Revived by Retrofits

By John Burgess

THE PRESS DEMOCRAT

Published: Sunday, November 29, 2009 at 4:03 a.m.

In wake of real estate collapse, builders see some signs of growth thanks to homeowners' growing interest in energy efficiency

To the naked eye, Tanya Narath's northwest Santa Rosa home seems the picture of energy efficiency.

Meeting County Climate Goals

Sonoma County homeowners will need to spend an estimated $1.5 billion over the next five years to meet the county's carbon reduction goal, which is to reduce overall greenhouse gas emissions to 25 percent below 1990 levels by 2015.

Assuming 80 percent participation, about 150,000 homes and 20,000 commercial buildings would need to be retrofitted. To reach the goal of 150,000 homes, it would take retrofitting 82 homes a day, seven days a week for the next five years.

It's got solar panels on the roof, double-paned windows throughout, newer appliances and solar tubes drawing in natural light.

But when home performance expert Mike Fitzpatrick recently conducted an energy efficiency test on the 18-year-old home, he made a troubling but all-too-common discovery -- the 1,500-square-foot structure leaked like a sieve.

When Fitzpatrick, a project manager with Pinnacle Homes, used a powerful doorway fan to create a vacuum inside the home, the chilly morning air rushed through poorly insulated areas in walls, light fixtures and appliances throughout the home.

The solar tubes in the ceiling, which Narath and her husband Tim Sweeney had installed to reduce their energy bills, turned out to be black holes, literally. On Fitzpatrick's thermal imaging camera, the tubes appeared surrounded by ominous black rings indicating cold around was pouring through them.

"It's horrifying, isn't it?" said Narath of the images. "I guess this is why it feels like the house loses heat so fast."

But Narath's problem is an opportunity for the county's battered construction industry.

Construction companies, pummeled by the collapse of the housing market, are seeing modest but important signs of growth thanks to increasing interest in energy efficiency programs.

Just like drivers are flocking to hybrids, homeowners are more willing than ever to pay for home efficiency upgrades, spurred by novel government incentives and increasing concerns about greenhouse gas emissions.

"We're really thinking about our carbon footprint and how we can get it as close to zero as possible," Narath said.

In pursuit of that goal, Narath has hired Pinnacle Homes to manage a home energy retrofit that will replace her aging furnace, install new duct work, seal up those drafts, and blow in a new layer of attic insulation, among other things.

When completed, the $41,000 in upgrades should slash Narath's gas bills by 75 percent, make the house more comfortable, and improve its resale value, said Craig Lawson, president of Pinnacle Homes.

The project is just one example of how the Sonoma County building industry is transforming itself to take advantage of the potentially massive new market created by the push to improve the efficiency of the county's 230,000 buildings.

Since housing construction has ground to a virtual standstill, builders are reinventing themselves, focusing instead on rebuilding existing ones to make them as efficient as possible.

Shifting Gears

Companies like Pinnacle Homes, which since 1993 built dozens of high-end houses in exclusive neighborhoods like Santa Rosa's Skyfarm, were forced to shift gears in 2006, when the market started to collapse.

As it scaled back operations, the company shrank from 25 employees to just seven earlier this year. As Lawson and Vice-President Dick Dowd used the down time to take a closer look at green building techniques and certifications, they realized just how big an economic opportunity the energy retrofit market represented.

"This is a pool a lot deeper than people think," Lawson said."

They've since hired an additional five people and now see "home performance" as a permanent division of the company.

Sonoma County homeowners will need to spend an estimated $1.5 billion over the next five years to button up their homes enough to meet the county's carbon reduction goals, according to the county's Community Climate Action Plan.

That goal is to reduce overall greenhouse gas emissions in the county to 25 percent below 1990 levels by 2015, five years earlier than the state's goal of 2020. Since buildings generate an estimated 40 percent of the county's greenhouse gas emissions, improving their efficiency is vital if the county has any chance of meeting its goal.

Assuming 80 percent participation, the plan estimates 150,000 homes and 20,000 commercial buildings would need to be retrofitted to reduce overall building emissions by 30 percent.

That's a tall order, admits David Brennan, the county's regional climate protection coordinator. It would take retrofitting 82 homes a day, seven days a week for the next five years to reach 150,000 homes.

Given the relatively few contractors certified to perform the kinds of performance testing required to ensure projects achieve their energy efficiency goals, Brennan says it is "questionable" whether that goal can be achieved.

But the county's Energy Independence Program is making great strides toward building that capacity through market incentives. The program allows people to borrow money from the county for energy-efficiency improvements and pay it back in installments on their property tax bills.

"We're trying to build the capacity of the building retrofit business to become a significant part of the construction industry," Brennan said.

Popular Program

Since April, the program has approved $17 million in projects, and received applications totaling $39 million. Participants repay the loans over five to 20 years at about 7 percent interest. If the property is sold, the new owner is responsible for the payments.

The loans are for a minimum of $2,500. Both homeowners and commercial property owners throughout the county can take advantage of the program.

While construction jobs in the county remain down about 13 percent from the same time last year, the Energy Independence Program appears to be generating work in the construction industry, according to program officials.

About 800 construction jobs, an 8.4 percent increase, have been created in the county since January, according to the state Employment Development Department. By comparison, Napa continued to lose construction jobs and Solano County added just 1.3 percent.

While some of that growth may be attributable to seasonal factors, a close look shows strong job growth in the summer months, when the program approved the bulk of its funds, according to program spokeswoman Amy Bolten.

"There's a strong correlation between the contracted amounts and job growth," Bolten said.

Business is booming for Harry Adams, president of Western Pacific Solar in Santa Rosa, which just installed a large solar array at the David Coffaro Winery in Healdsburg.

Adams is another former homebuilder turned green contractor. He learned how to install solar panels on homes several years ago to make them more attractive to consumers, but was forced to rethink his business when the market tanked.

"Most of the builders around here have lost everything," Adams said.

Now the problem is too many builders, contractors, plumbers and others trying to "go green" by getting into the solar installation field, Adams said.

"They think, 'I have a pick-up and a gun rack and dog and boom box, I can be a solar contractor,” Adams said.

Still Not Enough?

The more the better, as far as Hallie Fraser's concerned.

"If it means 10 more contractors that have work, I say 'Hallelujah,' " said Fraser, the green building coordinator at the North Coast Builders Exchange.

About 160 contractors have taken green building classes held in the area in recent months. But that may not be enough to get the county to its goal of retrofitting 80 percent of the county's homes. Far more contractors -- and money -- will be needed for that, said John Haig, the county's energy and sustainability manager.

"We're nowhere near being able to do 200 homes a day with our current contractor pool," he said.

But every step toward that goal puts people back to work, creating a ripple that helps boost the economy, said Robert Eyler, director of the Center for Regional Economic Analysis at Sonoma State University.

"This program is exactly what we need to see in a sustained recovery," he said.

You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com.