This is the third of three posts about the two common business models in the field of energy audits of existing homes. The first one introduced the two models, contractor and consulting. The second one looked at the contractor model.

Again, there are two distinct points of view when looking at these models: the homeowner’s point of view, and the audit company’s. We’ll look at the consulting business model from the homeowner’s point of view first.

The audit company employing the consulting business model performs the home energy audit, but doesn’t itself perform any of the work which the audit recommends. In other words, the consultant can tell you what about the house is deficient, and how to improve it, and usually even write the specifications for the improvements, but the homeowner will need to find someone else to actually do the work. Actually, this fact is what is most attractive about the consulting model to some, and most unattractive to others. Some homeowners absolutely love the fact that the consultant isn’t trying to sell them anything (beyond the audit, that is). The homeowner is nearly guaranteed an objective, unbiased report. On the other hand, this makes it harder for the homeowner because he or she then has to go out and get bids for the work. Most consulting auditors provide a list of recommended contractors, insulators, and what-have-you, but still the homeowner must do their own due diligence in the bidding and selection process.

Some don’t mind at all. A consultant might be the obvious choice for homeowner who wants to do some or all of the work themselves, and most consultants are pretty good at helping the do-it-yourself’er. Another advantage with the consultant approach is that the improvements can be phased in over time. They don’t have to be done all at once. The homeowner can do a little bit now, a little bit later, and then finish it all up even later, and perhaps avoid financing the work in the process. In any case, the homeowner is almost certain to only have the work done that needs to be done.

The consultant’s audit can be more expensive than the contractor’s, but not always. This is because the consultant must make their profit on the only service they perform: the audit. A contractor, as mentioned in the second post, often does the audit as a loss leader and makes their profit in the improvements.

Additionally, the quality assurance performed by a consultant is usually performed on every job, not just a percentage of them. In other words, most consultants will come back and do a “test out” after the improvements have been made in order to ensure that the work done for the homeowner was up to snuff. (Sometimes there is an additional fee for this, sometimes not.) One thing to note: the quality assurance only works if the homeowner takes advantage of it. Many times, the homeowner simply doesn’t.

From the home energy auditing business point of view, this consultant model only usually works for an individual or a company if they are also a HERS rater and therefore do new construction as well. Being a Green Rater for LEED for Homes also helps. In the Midwest, anyway, there usually isn’t enough business to focus on doing audits on existing homes only. The consultant almost certainly will need to diversify into new construction. The only exception to this might be in those states where there are additional state or federal incentives that either generate more business for the consultant, or add profit to each job (for example, via a payment for each home completed). One big advantage for the consultant in all this is that their own overhead can be extremely low. The majority of consultants run their businesses out of their homes. Once the equipment is purchased, usually the biggest operating expenses are for insurance and perhaps for on-going training.

As before, the key for the homeowner or the potential home energy auditing business is to weigh the pro’s and con’s of each model, and then decide which one is right for them. I hope these brief posts have helped in that endeavor.