Taking Propane to the House

Time to con­nect with the res­i­den­tial con­struc­tion industry

Ignor­ing your res­i­den­tial propane busi­ness and pre­tend­ing it will get bet­ter some day 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 customer’s eyes) like tank rent and deliv­ery fees to make up for short gal­lon 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 dif­fer­ent fronts includ­ing con­sumer con­ser­va­tion due in part to a weak econ­omy, energy switch­ing (to elec­tric­ity, renew­ables), adop­tion of stricter build­ing codes, higher effi­ciency heat­ing equip­ment and appli­ances, a weak home build­ing 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 30%+ more strin­gent than even 2006 codes and a new fed­eral reg­u­la­tion that will man­date high effi­ciency fur­naces and heat pumps in all US mixed and cold cli­mates will bring impli­ca­tions for propane that 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 in the home
• 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 (air-source, ground source, mini-split), in both new and exist­ing applications

Add to these chal­lenges the fact that the aver­age home with propane as a pri­mary energy source is already down to less than 2 propane appli­ca­tions of the 5 indoor appli­ca­tions avail­able.  Over half of those homes have an elec­tric water heater.

This long list of chal­lenges sum­ma­rizes the need to re-energize your rela­tion­ship with con­struc­tion pro­fes­sion­als.  This means devel­op­ing or strength­en­ing rela­tion­ships with builders, remod­el­ers, heat­ing & 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. This is doc­u­mented by the NAHB/First Amer­i­can Improv­ing Hous­ing Index pub­lished monthly by the National Asso­ci­a­tion of Home Builders (NAHB) and other sources.

There is no bet­ter time to let con­struc­tion pro­fes­sion­als know all the rea­sons why 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 great 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 Home Builders 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 by attend­ing the NAHB Inter­na­tional Builders Show in Orlando, FL on Feb­ru­ary 8–11, 2012.  Con­tact Aisha Parker at the PERC office and sign up to spend some time in the gas indus­tries booth that 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 approx­i­mately 70% 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…..unless you are just in it for the short term.

 

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