Opportunities for Contractors Who Build Green

Learn how to score points with consumers who want environmentally friendly features.

Home builders and contractors have a huge opportunity to tap a growing and potentially profitable market for green and energy efficient materials and products, according to a new survey by Icynene Inc. and the NAHB Research Center. They just need to take a more proactive approach to marketing green products consumers want most.

The survey of consumers expecting to buy a newly built home or to spend more than $10,000 on renovations in the coming year found nearly half are eager to incorporate green products into their homes, especially if they save them money. Even consumers who don't plan on investing in green or energy-efficient products say its mainly due to not being aware of their options.

Only 14 percent of consumers in the market for a newly built home or major renovations say their builder or contractor proactively told them about available green or energy efficient options and provided information about their benefits and cost advantages.
Of respondents not planning on adding green or energy efficient options to their home, 56 percent say it's because they were not aware of available green options and 23 percent say it's because their builder or contractor did not tell them about these options.

A key finding of the survey is that respondents do not consider the cost or efficacy of green building products an obstacle to their use. Only 14 percent of respondents believe green or energy efficient options cost too much and no respondents expressed concerns that green building materials are less effective than conventional materials.

Score Points With Clients

The survey found builders and contractors can play an influential role in promoting greener, more energy efficient building and can score points with potential clients by proactively discussing green and energy efficient products.

Respondents say that a builder or contractor is more likely to influence their decision to invest in energy efficient or green materials or products than friends, family members, the government, utility companies, the media or any other person or group.
Builders or contractors can win out over competitors by offering energy efficient products:- 55 percent of respondents say it would most definitely influence their choice of a builder or contractor if they offered energy efficient windows and doors; - 52 percent say it would most definitely influence their choice if a builder or contractor offered energy-saving appliances or lighting;- 51 percent say it would most definitely influence their choice if a builder or contractor offered insulation that delivered significant energy cost savings over conventional insulation.

"Builders shouldn't wait for consumers to coax them into exploring green options, since many consumers are not in a position to appreciate their potential benefits," says Craig Conner, building consultant and member of the Energy & Environmental Building Association. "Builders should first become familiar with a technology so they can explain it to a customer. By taking the lead they will enhance both the building process and their customer relationships."

Dispelling Myths

The survey dispels myths that consumers will not pay for green and energy efficient materials and products. Builders and contractors just need to sell their benefits in terms of ongoing cost-savings, protection of client investment and enhancement of home resale value.

Respondents say the ability to help a home be more durable/last longer is their single most important consideration in selecting building materials, followed by a material's ability to reduce home operating and maintenance costs.
Three quarters of respondents are willing to invest more than $1,000 in upgrades that will improve a home's resale value by $20 for each dollar invested; 39 percent are willing to invest more than $5,000 on upgrades that will improve a home's resale value by $20 for each dollar invested.
Nearly two thirds of those in the market for a newly-built home or major renovations are willing to invest $1,000 or more on upgrades that deliver monthly energy savings of up to 50 percent; nearly 20 percent are willing to invest more than $5,000.

Selling Savings

Builders and contractors can profit in knowing that those in the market for newly-built homes or renovations are equating cost savings with specific green and energy efficient materials and products. 85 percent of new homebuyers or those making renovations are considering energy efficient windows and doors, 73 percent are considering high performance insulation and 72 percent are considering Energy Star-rated products.

Healthy Investment

The survey suggests builders can also successfully market greener, more energy efficient materials and products by communicating their benefits for the overall health of a home. Nearly half of respondents say it would very likely influence their choice of a builder or contractor if they offered materials that resist mold or help minimize the potential for mold growth; 41 percent say it would very likely influence their choice of a builder or contractor if they offered materials that filter or clean air to improve indoor air quality.

"Builders can keep pace with consumer demand by building homes that meet all occupant needs, including good health, safety, durability, comfort and affordability," says Neil Moyer, Principal Research Engineer, Florida Solar Energy Center. "The most likely implications of not building this way include higher operating costs for homeowners, increased callback and liability costs to builders and more houses winding up in landfill."

Greener Strategy, Greener Bottom Line

The survey findings reveal that those investing in newly-built homes or renovations are receptive to greener, energy efficient messages. They also suggest at least three potentially profitable strategies builders and contractors can use to market green and energy efficient products and materials most effectively:

1. Don't wait for clients to ask about green options. The survey found those in the market for new homes or renovations are willing to pay more for green, energy efficient building materials and expect to hear about them from their builder or contractor. No where is this more clear than in attitudes towards insulation options:

More than half of respondents expect a builder or contractor to provide them with a range of insulation options including installation costs and potential savings over time.
Nearly a third expect a builder or contractor to use the most energy efficient insulation as standard practice regardless of the installed cost.
Only four percent of respondents expect a builder or contractor to use the lowest cost insulation, unless they say otherwise; and only three percent expect a builder or contractor to use the most well-known brand of insulation available in the marketplace.
More than nine out of 10 respondents say they would possibly or most definitely choose one builder over another if they offered an insulation that provided significant energy-cost savings over conventional insulation.

2. Demonstrate the savings.

The survey identified specific tools builders can use to encourage homeowners to invest more money in green and energy efficient upgrades.
55 percent of respondents say it will most definitely encourage them to invest more in energy efficient upgrades if a builder or contractor provides an energy guarantee. Builders can address this challenge by using products like the Icynene Insulation System, an expanding soft foam insulation. Icynene is a participant in Environments For Living, a program that offers homeowners a range of energy use guarantees.
47 percent say it will most definitely encourage them to spend more if a builder or contractor provides a dollar estimate of the savings from the upgrade.
42 percent of respondents say it will most definitely encourage them to spend more if a builder or contractor provides a formula to calculate or to show savings.

3. Help homebuyers see a link between green features and cost benefits.

While more than 80 percent of respondents say the desire to save money is the major factor in their decision to consider green building materials, builders can increase the marketability of green upgrades by showing how cost-savings, home durability and health benefits are often linked.
For example, a product like The Icynene Insulation System® creates a continuous air barrier that helps deliver energy-cost savings of up to 50 percent over conventional insulation, while sealing out outdoor air pollutants and minimizing the conditions in which mold will grow.
"One of the least understood areas of green building among builders and homebuyers is the potential for cost savings from products and techniques not directly related to energy efficiency," says Craig. "Builders can gain a competitive edge and avoid liability from building failures, by adopting and promoting a construction strategy encompassing air and moisture management, durability, a healthier indoor environment and energy efficiency."

The survey of 529 consumers in the U.S. and Canada was conducted in July 2004 by the NAHB Research Center on behalf of Icynene Inc, maker of The Icynene Insulation System. Respondents included those who intend to purchase a newly built home worth more than $400,000, those who have incomes of more than $75,000 and who intend to purchase a newly-built home worth less than $400,000 and those who plan on spending more than $10,000 on renovations in the coming year. The margin of error is approximately plus or minus four percent. Created 40 years ago as a subsidiary of the National Association of Home Builders (NAHB), the NAHB Research Center has established itself as the source for reliable, objective information and research on housing construction and development issues.