, as well as the money buyers will not be spending by purchasing a Zero Energy home.

Energy is still important, but in a more competitive environment, the builder has to work a bit harder to quantify its homes' energy use versus that of competitors.

 

For a more in-depth discussion on this topic, the builders quoted in this article will be on a panel called “Selling & Marketing: A How-To By & For Builders” at the EEBA Summit in October. Go to summit.eeba.org

 

Photo: Zen BT Studio1.jpg

Caption: Thrive's Design and Technology Studio emphasizes the company's health focus while also comparing its homes’ energy efficiency to those of its competitors.  More and more high-performance builders are combining those messages in all their marketing materials.

Photo Credit: Thrive Home Builders

Refuge From the Storm

Resilience is another reason to build Net Zero Energy homes
Refuge From the Storm

When winter storms put the lights out in Matt Coffey's neighborhood he doesn't worry. "My house can stay in a comfortable temperature range for days," he says. That's because his 3-bedroom zero energy Cape-style home combines a high-efficiency building envelope and HVAC system with rooftop photovoltaic panels.

Coffey is one of five staff architects with South Mountain Company (SMC), an architecture, building, and energy firm West Tisbury, Mass. The company is one of a cadre number of builders who realize that while energy-savings and healthy living remain the top selling points for high-performance construction, these homes can also be made resilient enough to keep going when the power goes off.

Resilience in the face of weather events and power outages could shape up as the cutting edge of performance building. It's a benefit that builders of Net Zero Energy homes can easily offer with just a few adjustments.

And outages are a fact of life. Hurricanes, tornadoes, blizzards ice storms, wildfires and other weather incidents that threaten the power grid seem to make the news, weekly. This March, for instance, 2.8 million people in the Northeast and mid-Atlantic found themselves without power after a nor'easter blew across the region. Six months earlier, hurricane Irma had put 7.6 Southeast residents in the dark, some of them for a week. If the weather weren't reason enough to take resilience seriously, policymakers now worry about terrorists taking the grid down with a cyber attack.

Every problem comes with an opportunity, and the opportunity here is that a high-performance home is by nature more resilient in the face of these threats than one built to code standards. As homeowners grow more anxious about the effects of nature's wrath, making them possible to stay home with minimal discomfort during an outage will give the builder an added edge.

Beyond Green

At the core of a resilient home are well-established sustainable design features that high-performance builders already include in their homes. "Many of the strategies needed to achieve resilience, such as really well-insulated homes that will keep the home habitable if the power goes out or interruptions in heating fuel occur, are exactly the same strategies we have been promoting for years in the green building movement," says Alex Wilson, president of the Resilient Design Institute in Brattleboro, Vt. "The solutions are largely the same, but the motivation is one of life-safety, rather than simply doing the right thing."

Wilson believes that this life-safety aspect of green building will appeal to a wide market, and could help accelerate acceptance with mainstream builders and homebuyers.

For builders already delivering Zero Energy Ready homes, the good news is that true resilience is the next logical step. "A house that achieves net-zero-energy performance with a modest-sized solar array, say less than 6 or 8 kW, is probably well enough insulated to be 80% to 90% of the way there," says Wilson "It is not that hard to take the next few steps." (RDI's website includes several articles on how to do that.)

While SMC builds custom homes, this approach has also been embraced by some production builders. One of this is Thrive, a Denver company that will close 240 homes this year and that recently made rooftop solar electric panels and backup batteries standard equipment. If a blizzard takes down the power lines, the battery and solar panels will keep some lights, the refrigerator/freezer, and the furnace or heat pump going for long enough each day to keep the home habitable.

Thrive was able to offer this benefit because it was already building Net Zero Energy Ready homes that lose heat very slowly when the power goes off. "We decided to make Zero Energy part of our company brand," says CEO Gene Myers.

Setting Priorities

While many builders don't include backup power, a home has to achieve minimum performance baseline to be considered resilient. In cold climates like those where SMC and Thrive build, the absolute minimum is a home that, during an outage, will stay in a comfortable temperature range for several days during winter with no power at all.

In areas subject to severe storms, such as on the Atlantic coast, resilience also includes a near-obsessive level of waterproofing—a wet and moldy house isn't one people will want to stay in. One builder who understands this is Jim Schneider, who builds in Virginia Beach where horizontal, wind-driven rain is common. "The envelope absolutely has to be tight," he says. That means staying current with the latest flashing details, which he says manufacturers and building scientists are constantly refining. "Building science has evolved quite a bit in recent years so you really need to make a commitment to keeping up with it."

If you want to include solar panels and a battery you need to size them. More capacity equals more money so the decision usually depends on the client. "If the home gets its water from a well you at least need enough power to run the well pump," says Coffey. "Beyond that, some people are happy with a form of at-home camping, while others want to have every amenity no matter what happens."

Coffey also says that the most resilient homes replace combustion appliances with electrically driven ones. "A solar system can keep an electric water heater and space conditioning system going indefinitely."

Dollars and Cents

Taking steps toward resilience doesn't have to inflate the budget, which is why some affordable builders are doing it. According to Tiffani Irwin, director of construction at Our Towns Habitat for Humanity in Charlotte, NC, a lot of affiliates have committed to building affordable, zero-energy homes. The cost to get there varies, with the biggest variable being what state and local building codes already mandate. "If you're building a code-level house in Oklahoma it will cost more to get there than if you're building the same house in Maryland which has a stricter energy code," she says.

And while the first few homes can require the builder to invest some serious time in design and engineering, the process gets easier with each project. Most builders quickly settle on a suite of cost-effective details they can use on any project.

The biggest secret to keeping costs down, according to Irwin, is careful design and engineering. That includes pre-construction modeling to calculate the projected energy savings and the payback for the homeowner. "Builders need to develop a rapport with a good rater then work closely with that rater," she says.

Of course, that's something all builders should be doing.

For builders interested in learning more, EEBA's annual Summit will focus on Zero Energy construction and Resilience in the Built Environment. Go to summit.eeba.org.

 

Caption: One hallmark of a resilient home is a high-performance building envelope. Here, workers are protecting the WRB and beefing up wall insulation by covering it with a foam-and-OSB nailing base for the siding.

Photo Credit: South Mountain Company