Contractors Still In The Cold
Bob Olsen doesn’t want to give in.
He’s been in the insulation and energy efficiency business since 1981 and his business, Bruin Corp. in Ashland, is off 65 percent this year — in the height of the insulation season.
He knows exactly what’s holding his business back, but he doesn’t want to give into what he calls a monopolized system the state has created for his industry.
Last year, the state dramatically changed the way the energy efficiency industry is run. With a massive new multimillion advertising blitz, homeowners are now able to save up to 75 percent off the cost of making their homes more energy efficient thanks to the MassSave program.
Thousands of Bay State residents have taken advantage of the programs and dozens of local contractors are doing the installation work.
But for some contractors, like Olsen and others in Central Massachusetts, there are still kinks to be worked out.
And the issues that remain are leaving his business out in the cold.
Taking The Lead
In order for customers to qualify for the 75-percent savings on energy efficiency work, the work must first be inspected by utility companies to ensure that the job is actually needed. There’s a $2,000 cap on the savings amount.
The utility companies have hired lead vendors, which, for the Central Massachusetts region’s utility providers — National Grid and NStar — is West-borough-based Conservation Services Group (CSG).
Typically, a homeowner looking to make a home more energy efficient will be referred to CSG. CSG will send an auditor out to the home to determine what type of work will be done.
CSG will then either assign one of its pre-approved contractors to do the installation work, or give the homeowner a list of contractors who could provide the work for them.
The problem is that people like Olsen don’t want to work with CSG and the lead vendors. But if they don’t work with CSG, they don’t get access to the thousands of customers using MassSave.
For Olsen’s customers to qualify for the 75-percent rebate from the state, they need to process the work through the MassSave program and the lead vendor.
Olsen’s business is off by more than half of what it has been in previous years because he’s not working in the MassSave program.
State officials have taken notice. Improvements have been made to the system, but more are needed, said Frank Gorke, the state’s assistant secretary for energy efficiency.
“We’re still not seeing fast enough movement in providing a pathway for independent contractors to get work,” he said.
Still, he said, it is a balance between protecting taxpayer dollars, which in part are helping to fund the program, and making sure credible businesses are doing the energy efficiency work.
“We’re trying to be as inclusive as possible while at the same time trying to reach as many customers are possible,” he said.
Jerry Hanna, principal analyst and manager of National Grid’s MassSave program, said the utility and its lead contractors have made the system more inclusive since it launched last year. CSG has doubled the number of contractors it is working with in the last six months from about 30 to 60, he said.
CSG officials declined to comment for this story.
Plus, Hanna said, other reforms have been put into place.
Finding Compromise
Most notably, contractors can now do energy audits themselves, instead of having a CSG representative do them. Gorke said this gives contractors an opportunity to do a job “soup to nuts,” from the customer recruitment to energy audit, to installation work.
The problem, according to Tom Regh, owner of Progressive Energy Services in Sterling, is that CSG, the lead vendor, is still hanging over the entire process.
After Regh does an energy audit, a CSG representative still has to come to the home and confirm that the work the contractor has outlined is actually needed.
That process, according to Regh and Olsen, can take weeks or even more than a month.
“We’re frustrated, too,” Gorke admitted about the timing of the energy audits. “Everyone needs to pick up the pace.”
Winter and fall, however, are the peak times for energy installation work to be done, so everyone is busy this time of year, which creates backups.
The other criticism from some contractors is that the lead vendor, CSG in this case, is taking a cut of the cost of the project.
Gorke said there are necessary costs related to running the program. He added that the state has not received any complaints of lead vendors taking an unfair cut on the jobs and urged any contractors that feel that way to report it to the state.
“There is an administrative cost to maintain the quality of the work that is being done,” he said.
There may be hope on the way for disgruntled contractors.
National Grid and NStar are both going through the process of selecting a new lead vendor. Requests for proposals have been issued and companies are bidding on the contracts now.
Hanna, with National Grid, said he expects to have new lead vendor contract in place by April. He would not disclose whether CSG has reapplied for the contract, saying that he cannot comment on ongoing contract negotiations.
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