EEBA News

Promising New Tool for High Performance Home Sales

The Meeting Map aims to disarm prospects' status quo bias
Promising New Tool for High Performance Home Sales

High-performance and Zero Energy homes are a growing percentage of the housing market. But while these homes offer tangible benefits—including a healthy, comfortable environment and enough energy savings to offset any extra construction costs—some people still balk at the price premium.

According to James Geppner, resistance persists in large part because of how architects and builders communicate those benefits.  He says that buyers will embrace high-performance homes if those homes offer solutions to real-life problems, but that most salespeople aren't doing a great job helping them see that connection.

Now, he thinks he has just the tool to open their eyes, a tool that will help buyers conclude that their most important needs can only be met by a high-performance or Zero Energy home.

Geppner is Executive Director of Erase40, a company whose mission is "to use behavioral science to speed the adoption of low and zero energy buildings."  He believes that the application of small behavioral levers during the sales process will raise demand for these homes more effectively than code mandates or financial incentives like solar tax credits.

Erase40 released the first version of its Meeting Map in late September.  The Map is a way to structure and guide the buyer's decision-making process and forms the basis of a sales training the company will offer.  Salespeople can use it to guide buyers through the five areas most impacted by high-performance homes: thermal comfort, indoor air quality, noise issues that interrupt sleep, savings on energy and maintenance, and home resale value.

Each section of the Map covers one of these issues in language that leads buyers to make that issue a priority.  After each section, there is a series of questions for them to answer about what kind of home they believe will best address that priority.

Geppner says that walking the prospect through each of these sections separately will help them see past the exclusive focus on price that leads so many people to choose conventional homes.  It does this by short-circuiting what he calls future discounting.

Future discounting is why people reach for a donut even though they want to lose weight: the immediate appeal of something sweet has more power than better health in the future. It's also why people put great effort into choosing kitchen cabinets while ignoring outcomes that will have more impact on their long-term happiness, such as better air quality and lower operating costs.  As a result, they end up with homes that make them poorer and less healthy.

Moving the Conversation

The Map relies on carefully crafted behavioral levers to steer buyers toward making those long-term benefits a priority.  Each lever need only make a small adjustment.  "A decision is less like a flash than a train that follows a track and is diverted one way or another by switches along the way," according to Geppner.

Levers used in the Map process include:

Independent evaluation of criteria.  When making decisions that require them to weigh lots of variables, people rely on mental shortcuts. "They unconsciously winnow down the variables to the five or six most important to them, then produce an intuition," says Geppner.  In the case of choosing a home, buyers who aren't properly led will likely discount the benefits of Zero Energy construction.  The Map's goal is to keep those benefits top-of-mind.

Public commitment.  Each section requires the buyer to verbally commit to evaluating homes in a specific way.  For instance, in the health section, the buyer agrees to prioritize features and benefits that will keep their kids from getting asthma.

Framing.  The map is very deliberate in the way it frames each of the five issues.  For instance, the money section groups home expenses into two emotionally charged categories. "Yours to keep," is money used to help pay down an appreciating asset (the mortgage payment); "Gone for Good" expenses include utility bills and maintenance— costs that high-performance homes reduce.

Loss aversion.  Because people will pay more to avoid a loss than to realize a gain, the Map positions the benefits of Zero Energy construction as loss reduction strategy.  For instance, the acoustic benefits help homeowners avoid sleep loss. "Some homes are quiet and effectively block out noise from outside," it says.  "Others don’t give the occupants any escape from the noise beyond their doors."

Research Based

To develop the Map, Geppner drew on his background as a financial analyst.  "I know how to evaluate a market.  I can see where it's going and also what's broken," he says.  He also relied on peer-reviewed behavioral science models.  These include the Theory of Planned Behavior, which predicts how people's beliefs influence their actions, and the Stages of Change Framework, which explores how people make decisions.

To tailor the behavioral models to homebuyers and sellers, Geppner had about 300 conversations with 80 different architects, builders and homebuyers over the course of a year.  He learned what lies behind the decision to buy or not buy a high-performance home, then crafted an intervention that took these findings into account.

His research also identified what doesn't move people to action.  Emphasizing the payback period of energy-saving features isn't a compelling psychological driver.  Neither is talking about climate change.  "Some buyers want the social rewards of saying they're concerned about climate change," says Geppner.  "What they're usually just saying is 'please like me'."  The smart builder will offer that approval, but will realize that people seldom back these signals with dollars.

In fact, the list of psychological drivers isn't limited to those covered in the Map, though they’re the most universal and powerful.  Other motivations vary according to the buyer, but Geppner says the training will make the salesperson better able to uncover them and include them in the discussion.  "I'm neutral on what drives someone's decision," he says. "If they think that buying a Zero Energy home will ward off a zombie attack, I'm not going to argue with them."

The Map and its sales methodology are just the first in a series of planned tools.  Erase40 is also working on an intervention that Zero Energy builders can use with developers to help them see the benefits of including these homes in their communities, as well as one to help get lenders on board.

All of this work has the same goal: to make it easier for architects and builders to find clients for high performance homes—and to get clients to place a higher value on those homes. 

Geppner is seeking architects and builders who would like to put the Map methodology into practice and help validate its effectiveness.  He invites anyone interested to contact him at James@Erase40.org.

 

The Energy and Environmental Building Alliance is the leading professional organization devoted to making healthy, safe, durable, resource-efficient and smart-grid friendly homes mainstream. For information on its Annual Summit as well as its ongoing training events, please go to www.EEBA.org

 

ILLUSTRATIONS

Cover Photo: Salespeople can use the Meeting Map to guide homeowners through the five issues most impacted by their home homes.

 

James Geppner, a former financial analyst, believes that the use of behavioral science can help builders sell more high-performance homes.

 

The Map uses comparisons and questions to help buyers think through each issue. The goal is to help them conclude that a high-performance home is the only type that will meet their needs.

 

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

Home Battery Q&A

Answering the most common builder questions
Home Battery Q&A

You've decided you want battery storage. How do you go about choosing the right one for your customers? Battery makers will help you through the process, but you're more likely to make the right choice if you go into those discussions with some basic knowledge.

According to Adam Weinstein, a regional sales manager with battery-maker Sonnen, builders tend to ask a lot of the same questions when deciding what battery type and system to choose for their homes. We asked him what those questions are and how he generally answers them.

 

Q: What main types of home batteries are on the market today?

A: The two most common types for home storage are Nickel Magnesium Cobalt (NMC) and Lithium Iron Phosphate (LFP).

NMC batteries are made for rapid charge and discharge, and also pack a lot of power into a small, mobile package. Those qualities have made them popular with some electric vehicle manufacturers. However, news stories about thermal runaway, or explosions, in electric vehicles have made some homeowners reluctant to install them.

LFP batteries weigh more and cost more, so they're unsuitable for electric vehicles. However, this type of battery has a longer lifespan and is designed specifically for stationary applications with no chance of thermal runaway, making the chemistry inherently safer and ideal for home installation.

 

Q: How long do home batteries last?

A: Manufacturers' warranties are a good way to compare the service life of two batteries but the actual lifespan will depend on battery chemistry and how often it gets cycled (from completely charged to completely discharged and back). Manufacturers of LFP batteries claim their batteries to last for 10,000 to 15,000 cycles, or over 30 years on a home that charges and discharges it every day. An NMC battery, by contrast, might be limited to a few thousand cycles, or 5-10 years on the same home.

 

Q: How do I size the battery?

A: It depends on a few key factors: the size of the solar array being integrated into the home, the size of the loads that the homeowners intend to back up with the battery in the event of an outage and the number of daily loads needing power.

Here are three sample battery sizes along with the loads they will power in backup mode for a typical home.

Battery size: 4kW/6kWh

  • Refrigerator
  • Microwave
  • Three lights
  • One computer
  • One tablet or phone
  • Three extra outlets

 

Battery size:7kW/10kWh

  • Refrigerator
  • Microwave
  • Three lights
  • One computer
  • One tablet or phone
  • One television
  • Three extra outlets
  • One single-room air conditioning unit

 

Battery size:8kW/16kWh

  • Refrigerator
  • Microwave
  • Three lights
  • One computer
  • One tablet or phone
  • One television
  • Three extra outlets
  • One single-room air conditioning unit
  • Two fans
  • One Washer/Dryer combination

 

Q: Where can my battery be installed?

A: The biggest consideration is temperature and moisture. Most batteries will deliver full power in a temperature range of 40F to 120F, so if you build in an area that gets hot in summer or cold in winter you don't want to put them in an unheated room or in direct sunlight. Most people install them in a semi-conditioned basement or garage.

Batteries are available with outdoor-rated enclosures that protect them from the elements, but an outdoor rating is not a failsafe option.

Some batteries, specifically LFP, are safe enough to install in a conditioned living space with the wiring totally hidden. In fact, many of the LFP batteries Sonnen has installed in German homes are in living spaces as they're considered a status symbol.

 

Q: Do I have to wire the house differently?

A: If you intend to use the battery for backup power, the only difference is that the electrician will need to wire a sub-panel, called a protected loads panel, with the circuits you want to power in the event of an outage.

 

Q: What is the difference between an AC-coupled and a DC-coupled system?

A:  An AC-Coupled system has two inverters: one for the solar panels and one for the battery. All power flowing to and from the battery—whether from the grid or the solar panels—flows through the battery inverter.

AC-Coupled is the easiest way to add a battery to an existing PV system and also provides redundancy—if one of the inverters fails, you don’t lose both your solar and storage. Also, the AC-coupling allows homeowners to charge their batteries from multiple power sources: solar, the grid and even gas generators.

In a DC-coupled system, the battery is charged directly from the panels. The panels and the battery also share a single "hybrid" inverter. Because this system type requires one inverter, equipment costs are lower, making it popular for new construction specifically with new solar installations.

With a DC-Coupled system, the batteries will only be charged by the solar array.

 

Healthy Growth for Solar Battery Storage

While the West Coast still accounts for most installations, the technology is taking hold in all parts of the country.
Healthy Growth for Solar Battery Storage

It used to be that a typical grid-tied solar electric system only worked when the grid worked.  If a storm took out the power lines the homeowners ended up in the dark, despite those shiny panels on the roof.

That's changing thanks to more efficient and cost-effective battery technology, as well as to utility involvement.  Greentech Media Research (GTM) estimates that for the first time, total installed home battery capacity of 15.9 megawatts has reached near parity with utility-scale deployments of 16 megawatts.

It's on track to get even bigger. "The residential [storage] market this year is going to be over five times the size of the market last year," said GTM Senior Analyst Brett Simon. And while California and Hawaii account for 74 percent of that capacity, installations are also growing elsewhere, with products from companies that include LG, Panasonic, Samsung, Sonnen, and Tesla.

Distributed Grid

Electric utilities are helping to drive this growth.  For instance, Walpole, NH-based Unity Homes recently built a home in Guilford, Vermont with a 10-kW solar system and a Tesla Powerwall 2.0 battery supplied by Green Mountain Power (GMP) at an installed cost of $1,500.  GMP Communications Director Kristin Kelly says that the batteries usually cost $7 to $8,000 installed, but that the utility wants to create a distributed storage grid it can draw from during peak demand times.  It began installing batteries in late 2017 and will have 2000 in place by the end of 2018.

Of course, most homeowners expect tangible benefits from that $1,500, so it's no surprise that most batteries are going into rural homes where winter storms often cause outages.  The batteries provide an estimated 8-12 hours of backup power, and the subsidized cost makes them cheaper than a whole-house generator.

Outage protection certainly drives demand for storage where there's severe weather, such as winter storms in New England or hurricanes in Florida and the Gulf states.  But without a utility incentive, they can still be a hard sell.  For instance, Sean Buckley, Owner of Harvest Sun Solar, a solar installer in Tisbury, Mass. says that with no subsidy only 10% of his customers have been willing to pay full price for a backup battery.

If customers in Buckley's market didn't pay a fixed electric rate, he might get more interest.  According to Energy Sage, an online solar energy marketplace, natural markets for storage are where the utility’s rate policy includes any of the following: time of use rates, demand charges, the lack of net metering, or net metering reimbursement based on avoided rather than retail costs.

Staying Under Threshold

Some utilities charge customers a higher rate if they exceed an energy use threshold.  Others have net metering arrangements that don't reimburse homeowners at the retail rate but rather at avoided cost—what the utility would pay to buy or generate that power.

Both apply in the Milwaukee area, where Tim O'Brien Homes recently broke ground on Wisconsin's first Zero Energy neighborhood.  Homes at Red Fox Crossing in New Berlin will be certified under the Department of Energy’s Zero Energy Ready Home program as 40% to 50% more efficient than a typical new home.  They will also include rooftop solar panels.

While these homes don't include battery storage, Craig North, the company's VP of Product Innovation and EEBA board member, says the company plans to include it in future projects.  "Our utility providers have put a tariff on over-production of solar electricity," he says.  "Homeowners also only get 25 cents on the dollar for excess power put back into the grid."

Avoiding Peak Rates

In time-of-use areas, the system can be configured to avoid buying power when it's most expensive.  That describes much of California.  "The differential between Summer on-peak and off-peak in San Diego is as high as 32 cents per kWh," says Michelle Mapel, Senior Director of Sales and Marketing at battery-maker Sonnen.  "If you can use the battery for the four hours of peak, you will definitely save money."

That potential savings led Bakersfield, California builder Dave Packer to complete a Net Zero Electric model home with solar panels and a Powerwall 2 battery system.  When Pacific Gas & Electric's rates are low in midday, excess power from the panels flows into the battery until it's fully charged.  The home can draw from this stored power in late afternoon and early evening when rates triple.  The battery also provides backup power but Packer says that outages in his area are rare and short-lived.

PG&E, like Green Mountain Power, offers batteries at a subsidized rate of $1,500, which Packer believes will motivate more homeowners to buy.

Even with time-of-use rates, a lot of homeowners aren't going to pay $7,000 or more for a battery option.  Gene Myers, CEO of Thrive Home Builders in Denver, and EEBA Board President, has a solution.  Rather than a battery option, put them in all homes and build the cost into the selling price.

Thrive will certify all of the 240 homes it completes this year under the Department of Energy's Zero Energy Ready Home program.  All homes include rooftop solar panels and a storage battery on a wall in the garage.

The battery helps mitigate time of use rates and provides backup power.  One battery can handle basic lighting, the refrigerator and freezer, as well as enough outlets to charge electronic devices.  It won't run the heat pump, but Thrive's homes all have backup furnaces.

So far there hasn't been any customer pushback.  "Having a Zero Energy product is part of our brand," says Myers.  However, he also admits that given his homes' price point of $500,000 and up, the extra cost isn't the big deal it would be in a lower-priced home.

Thrive Homes in Denver is one of a growing number of builders who are outfitting homes with solar panels and storage batteries.  Shown here: the ZEN model.

Community Power

Thrive isn't the only company that has decided to make batteries standard.  Sonnen is working with Mandalay Homes in a 2,900-home development in Prescott Valley, Arizona.  Every house will have an individual solar system and a battery that together add about one percent to the home cost but save the homeowners 20 to 30 percent on electricity, thanks to a utility policy that gives a lower rate to customers who can completely power their homes for a portion of the day.

Mapel says that Sonnen is negotiating with the utility to configure storage in other communities in a way that meets the utilities' load-shifting and other needs.

In Birmingham, Ala., the utility has actually taken the lead on a community-wide storage effort.  Alabama Power is working with Signature Homes on a 62-home "Smart Neighborhood."  It will include enough solar capacity to run all the homes, which will have HERS scores of around 45, or 35 percent more efficient than standard new Alabama homes.  It will also have Samsung lithium-ion battery storage.

What makes the Smart Neighborhood unique is that rather than being installed on individual homes, the panels and the storage will be centralized in a 2-1/2 acre site, creating what the utility calls a microgrid.  Customers won't be able to switch to battery power during peak demand times but have agreed to let the utility adjust their loads to reduce total electric use via smart thermostats and other controls.

Jim Leverette, a Research Engineer with Southern Company, Alabama Power's parent company, says that the utility envisions battery-enabled microgrids as part of homebuilding's future, and is using the neighborhood as an R&D project.  "We want to evaluate the pros and cons and to get a better understanding of technical challenges."

 

Batteries such as those from Sonnen help mitigate peak demand charges and act as a backup power supply. They also look good.

Zero Energy Goes Mainstream

Wisconsin's first net zero neighborhood is selling ahead of schedule
Zero Energy Goes Mainstream

Do you question the appeal of Zero Energy Homes to mainstream homebuyers? Then you may be missing an opportunity. Tim O'Brien Homes, which builds in the Milwaukee and Madison, Wisconsin metro areas, is finding a strong demand for such homes if they're well designed and if buyers understand the financial and lifestyle benefits.

The company just started work on the state's first Zero Energy neighborhood, Red Fox Crossing in New Berlin. All homes in the 34-lot development will be certified under the Department of Energy’s Zero Energy Ready Home Program, a well as the ENERGY STAR, WaterSense and Indoor airPLUS programs.

Buyer interest has been encouraging. As of May 2018, before drywall work on the model home had even been completed, a full one-third of the homes had been pre-sold. That's seven months after sales opened, which is a faster sale pace than in the builder's other neighborhoods.

That success is supported by a four-legged stool that includes the right market, the right land, the right systems and the right message. Let's take a look at each.

The Market

Homes at Red Fox Crossing are priced in the mid-500's, which is move-up for the Milwaukee market. Each will have a 7-9 Kilowatt rooftop solar system that, on an annual basis, produces at least as much electricity as the home uses.

A relatively high price point makes sense for a first-time solar project, as homeowners in that niche are more willing to absorb the cost of the panels into the mortgage. But the high-end niche isn't the only market for rooftop solar. Craig North, Tim O'Brien Homes' Vice President of Product Innovation, is confident that the evolution of this neighborhood will help the company understand how to offer cost-effective solar to more price-sensitive buyers.

"We see real potential at the lower end of the market," he says. "We think rooftop solar would make sense to any value conscious buyer regardless of demographic or price point."

The homes at Red Fox Crossing don't look like "solar" homes, which is one secret to the builder's success.

The Land

Solar will work on any lot with a clear view to the Southern or Western sky, but the right land provides those views while also supporting the builder's design goals.

To ensure that outcome O'Brien partnered with Neumann Companies, a local land developer. "We found a great piece of land that accommodates a North-South road pattern," says company principal Matt Neumann. That means the homes will face East or West.

Wait a minute -- don't you need a South-facing front or back elevation for solar? Not necessarily, says Neumann. "Most people prefer not to have solar panels on the front of their home, and with this orientation the builder can put them on a south-facing side elevation."

The Systems

All of the community's homes will have grid-connected solar panels installed by SunVest Solar, a Neumann company and a sister company to Tim O'Brien Homes.

When it comes to systems, however, solar is the easiest one for the builder. The real challenge is engineering a home in which savings from the electricity generated by the panels more than covers the extra cost they add to the mortgage payment.

To meet that challenge the builder needs to get a lot of details right.

Take the mechanical system. Each home at Red Fox Crossing will feature higher efficiency two-stage furnaces that, according to North, will offer immediate savings for the customer. The mechanical system will also keep the homeowners comfortable year-round while providing clean, fresh air and maintaining optimal humidity levels.

The home's thermal envelope will include energy-saving features that minimize the load on the mechanical system. And it will be designed and detailed for long-term durability.

This type of high performance building is really the next step in homebuilding's evolution. It includes the elements of "green building" but also goes beyond them. Indeed, raising the bar of home performance is an important part of Tim O'Brien Homes’ culture. "We're constantly evaluating how various elements of our homes work together as a system," says North.

That constant evaluation is crucial for any builder wanting to go down this path -- getting to Zero Energy means addressing a lot of small details. Over the past five years for instance, improvements at Tim O'Brien Homes have included increasing exterior insulation levels on foundations and framing, making heat recovery ventilation a standard feature, and using spray foam to seal attics before installing the insulation.

North says that much of the company's knowledge about high-performance building came from its involvement in the Energy and Environmental Building Alliance (EEBA), where North serves as a board member. He credits EEBA with introducing the company to the Zero Net Energy concept: he learned about the Department of Energy's Zero Energy Ready Homes program at one of EEBA's annul summits and decided to adopt that program's specs.

EEBA also helps the company meet its continuous improvement goals by providing the opportunity to network with other high-performance builders. It's a community of pros -- builders, manufacturers, architects, engineers, and others -- who are committed to helping one another build better homes and grow their businesses.

"The ability to learn lessons from top industry professionals has been instrumental in helping us differentiate ourselves from the competition," says North. "And the connections made through networking have allowed us to pilot some cutting-edge products and technologies."

The Message

As part of its continuous improvement system, Tim O'Brien Homes has every one of its projects rated according to the Home Energy Rating System (HERS) Index from the

Residential Energy Service Network (RESNET). Feedback from those ratings help show the company ways to build higher quality, more durable, greener, energy efficient homes while providing strong value to the customer.

The HERS system also has marketing advantages. That's because it helps buyers understand the True Cost of Homeownership and directs them to builders who can lower those costs. The HERS Index website lists builders who commit to having their homes rated for energy performance and, according to RESNET, some Multiple Listing Services (MLS) are beginning to list HERS Index scores.

There's even data to support the payoff from a good HERS score. A 2016 study by the North Carolina Building Performance Association of more than 34,000 high-performance homes found a strong correlation between a lower HERS Index rating and a higher sale price.

In fact, a lower True Cost of Homeownership is an important part of Tim O'Brien Homes' marketing message. It seeks to help buyers understand that though a high-performance home costs a bit more to build than a code-built home, it doesn't cost any more to live in. The message is that people can get more home, more comfort and more peace of mind without spending any more money.

This understanding is especially important when it comes to solar. North points out that helping homeowners understand how Solar fits into the True Cost of Ownership model is a key making it more mainstream. The company has worked hard to address that.

Tim O'Brien Homes has found that people will embrace high-performance construction once they understand Total Cost of Ownership, and the company's marketing materials reflect that.

At the Cutting Edge of Home Warranties

Is electronic monitoring part of homebuilding's future? This builder has used building science training to get ahead of that trend.

To some builders, a perfect world is one where they get through the warranty period without issues, then never hear from the homebuyer again until it's time for another new house.

Greenville, SC builder Todd Usher calls that shortsighted, and has begun differentiating his company with a bolder approach. Usher is founder and president of Addison Homes, which builds 15-20 semi-custom homes per year, and he is rolling out a series of technology enhancements that will provide homebuyers with value for years after the sale. The first enhancements will consist of sensors that monitor critical home systems and alert Usher or his staff to potential problems that require follow up.

It's the seed of what will eventually grow into a long-term warranty program that will benefit his buyers and bring in extra revenue. What has given him confidence to offer such a program? He gives much of the credit to ongoing training in high-performance building for himself and his employees.

Health Check

Usher got the monitoring idea from the auto industry. "GM sends me monthly updates on my truck's health and tells me when it needs service, so I thought 'why not do that for homebuyers?'" He realized that, done right, monitoring and notification could help him build and maintain brand loyalty.

He started with a crawlspace humidity sensor. Crawlspaces are common in the South, and Addison now installs Ultra Aire's Sentry product in all new homes. It measures humidity and temperature, and sends an alert if the numbers fall outside of pre-defined parameters. The sensor sends the data to the cloud (via the homeowner's wifi) then to a handheld app that Usher can use to keep track of multiple homes. He alerts the homeowners if anything looks like it needs a closer look.

Crawlspaces are just the start. Addison will eventually outfit homes with equipment that monitors a variety of home systems. The possibilities Usher is considering include:

  • Uponor's new Phyn Plus product to detect leaks at the main water supply
  • Navien's NaviLink to monitor system status on his homes' tankless water heating systems
  • Lennox wifi-enabled thermostats to alert him to potential problems with the heating and cooling system
  • SMA inverters to track efficiency and output of the rooftop solar panels

The ultimate goal is to offer extended warranties on all these systems. He will supplement this with warranties on additional items—for instance on termite damage if the homeowners sign up for an annual termite inspection and treatment.

While Addison does not currently charge for monitoring, that's in the works. The company will eventually give new homebuyers free monitoring for two years then offer to continue it, along with warranty protection, for a reasonable monthly fee. Usher is confident that most customers will opt-in once they get used to the benefits.

He admits that monitoring HVAC and hot water systems will take some negotiation, as manufacturers like to award that service to the dealer or installer. But he insists that homeowners prefer to deal with one trusted source. He is hoping that volume will help bring manufacturers around— Usher's company is part of the CB USA buying group, which could provide some clout —but that alone won't be enough. "We still have to demonstrate our expertise," he says.

Training Needed

Of course, before you can demonstrate that expertise you have to have it. And if you want to introduce an extended warranty program your work quality better be such that you don't get many warranty calls. That's where training comes in.

Take those Southern crawlspaces. They're notorious for condensation problems, but Usher avoids such problems by closing the crawl and bringing it into the building envelope. The benefits he has gotten from this and other high-performance building techniques have made him a big believer in training. "If you promise a durable home with no moisture or indoor air quality problems, you better learn how to deliver on that promise."

Usher's training has included Southface's Earth Craft House program as well as training on RESNET's Home Energy Rating System (HERS). But he says the most valuable ongoing education has come from the Energy and Environmental Building Alliance (EEBA), where he recently joined the board of directors.

"EEBA offers some of the best, easiest to understand building science training I've ever received," he says. "It has helped me build better homes in every way: more energy efficient, with better water and air quality, and fewer callbacks. It's also the most affordable training I know of." In fact, he now sends all of his staff through EEBA's programs.

What's the Payoff?

The bottom line, says Usher, is that learning how to build high performance homes is making it possible for him to offer value-added services he would not have otherwise considered.

As a bonus, the monitoring service is also helping him improve his product. For instance, the crawlspace moisture detector on one house was sending alerts during heavy rains. He investigated and found that while there weren't any problems, the foundation drain wasn't emptying as fast as he would like. "It told me that I needed to pitch the drain a bit more on the next house."

Monitoring also earns its keep as a marketing tool. "The feedback we've gotten from homeowners is all positive," he says.

Usher wants to grow Addison's annual volume to 30 or 40 homes over the next couple of years, and he knows that referrals from happy customers will play a big part in that growth. What better way to get those referrals than to be known as a builder who exceeds their expectations by taking care of them long after you've finished the work?

Do you want to learn how to build high-performance homes that are comfortable, durable, healthy and energy efficient? The Energy and Environmental Building Alliance offers an annual three-day Educational Summit, as well as one-day training seminars in various parts of the country. For more information or to sign up go to www.eeba.org.