Most people are slow to change. They stick with what they know, with what feels comfortable, and they take on something new only after watching to see what happens to the “other guy.”
This is true in professions where you least expect it. Medical research, for example, requires about 17 years to become best practice across the health care industry. According to the BeWell@Stanford site, one example of this was the discovery made at Duke University in 1983 that antibiotics administered before surgery dramatically reduced the incidence of post-operative infection. The practice was not formally adopted until about eight years ago.
According to studies on the topic, the factors that contribute to this time lag in the medical profession include: the fact that doctors are overwhelmed with new information, much of which is ambiguous or contradictory; the fragmented nature of the health care industry; and the damping effect on innovation of cost and regulatory pressures.
Sounds a lot like the impediments facing remodelers as they struggle to adjust to several core changes.
The New Normal
First, there is a new economic reality in the marketplace. Everyone I talk with is speculating on when things will return to normal. If “normal” means “the way things used to be,” then the answer, I’m afraid, is “never.”
We won’t be stuck in this deep mud forever, but the rules of the game have changed, and energy policy is leading the charge. The question is not if the energy code will change, but how much and how fast. Soon, homeowners will reserve a portion of their remodeling budget for an energy audit and retrofits. That will put pressure on remodelers to find creative ways to deliver their clients wish lists with fewer resources.
It will also create a higher barrier to entry into the remodeling business itself. Right now, new-construction layoffs have created a glut of remodelers in most markets, but that will change with new rules for the way a remodeler’s performance is measured.
The game-changer in this case is the test-in/test-out procedure of energy audits. The initial energy audit will set the baseline performance of the structure and prescribe the necessary retrofits. And in some cases, an energy inspection may be required, just as an electrical or framing inspection is, before the walls are closed up.
But on top of that, a comparison of the structure’s baseline energy performance to the results of a follow-up or “test-out” energy audit will seal a remodeler’s fate. Either get it right the first time, or do it over on your own dime. With tighter margins, it won’t take too many failed exit audits to separate the wheat from the chaff.
The Cost Factor
Eventually, how we think about the cost of energy-related remodeling will change. Currently, the cost of energy retrofits is still measured against the expected occupancy of the current homeowner. In other words, if the average homeowner moves, say, every seven years, then the energy retrofit has to pay for itself within that time period.
This kind of payback calculation is not in play for most other building products. Those with a limited life, like roofing, may be graded for quality and longevity, but home buyers and sellers understand that the value of the roof is part of the overall value of the structure.
This is true of most discretionary products and materials as well. Nobody asks about payback on the jetted tub or exotic hardwood flooring. Soon, that will also be true of insulation, high-efficiency heating and cooling systems, renewable energy sources, and every other energy-related component. In a structure built to last 100 years or more, the importance of initial cost recedes because the value of these components, properly installed, transfers from owner to owner.
I don’t know exactly how all of this will play out, but one thing is for certain: change is happening and it’s happening now. We don’t have 17 years to assimilate.
It’s now or never.