Time to connect with residential construction

January 6, 2012 By    

Ignoring your residential propane business and pretending it will get better without your help is no longer an option, unless you are only in your business for the short term.

Charging higher margins and other onerous penalties (in your customers’ eyes) like tank rent and delivery fees to make up for short gallons throughput per customer will only carry you so far before you run out of excuses for your banker or your board of directors.

Let’s look at some other reasons why your residential customers are not using as much propane as you want them to use. The residential propane business has been under downward pressure from several fronts, including consumer conservation due in part to a weak economy; energy switching; adoption of stricter building codes; higher efficiency heating equipment and appliances; a weak homebuilding market; and a distinct communications gap between propane marketers and construction professionals.

The future is not going to get any easier as both energy codes and heating system efficiency standards undergo historic changes in 2012-13. The spreading adoption of energy codes, which are more than 30 percent more stringent than even 2006 codes, and a new federal regulation that will mandate high efficiency furnaces and heat pumps in all U.S. mixed and cold climates will bring implications for propane. These include:

■ Smaller capacity heating systems
■ Lower propane consumption rates for heating due to equipment efficiency and envelope improvements
■ Increased importance of water heaters as an anchor application
■ Increased importance of smaller propane applications in the home
■ Opportunities to gain market from heating oil furnaces, which also face efficiency hikes
■ Increased challenges from electric heat pump systems, in both new and existing applications

Add to these challenges the fact that the average home with propane as a primary energy source is down to fewer than two indoor propane applications of five available. More than half of those homes have an electric water heater.

These challenges summarize the need to re-energize your relationship with construction professionals. This means developing or strengthening relationships with builders, remodelers, heating and cooling contractors, and plumbers serving your propane market. While it may be several more years before the housing market and the economy return to normal levels, construction activity has started to come back in pockets across the country.

There is no better time to let construction professionals know all of the reasons propane should be their preferred energy choice when building, remodeling or performing efficiency upgrades for their clients.

The Propane Education & Research Council (PERC) has provided propane marketers with a variety of marketing materials and tools geared toward the building community. There are research reports, training courses, fact sheets and more that can provide energy answers for you and the construction professionals with whom you work. Join and become active in your local homebuilders association, and make sure your state or regional propane association is doing its part in closing the communication gap with the construction community.

A good place to get the big picture is the NAHB International Builders’ Show on Feb. 8-11 in Orlando, Fla. Contact Aisha Parker at the PERC office and sign up to spend some time in the gas industries booth, which the propane industry shares with the American Gas Association and gas products manufacturer partners.

Expect PERC to put a big push on taking propane to the house in 2012 to foster direct engagement between you and your construction professional clients. With about 70 percent of all retail propane sales being used in building structures, you could say that you are not in the propane business – you are in the building business. It is time to pay more attention to it.

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