Healthy Homes & Home Performance: WE HAVE NO BUSINESS MODEL - Part 1 | Energy Circle, LLC

Healthy Homes & Home Performance: WE HAVE NO BUSINESS MODEL - Part 1

Peter Troast

The nexus of healthy homes and home performance continues to be at the forefront of our industry’s hope for the future. But, for all the cheery prognostication (including my own), serious effort by smart people, real progress on credentialing, and general optimism, we are failing to focus on the key issue: how is the “healthy home” concept a viable business model for the home performance industry?

With each passing day, I see signs that we are losing the market. When a magazine as mainstream as Vogue links poor indoor air quality with bad skin, you’d think we could take a victory lap. But the fix, according to that article, is simple: install a shiny Dyson Pure Cool Link -- a sexy fan/filtration device that solves all problems -- for a mere $499. No home upgrades needed. Read the endless comment stream on Elon Musk’s tweet mentioning Larry Page, and you’ll quickly see: everyone’s solution is filtration.

My view is: The healthy home movement benefits home performance only when it becomes a new and incremental driver of demand for whole-house retrofit work and high-performance new construction.

Stated a little more directly, until homeowners start hiring whole-house contractors to fix perceived health problems in homes, then WE HAVE NO BUSINESS MODEL. In order for the concept of "healthy homes" to grow the home performance market, the concept must become a demand driver in its own right.

Before I go further, it’s important to say that we’ve made a ton of progress, and credit is due to a great many people for where we are today. The BPI Healthy Home Evaluator micro-credential, the leadership of GHHI (Green & Healthy Homes Initiative), the brilliant guidance of Kevin Kennedy, progress on insurance -- these are all major strides and the people pushing them deserve high fives all around.

The value of what we already provide

Don’t misunderstand the real value we’re already providing: whole-house retrofits driven by energy reduction or comfort that have an ancillary benefit of a healthier home are great. Mike MacFarland’s case study in Redding CA about saving a child from regular visits to the emergency room still chokes me up. But that family engaged Energy Docs to take control of their PG&E bill. For them, the health benefit was ancillary. Speaking around the country, I title Mike’s story: Came to Reduce Energy. Saved a Kid.

The point I’m trying to make is that if we continue to treat healthy homes as a secondary benefit to what we already do, we won’t grow the size of the opportunity in a meaningful way. Instead of being peripheral, our goal needs to be to more directly connect the market driver of a healthy home to the comprehensive, whole-home approach.

Shifting the focus beyond diagnostics

For good reasons, the focus of IAQ-related services thus far has primarily been on diagnostics. To be sure, using and understanding diagnostics for IAQ is critical. But they are a means to an end, and we’re not talking enough about that end.

Just as is the case with energy auditing, healthy home audits are a challenging “product” to build a business around. (I hate writing that, by the way, but I’m afraid it’s reality.)  Under the best conditions, companies are getting $350 for a comprehensive energy audit. The market characteristics around home health testing are worse. Low-cost sensors in devices like Foobot are cheap, accessible and sit in your house year round, arguably providing more tangible value to a homeowner than a one-time health audit, regardless of how thorough. The growing awareness of IAQ is sure to boost demand for testing, but it will be low margin and low ticket size.

We need to be focusing more on how the companies that will execute whole-house fixes will do so as viable, profitable businesses. If taking control of air infiltration could be a central tenet of every healthy home fix, then we’re starting to get somewhere. Yet we all know in spades that the value of air sealing, for example, is not obvious to most homeowners and is often a tough sell. So we’re going to have to work hard to educate. With air control as the base measure, adding whole-house ventilation starts to get interesting, and certainly has meaningful impact. Technical practitioners who know building science should be the ones talking about these measures, not marketing guys like me.

Without question, consumer awareness of healthy home and the reality of indoor air quality is on the rise. All our data and testing show it. But, at least for now, we don’t have a business model to seize it, and are losing out, once again, to cheap, shiny objects.


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