Two years ago, a company in the state of Washington called Evans Glass marketed and sold their energy-efficient windows around the claim that such windows would realize a savings of anywhere from 30% to 75% on utility bills. Competitors promised similar, sometimes offering to cut buyers a check if the promised savings failed to materialize.
Evans Glass, a $30 million company when it was hit by a civil suit filed by the attorney general's office in Washington state in September of 2009, is now out of business. At least three of those competitors — also hit with suits by the AG's office charging deceptive marketing and sales practices in violation of the state's Consumer Protection Act — are either gone or in bankruptcy. In investigating local home improvement companies, the AG's office was quick to hone in on extravagant claims about energy savings and new windows. Its charge: that such advertising, or selling, is deceptive because those claims can't be proved. “In fact,” says the civil suit filed by the attorney general's office against Evans Glass, “there is no competent and reliable scientific evidence that substantiates these representations.”
Claims about the benefits of energy-efficient windows often originate with the manufacturers who make them. Since the Washington lawsuits were filed, a number of window manufacturers have withdrawn specific claims about energy savings. So have many of the home improvement companies that advertised and sold those products.
ONE PRODUCT VS. WHOLE HOUSE What you can or can't say about windows is well worth considering if you're selling an energy retrofit, that is, a project that combines various products and services, possibly including windows, to make the house function more efficiently. Like windows, the biggest reason people buy an energy retrofit is to reduce the amount of energy they use and thus save on some portion of their utility bills. “We turn on investment,” says Jim Harless, one of the owners of AAPCO, a home improvement company in Richmond, Va., that began offering energy retrofits two years ago through a separate company it created called eShield of Virginia. “That's the number one thing. We realize that the cost of power goes up consistently. So if we can show a 48- or 60-month return on investment, depending on the cost or type of project,” then consumers are inclined to buy, he says.
In its first full year of business, eShield of Virginia did $1.6 million selling air sealing, insulation (both attic and ‘drill and fill'), radiant barrier and other products and services at an average ticket of $4,800 to $5,200. Last year the company more than doubled that, bringing in $3.5 million in revenue from energy retrofits. Harless says eShield of Virginia generates leads at home shows, through word of mouth, or over the internet. “If you can go into someone's home and show them how they could save 15%, it's a no-brainer. People are paying attention to that.”
They are paying attention but they're also much in need of education on the subject. Typically homeowners understand that the home can be renovated to make it more energy efficient. But what exactly would be involved in doing that they're not sure. That's where selling comes in. Moreover the nature of the project can make for a tough sell. Windows are something homeowners can touch. And see. Insulation is all behind the walls or ceilings. And who sees air sealing? Homeowners, says Frank Mumford, owner of Sir Home Improvement, in Kalamazoo, Mich., a company that sells both energy-efficient windows and energy retrofits including air sealing and insulation, know little about how the house works or how an energy retrofit can save them money and make the place more comfortable. “It's difficult,” he says, “to show and build the value.”
Companies selling energy retrofits typically market a multi-product sale that might involve air sealing, insulation, a reflective barrier product that slows or halts heat transfer through the attic, or even an energy audit that, taken together are a substantially bigger ticket than any one of those individual components (the cost of an air sealing job, for instance, is usually about $2,500). But to make that sale, homeowners need to be shown that it's not one product or one service that will keep their house comfortable and reduce their fuel bills; it's the combination, designed to work in tandem. For instance, adding insulation to a house with air escaping through holes, cracks, fissures, and around the rim joist is of limited effectiveness. Seal those holes and openings and now the house becomes that much more efficient. But typically homeowners won't know how much insulation they need to have to meet local code standards or even what air sealing actually means, let alone how these work together and why they should pay to have both done at the same time.
LEGITIMATE CLAIMS VS. HOT AIR So it's important to be clear with prospects about what they're getting. Making claims for a 40% or 50% savings on energy bills may help you capture the sale on a first call. But it could also blow your credibility, and the sale, when you have no proof to back up those claims. At a time when information and opinions can easily go viral, claims like that could damage your reputation in the market. So stick to the facts.
Here's what's true. According to the Department of Energy (DOE), sealing holes, openings, and leaks in the building envelope, combined with adding insulation to attics, walls, and to the floors over crawlspaces, “can save up to 20% on heating and cooling costs ... .” (For details and a chart go to http://www.energystar.gov/index.cfm?c=home_sealing.hm_improvement_methodology.) That 20% reduction in costs (as a result of air sealing and insulating) is a figure the DOE bases on “corroborating modeled results with the field experience of professional home energy contractors.”
Let's say new, energy-efficient windows become part of your energy retrofit package. Adding new windows to the total job saves additional utility bill dollars, but nowhere near the 40% or 50% that some window replacement companies once routinely claimed.
