Defuse payback with ECV, Yates tells QSC

CHARLOTTE, N.C.  — When contractors try to sell energy-saving and water-saving equipment, so often customers can’t get past the sticker shock or they’re only looking for a quick payback. The way to sell equipment that goes way beyond the code minimum is to use Energy Conservation Value, Dave Yates told attendees at the Quality Service Contractors Power Meeting XXXVI here in March.  

CHARLOTTE, N.C.  — When contractors try to sell energy-saving and water-saving equipment, so often customers can’t get past the sticker shock or they’re only looking for a quick payback. The way to sell equipment that goes way beyond the code minimum is to use Energy Conservation Value, Dave Yates told attendees at the Quality Service Contractors Power Meeting XXXVI here in March.

Yates, owner of F.W. Behler Inc., York, Pa., and a CONTRACTOR columnist, developed Energy Conservation Value, or ECV, as a methodology to show homeowners that buying the code minimum will cost them money in the long run. If equipment lasts 20 years, in some cases it might cost them a lot of money. Buying better equipment will also increase the value of their real estate.

The contractor has to define the parameters for the operating savings in terms of fuel cost, operating hours and the efficiency of the equipment. A contractor can’t promise a homeowner specific savings for his house, because there are too many variables such as weather and human behavior.

“Your projections are based on etched in stone factors that you choose,” Yates said.

Yates noted that contractors have some external factors working in their favor — since the economy and the housing market tanked, people aren’t moving so they are improving their homes.

ECV, Yates explained to the QSC contractors, only focuses on the cost difference between code minimum equipment and high-efficiency units. Fuel cost savings and historical fuel price increases are only calculated against the price difference, not the total cost of the equipment.

The first step is to perform a Manual J calculation for boilers or HVAC equipment.

“Size matters, Yates said. “99.99% of equipment is oversized.”

He advised the contractors to be energy advisors and to offer best-better-good options. Never assume that anything is too expensive for the consumer because it’s their money, not yours. He also told the crowd to never denigrate a competitor. The competitor’s equipment, however, is fair game, especially if you know that it’s troublesome or being misapplied. If the customer is getting other bids, he always wants to be the last one in.

Historic fuel price increases are a key part to the ECV calculations. Between 2000 and 2010, fuel oil has increased by 11% per year, propane by 9.4% a year, natural gas by 3.7% and electricity by 3.5%.

The stability in electricity prices combined with enormous gains in heat pump efficiency has created a paradigm shift that homeowners and many contractors have not caught up with. A heat pump, especially one of the new ones with SEERs soaring into the 20s and COPs near 4.0, is now the most economical way to heat.

Conversely, oil and propane are in trouble because of their price increases.

Yates gave the contractors ECV examples for both a boiler conversion and a plumbing system conversion over to WaterSense fixtures and fittings.

For the plumbing example, a family of four using 3.5-gpf. toilets installs two 1.28-gpf. HETs, reducing water usage by 21,134-gal. per year. Using the water and sewer rates from York, Pa., that family would save $274.74 a year on water and $169.07 on sewer charges. If water rates increase by a typical 5% per year, the family would save $14,671.69 over 20 years, making the investment in those toilets look pretty cheap.

If that same family bought all WaterSense faucets, fixtures and fittings, they could cut water use by 42,000-gal. per year. Moreover, part of a WaterSense makeover is fixing all the leaks. In addition, using WaterSense showerheads will use less hot water, reducing the gas bill by $244.72 per year. In this case, the 20-year savings would be more than $39,000.

On the HVAC side, Yates told the contractors about a 5,000-sq.ft. 1930s house that he converted to a modulating condensing boiler. It started life as a coal-fired steam system, then oil and then natural gas in 1982. Air conditioning was added in 1995. The house had 23 radiators and one thermostat. He looked at the homeowner’s gas and electric bills, the building envelope, windows and amount of infiltration.

The house was using 7,800 CCF of gas per year at a cost of $3,900. Yates installed a 180,000 Btuh modulating condensing boiler, reused the old steam radiators, added some radiant floor heat, put in more thermostats and used night setback. Much of the air infiltration was plugged up. That cut gas use down to 4,400 CCF of gas per year for a savings of $2,550 per year. Envelope upgrades took gas usage down to 2,400 CCF per year. Gas usage was cut by 69%, comfort was improved, and the boiler provides continuous hot water for showers.

Those kinds of savings plus the improved comfort make the investment an easy sell to the homeowner.

 

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