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Making Exceptions Makes Sense, Except When it Doesn’t 

Posted by Charley Cormany, EFCA Executive Director

One of the things that separates Efficiency First California from the large consulting firms that dominate utility support services is our understanding of contractors. Several members of our team have first-hand experience running contracting companies. We recognize that being a contractor isn’t easy, especially in today’s market. That’s why even though our rebate programs have specific participation rules, we have a built-in exception process. 

When I mentioned this at a recent conference about rebate programs, the audience didn’t quite believe it. Most rebate programs across the country enforce specific standards and criteria. If your project doesn’t meet the requirements, you don’t qualify for a rebate, period. It seems that the people who design programs like this haven’t spent much time working on actual buildings. Houses and buildings aren’t uniform, and problems can be incredibly difficult to predict upfront. Let me give you an example. 

I was once a project manager at a home performance company offering air sealing as part of a more extensive home energy efficiency upgrade. Air sealing prevents air leaks by sealing gaps in a building, working like a windbreaker over a wool sweater. The company guaranteed 20 percent reduced infiltration, which we measured using a large calibrated fan (a blower door) to pressurize and depressurize the home. Typically, getting a 20 percent reduction was pretty easy. Most older homes are not very tight. A bit of work with some gun foam and caulking can yield significant results. 

One day, I got a call from one of our crew leads, who was frustrated by a house he was working on. The crew did our standard process, but the results showed slight improvement. The house was pretty basic – one story, roughly 1,200 square feet. It should have been a slam dunk. 

When I arrived, we used an infrared camera to identify the source of the airflow. We were shocked to discover that most of the airflow came from the tongue and groove ceiling. The “prairie style” house had high perimeter windows, and the ceiling ran continuously from the interior, over the windows, to the roof’s edge. The design was aesthetically pleasing, but it leaked like a sieve. 

The project was sold with a guarantee of a 20 percent reduction. Three of us spent the better part of a day using clear caulk to seal every ceiling board that penetrated the house’s exterior. At the end of the day, we fired up our blower door, certain to be rewarded for our hard work. The result? We barely made a 10% improvement. 

The result dumbfounded us, but the bigger problem was that the rebate program required at least a 15 percent improvement in air sealing to qualify for a rebate. We could not afford to spend more crew hours on the project. The result? Per our guarantee, we paid the customer the rebate out of pocket. 

Sometimes, easy projects can be challenging, especially when the results are unexpected. 

Making Exceptions Makes Sense, Except When it Doesn’t 

Some programs and rating systems recognize the challenges of different buildings and unique circumstances. A couple of examples are the Home Energy Rating System (HERS) and the Building Performance Institute (BPI) protocols. These diagnostic protocols include an exception process— and that’s a good thing.

The problem is that contractors, being human, can take advantage of the process. For example, Building Performance Institute (BPI) testing protocols say that you can skip duct testing if the ducts have asbestos on them. The concern is that pressurizing the ducts may dislodge some of the asbestos and blow it into the home. Obviously, that’s a bad idea. 

The problem is that this exception was often used as an excuse to skip testing on older duct systems. Some contractors went so far as to add a tiny bit of asbestos tape on the ductwork to avoid the time-consuming process of testing the ducts. Needless to say, this is wrong on many levels. 

The challenge is that program administrators can’t inspect every project. For example, we administer several rebate programs; our typical verification rate is five percent of all projects. That means contractors can potentially get away with things for a long time before getting caught.

Recently, we have found several instances of HERS raters using two exceptions to skirt replacing or sealing ducts. California regulations require ductwork to be sealed to a specific level. New ducts must be sealed to leak 5 percent or less. The rule for existing duct systems was recently changed from 15 percent to 10 percent or less, which is harder to achieve.

HERS has an exception process, though. Ducts are allowed to leak more if there are inaccessible portions. It’s common to have sections of the duct system you can’t access without significant effort. An example would be ducts that run from the attic to the crawlspace in a closet. Ducts behind drywall are considered inaccessible, as the cost of sealing them is not practical. If the system has inaccessible ducts, a smoke test can be used to identify where they leak. This is a great solution, and it acknowledges that houses are complex and things don’t always fit nicely into program or compliance requirements.

Here’s the concern, though. As soon as the HERS program reduced the existing duct sealing requirement from 15 percent to 10 percent, the number of projects submitted to our programs with inaccessible ducts increased. I am not saying that HERS raters are being dishonest, but it is interesting that when the standards changed, we saw many more systems submitted to our program with inaccessible ducts. 

Does the difference between 15 percent and 10 percent really matter? Yes. How would you feel if five percent of the gas you put in your car leaked out of your tank before you could use it? Consumers are paying for the energy to heat or cool their homes. When your ducts leak, you are effectively throwing money out the window. How many power plants could we shut down if the ducts were actually sealed as intended? 

The targets are not a big deal for contractors that concentrate on quality. When I was a contractor, our crews were installing new systems that typically had less than three percent leakage. We routinely sealed existing systems to under eight percent. Unfortunately, high-quality duct systems are the exception. Lowest-cost pricing is somewhat to blame, as sealing the ducts requires labor, and labor adds expense to projects. 

Should rebate and compliance programs should include an exception process? An exception process acknowledges that some projects can be extremely challenging, and that’s good. But there must be follow-up on these exceptions to ensure they are real. For example, in our programs, claiming inaccessible ducts triggers a field inspection. If you ask for an exception, we will send someone to verify that it applies. 

Unfortunately, this solution is expensive and hard to scale. One possible solution is allowing contractors and HERS rating companies to claim a specific number of exceptions before field inspection is triggered. Or maybe the answer is to increase funding for enforcement when standards are changed. Perhaps there is a technology to help with the enforcement piece of the puzzle.

Whatever the solution is, we need to figure it out. As long as there are lots of different kinds of buildings out there, there will need to be reasonable exceptions to standards and criteria for rebate programs. Leaky ducts are a problem that is not going away soon. When exceptions become the rule, we have a problem. The losers are the homeowners and rebate programs that are not realizing the savings they have paid for. Efficiency improvements have multiple benefits, and abusing exceptions to allow sub-par work devalues these benefits.

We must reward contractors who play by the rules and do good work. Using exceptions to circumvent regulations is a serious issue. If I could persuade policymakers of one thing, it would be to step up funding for enforcement at the same rate as performance standards. It all comes back to a common philosophy: trust but verify, a practice we need to embrace fully.

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