Ductless heat pump
A worker installs a ductless heat pump. Credit: Marcela Gara / Creative Commons

In his quest for a net-zero emissions house, Tim Leroux has already achieved gold status. But he’s not content to rest on those energy-efficiency laurels.

The Albemarle County homeowner is itching to reach platinum. And he believes a heat pump upgrade will eventually punch that ticket.

For guidance, the healthcare risk manager will turn to a free online calculator recently unveiled by Charlottesville-based Pearl Certification to help homeowners nationwide navigate the maze of tax credits and point-of-sale rebates for cleaner appliances covered by the 2022 Inflation Reduction Act. 

Pearl built its niche reputation awarding green seals of approval to customers such as Leroux seeking higher-performing homes.

Leroux, who says he is “evangelical about energy efficiency,” is bullish on the company’s offerings, which range from certifying contractors to training real estate agents.

It ties into Pearl’s dual mission of decarbonizing the nation’s housing stock and maximizing the return homeowners receive on their energy-efficient upgrades. The whole idea is to encourage people to take stock of the hidden — and thus often ignored — infrastructure that keeps their home ticking.

“It can be flat-out confusing for the uninitiated,” he said, adding that eligibility requirements and potential savings offered by the IRA adds another layer of complexity. “It’s hard to sell a solution for a problem people think they don’t have.”

The company’s origin

Residential energy use accounts for about 20% of this country’s greenhouse gas emissions.

That figure prompted Cynthia Adams to launch Pearl Certification in 2015. Adams, who grew up in Northern Virginia’s Prince William County, was no rookie to energy efficiency.

Adams entered the technical field in the late 1990s while leading a sustainable design/build company and then a green building consulting firm. In 2008, she had a hand in originating a climate action plan for the Charlottesville region.

Within two years, she had helped write the grant that funded what became the Local Energy Alliance Program (LEAP), where she began serving as executive director in 2010. The nonprofit provides energy efficiency and solar solutions for homes and businesses in the Charlottesville region and Northern Virginia.

Adams co-founded Pearl because she yearned to move the needle on residential energy efficiency as painlessly as possible. Her goal is for homeowners to earn points and advance their green ranking while plotting a strategic plan toward living in a healthier house with a lower carbon footprint, reduced utility bills and a higher appraisal value. 

“We’re very much a human organization, not a bunch of techies,” said Adams, now based in Durango, Colo. “And that personal touch is how we get a national movement going.

“That, and never tell a woman she can’t do something. It’s a surefire way to get her to do it.”

Seeking a stable model

Jennifer Amann, a senior fellow with the American Council for an Energy Efficient Economy’s buildings program, watched Pearl come into existence during her lengthy career in the industry.

“Cynthia and her co-founder, Robin LeBaron, were asking how they could create a steady demand for high quality, efficient services to improve buildings, address climate change and make homes healthier,” said Amann, based in Washington, D.C.

For the most part, energy efficiency updates at the residential level tend to lurch along unevenly, dependent on the vagaries of the U.S. Congress and how much money the federal government attached to assorted rebates and credits.

That “super, super challenging” up-and-down pattern led the two entrepreneurs to form a network of local, reliable contractors with high-level expertise revolving around appliances, insulation, drainage, heating and ventilating, and every other aspect of energy efficiency, Amann said. Pearl vets and accredits each contractor.

Contractors pay fees to belong to the network, which is how Pearl earns its money.

“That is not at all an unusual model,” Amann said. “It’s valuable for contractors to invest because they know they can get better leads and relationships, and return business. Customers benefit because they have access to somebody who can help them through a confusing process and not be stuck with just a guy and a truck.”

Home performance is a complex market, she said. Most homeowners don’t upgrade all at once and part of Pearl’s appeal is that homeowners can easily track their progress toward peak efficiency.  

Homeowners can contact their own contractors, use any number of free IRA calculators now available and do their own homework with their state energy office to cash in on credits and rebates, Amann noted.

“But there’s peace of mind in working with somebody who can walk through all the steps with you,” she said. “I mean, energy efficiency is my world and I don’t want to do all of that myself.” 

Virginia’s IRA rebate rollout set for 2025

IRA-related tax credits of up to 30% on the cost of electric vehicles, home energy audits, electric appliances, solar panels and other projects became available nationwide last year.

However, rebate programs remain stuck in the bureaucratic process because state energy offices are tasked with crafting and operating their own initiatives.

A few states might roll out programs later this year,  but Virginia won’t be among them. Bettina Bergöö, associate director of energy efficiency and financing at the Virginia Energy Department, confirmed that the state’s rebate program likely won’t debut until the first few months of 2025, at the earliest.

When available, the IRA-funded rebate programs will be split into two components. One, the home efficiency rebate, is based on measurable energy savings achieved so it does not specify any required retrofits or technologies. 

The other, the home electrification and appliance rebate, is technology specific. Upgrades that qualify include heat pumps for space heating and cooling, heat pump water heaters, heat pump clothes dryers, electric stoves, cooktops, ranges or ovens, electric wiring, and insulation, air sealing and ventilation.

Virginia has been allocated a total of $189 million to fund the rebates, according to Virginia Energy. That total is split about evenly between the two rebate programs.

The federal government has set eligibility parameters for the rebates, which states are allowed to expand or contract as they see fit. For instance, states could choose to set income limits to steer the benefits toward poorer households.

“These decisions are to be made by each state based on their respective needs and program objectives,” Bergöö said, adding that such a review is still underway in Virginia. 

Opening a green door

Pearl will be updating its calculator as Virginia and other states release their rebate parameters.

In the meantime, Leroux and other efficiency aficionados can tap into Green Door, an application Pearl invented in 2020 that offers customized, step-by-step plans toward reducing reliance on fossil fuels to power their homes.

It links users with Pearl’s contractors and allows them to earn points verifying the efficiency ranking of their home. An “asset” rating means a home has at least one high-performing feature. From there, enrollees can graduate to silver, gold and platinum levels.

“I liken it to airline or hotel loyalty points,” Leroux said about Green Door. “It tells you exactly where you’re at and what you need to do to reach the next level. I’m working toward platinum because I think it’s super cool.”

To vault from silver to gold over the last several years, he earned Pearl points for modernizing his lighting and switching to a tankless water heater and a more efficient refrigerator. He achieved “gold with solar” status last year after installing a 9.72-kilowatt rooftop array.

“A lot of this stuff is a little hard to get excited about because it isn’t as sexy” as his 27 solar panels, he said, adding that he gets an adrenaline boost when he plugs his data into the application and “I see the needle go way up.”

As intuitive as the online application is, Leroux recommends property owners reach out to a nonprofit weatherization organization or a contractor for an energy audit.

“After that, you can use Green Door to build out a plan,” Leroux said. “It lays out the incentives, connects you with contractors and shows you how you can get the biggest bang for your buck.”

Efficiency now part of sales pitch

Leroux, a retired U.S. Army officer, bought his Charlottesville area house in 2020, realized what a bargain he had escaped with when, post-purchase, he found paperwork confirming it was Pearl-certified with a silver rating.

“It wasn’t marketed that way,” Leroux said. “When I called a friend in real estate, he told me I should have paid $20,000 more than I did because of that certification.”

That friend was Greg Slater, a Charlottesville broker and Realtor. The two knew each other through LEAP. During Adams’ tenure there, Leroux had served as director of operations and Slater was on the nonprofit’s board of directors. 

Slater, in business for 27 years, schooled himself early on about the intricacies of energy efficiency improvements and how they can add value to a home’s sale price.

Now, as a member of the Pearl network, he pays for a certification report on each house he markets so he can pitch the benefits of energy efficiency to potential buyers. The reports that accompany home listings cover details of the building shell, heating and cooling, baseload electricity use and management of future upgrades.

“You don’t have to become a building-science expert, but you have to figure out a way to get comfortable with this information,” said Slater, who earned green credentials a decade ago from training via the National Association of Realtors. “The average realtor is intimidated and afraid to have that conversation.”

Buyers are savvy about sizing up curb appeal and the value of visible assets such as type of countertops and number of bedrooms and bathrooms, he emphasized.

“But they won’t pay for the features they’re not aware of,” he continued, “and that includes heat pumps, tankless water heaters, air sealing, solar and other upgrades they likely won’t notice or care about unless somebody takes the time to educate them.”

Pearl certification can add about 5% to the sale price of a Charlottesville-area house, Slater said. He pointed to a study completed in 2021 by an independent appraiser.

That premium is enticing to Leroux, though he has no immediate plans to put his home, built in 2012, on the market.

“For me, the real proof is when I go to sell this house,” he said.

Barring an emergency breakdown of his current heat pump, Leroux will track what type of replacement might be possible next year when Virginia publicizes its IRA-related rebate specifics. He suspects his income might be too high for him to qualify. 

If that’s the case, he will pursue a different route to update his mechanical system, and seek out other nips and tucks to fine tune his home.

“This house already produces more energy than it uses,” he said. “Once you’ve tackled everything on the Green Door roadmap, you start running out of updates. But I’m a believer in living a net-zero life.”

Elizabeth is a longtime energy and environment reporter who has worked for InsideClimate News, Energy Intelligence and Crain Communications. Her groundbreaking dispatches for InsideClimate News from Kalamazoo, Michigan, “The Dilbit Disaster: Inside the Biggest Oil Spill You Never Heard Of” won a Pulitzer Prize for National Reporting in 2013. Her book, "Outpedaling 'The Big C': My Healing Cycle Across America" is available from Bancroft Press. Based in Washington, D.C., Elizabeth covers the state of Virginia.