Top 7 Home Performance Business Trends for 2014

As we dig into 2014, it's worth stepping back and looking at the big picture for a moment. We recently took a look at the top home performance marketing trends for 2014, and today we'll expand that to review what we believe are the most important business trends for the home performance industry in the coming year. 

Without further ado, our top 7 business trends for home performance in 2014:

Indoor Air Quality Finally Emerges 

Indoor air quality has always been one of the peripheral benefits of home performance upgrades, but there are signs that it may be creeping up to the forefront as one of the primary drivers of upgrades. The challenge for the home performance industry, of course, is capturing that demand. To the avergage home owner, the relationship of their home's indoor air quality and the building's performance are not obvious. There's plenty of evidence that IAQ may be more important to homeowners than energy efficiency, and there's definitely a growing awareness about the health impacts of HP. Contractors will need to work hard in their marketing communications to make this link, but those who do will reap the benefits.

HVAC to Home Performance (and HP to HVAC) Gains Velocity

One of the most talked about trends over the past few years has been the influx of HVAC companies into the home performance arena. To date, this has been the limited to large, successful, well-established heating and cooling companies that have leveraged their network of existing customers and service contracts to cross-sell whole house services. Our view is that this trend will accelerate in 2014 as the comprehensive, whole house approach is increasingly understood as a better business model. But it won't just be HVAC --> HP. Other business models--insulation contractors, remodelers and more--will move to integrate the full set of home energy and comfort services. Smart businesses will figure out ways to learn from this trend, either by partnering with others to round out their service offerings, or moving to integrate. It makes sense that HVAC and Home Performance go together -- both, after all, focus on home energy and comfort. The successful HP companies of 2014 will figure out how to carve out a niche in this integrated space.

Net Zero Becomes the Leading Low Energy Home Brand

In residential building performance, a disparate collection of "brands" represent the labels we have applied to low energy homes. Passive House, Deep Energy Retrofit, EnergyStar, etc. While we're not suggesting that any of these will go away, our view is that "Net Zero" is the brand that will move to the forefront in 2014. And the good news is that is applies equally well to retrofits as new construction. As we all know, a big roof and a Hummer's worth of solar PV can "net zero" even the  most poorly built house; and the fact that lease financed solar panels appear to be incrementally cheap means that homeowners are not strongly incentivized to keep renewable needs as low as possible. The energy efficiency community needs to work hard to drive home the importance of "efficiency first," both in order to stay relevant as Net Zero becomes increasingly popular, and to steer that concept in a healthy direction.

Finding New Ways to Provide Recurring Annual Services

HVAC companies have mastered this, and home performance related businesses that don't have service contracts have something to learn here. We think that in 2014 we'll start to see more and more HP companies developing ways to provide recurring annual services like annual energy check-ups and/or check-ins, periodic monitoring of indoor air quality, and other regular services. The idea of "staged retrofits" will continue to grow (though the industry should heed the cautionary advice on this topic by smart contractors like Dan Kartzman of Powersmith), and we'll see other innovative ways of maintaining an active customer relationship once the first steps of a home energy upgrade have been completed. (After all, every house is a work in progress, even after initial upgrades have been made.)

Getting on the Connected Home Bandwagon

For years, the idea of home automation has struggled to become more mainstream. Now, with the emergence of low cost sensors and smartphone integrated controls, the appeal of these technologies will increase. We think the emerging term for all of this is "Connected Home." From the homeowner perspective, it's a big, confusing field with players of all kinds--wireless providers, security companies, lighting manufacturers and device companies (to name few)--all vying for this business. Since so many of the benefits of these technologies are energy related, we believe the home performance community has a unique opportunity to be the trusted advisor in this category. Companies have a choice of selling and installing, which we think will be a viable business on its own, or just advising, which is yet another point of contact to engage customers in the whole house approach. 

LED Lighting Becomes an Entry Point

This year, the price and quailty of LED lighting reaches a point that everyone wants it. What's most significant about this for home performance companies is that it emerges as a new point of entry into the customer relationship. Whole house lighting solutions, combined with smart controls, are an easily integrated new line in a home performance service offering. And just imagine the easy air sealing gains you can accomplish when installing an entire floor's worth of LED can lights. 

The Solar Train Rolls On

For better or worse, many homeowners' first entry point into the world of less or different energy for their homes will be via solar, as the solar industry continues to grow. Solar leasing, and the sophisticated marketing capabilties of the big solar companies, assure this. So that energy efficiency stays hot on the trails of solar, contractors should either get on the bandwagon or get a partner, and most definitely amp up their communications about the importance of tackling energy efficiency first.

Thoughts, comments, questions or contrary points of view? We'd love to hear about them in the comments; feel free to chime in.

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