Energy Efficiency Contractors Left Out In The Cold
For the last seven years Ellen and Bob Levesque, owners of Bob’s Insulation in Sutton, have had steady work doing weatherization, insulation and energy efficiency improvements to homes in Central Massachusetts.
But since February, work has slowed for the Levesques and dozens of other independent contractors around the state. The decline in business is not a function of a struggling economy. Many contractors blame a slow down on changes that were recently made to the way the state processes rebates for energy efficiency work.
As part of the 2008 Green Communities Act, utility companies were required to provide incentives for residents to complete energy efficiency upgrades on their homes. To implement that mandate, the utility companies chose to hire lead vendors to manage all of the energy efficiency jobs and divvy up the work to contractors.
But independent contractors, like Levesque, say they are being left out in the cold.
“It’s just plain unfair,” she said. “Ratepayer dollars are being used to pay for the monopolization of the industry.”
New System
Before February, if a homeowner in Central Massachusetts wanted to make energy efficiency improvements, they would call a company like Bob’s Insulation, or one of the hundreds of others in the state. The company would usually come to the home, do an energy audit, identify fixes, complete the work then apply for a rebate from one of the state’s publicly owned utility companies.
Utility companies now work with a lead vendor, which for National Grid and NStar in Central Massachusetts, is Conservation Services Group of Westborough.
CSG will send a worker to conduct an energy audit, then will assign the insulation work to a subcontractor that has been trained and certified by CSG. Homeowners in some areas are then eligible to receive 75 percent off the cost of the job, up to $2,000. The program is funded by a surcharge on all utility bills.
But for Levesque and the dozens of other independent contractors that are not subcontractors of CSG, the new process is eating up all the work they used to have.
“CSG is spoon-feeding work to their hand-picked subcontractors,” said Paul Johnson a Gloucester contractor who has founded a new trade group for independent contractors that are feeling the pinch. “Unless you’re in the club, you’re not getting any work.”
CSG officials said they are attempting to work with as many subcontractors as possible to have an inclusionary system that ensures high-quality work.
Samuel Nutter, New England business development director for CSG, said the changes have created a “hiccup or a blip” in the way rebates programs are processed. Many contractors, he said, are still having trouble adapting to the new system.
“Ultimately, it’s ratepayer money that’s paying for these rebates and so the goal has to be to protect the consumer,” Nutter said. “No one wants any of these guys to get hurt, it’s just that there are a lot of competing interests here and consumer protection has to rise above a steady workflow.”
CSG offers “boot camp” training sessions for companies to become certified subcontractors for CSG, he said. The company has already trained more than 500 workers from 170 companies.
The state is keeping close tabs on the issue and officials said there are some kinks that need to be worked out.
Frank Gorke, director of the state Division of Energy Efficiency, said an Energy Efficiency Advisory Council oversees the programs and is working to alleviate the concerns of the independent contractors.
“There are a lot of tensions out there and we haven’t quite struck the right balance yet, but we’re working on it,” he said.
According to Gorke, the state is in a “transition period” to get to a system that will ensure quality control of the work being done.
Levesque of Bob’s Insulation said negotiations with the state are ongoing to institute a test program that would give customers the option between using a lead vendor or using an independent contractor for energy efficiency projects. The test program must still be finalized, but Levesque said she’s happy to see some discussions between the two sides.
But until changes are made, some contractors are still in a bind. Dave Cocaine of Custom Insulation Co. Inc. in Worcester said his work has slowed down significantly since the changes went into effect.
Cocaine has been sending his crews to the CSG “boot camps” for training, which include two, two-day training sessions and a field test, but he still hasn’t been getting calls for jobs from CSG.
“CSG is suppose to be running the program and distributing the work, but it seems to me they’re just running it and taking the work or giving it to a handful of guys,” he said.
For other contractors, however, the changes have been positive.
Al Pellegrini, owner of Advanced Energy Services LLC in Hopedale, said having CSG handle the energy audits, process customer requests and manage the rebates has created efficiencies in his business.
“In the last year we’ve grown 400 percent and we’ve added a whole new work crew,” he said.
“And I’m not spending a penny on advertising.”
Meanwhile, utility companies NStar and National Grid, which employ CSG as their lead vendor for the new statewide Mass Save energy efficiency program, issued a joint statement saying that the debate is a “misunderstanding” and defended the program as being “completely inclusionary.”
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