Every home services contractor would love to have a magic crystal ball that lets them peek into the future. Unfortunately, the best we can offer you are educated guesses… plus, a little data and statistics to back up our claims!
If you’re an insulation, home performance, HVAC, or solar contractor looking for clues about what summer 2023 will be like for your contracting business, here are five of Energy Circle’s best takes:
1. Energy Prices Will Still Be High (But They’ll No Longer Be Skyrocketing)
According to the U.S. Energy Information Administration (EIA), last year marked incredible growth in residential electricity prices, which rose nearly 11% from 2021. Prices are expected to continue to rise this year, but not by anywhere near as much—about 3.5%—and are then forecasted to be just about flat in 2024.
Contractors haven’t really had to lean into messaging around energy savings since the early 2010s and the aftermath of the Great Recession. But with prices still at significant highs, hammering home the financial benefits of your services is a smart approach.
2. Summer Will Likely Be Hot (Talkin’ About the Weather, Part 1)
You talk about the weather when you’ve run out of other things to say, right? Well, in the better building industry, weather is unavoidable, so let’s get our two weather-related predictions out of the way early.
First up are temperatures. Six out of ten of the hottest years on record in the US have occurred in the last 10 years, and according to the National Weather Service, June, July, and August are expected to be hotter than normal for the vast majority of the country this year. Of particular note are the Southwest and the East Coast.
Summer is usually the time of year when contractors are busiest—if the data above is proven accurate, this year will be no exception. Don’t say we didn’t warn you!
3. Wildfire Relief? (Talkin’ About the Weather, Part 2)
Wildfire smoke has been a significant driver for indoor air quality demand in recent years, particularly on the West Coast (check out the significant spikes for “indoor air quality” searches on Google Trends in the last 5 years and notice how many of them line up with wildfire events). The National Interagency Fire Center issues a monthly Significant Wildland Fire Potential Outlook, but the farthest out we can currently look is June. Based on that info, it looks like the West Coast will be getting a breather, at least for this summer.
Of course, wildfire season doesn’t generally start in earnest until the fall. So while it doesn’t seem like customers will be breaking down your door for IAQ solutions this summer, it would be smart to make sure your website has plenty of high-quality content related to air quality services, leaving you prepared for the next bad wildfire season… whenever that might be.
4. Summer 2023: Big HPE (Heat Pump Energy)
Based on the last 5 years of Google Trends data, “heat pump” and “mini split” related searches continue to rise.
Searches for mini splits have been particularly seasonal, with big spikes in the summer, indicating that many homeowners, especially those in colder climates, are still thinking about mini splits mostly in terms of cooling.
And those searches are already translating into sales. For the first time, heat pumps outsold gas furnaces in 2022 sales, according to a recent New York Times article about heat pumps (one of many recent national news stories talking about heat pump growth—here’s another one on the popularity of heat pumps in our own state of Maine, from the Washington Post).
All signs point to a big summer for heat pump sales, and in many markets around the country, there is still time for contractors to gain first-mover advantages in their service areas.
5. We’ll Still Be Waiting on IRA Rebates 😡
The most significant recent development in our industry is the Inflation Reduction Act. But unfortunately, the IRA incentives getting the most publicity—two new rebate programs—are not available yet, and likely won’t be until late 2023 or 2024 at the earliest in many states.
This means that in the coming warm months, contractors will still be leaning hard on the new IRA 30% tax credit (which is available now). We’ve been using the above timeline graphic in recent webinars as we talk about visualizing what a contractor’s year-long Inflation Reduction Act campaign could look like. Our hope is that at some point this summer, states will start to announce more details and specifics about when rebate programs will go live, and contractors can start planning for the fall and winter.
For tips on how contractors should be thinking about the rollout of IRA rebates and incentives, check out our recent webinar: “Hurry Up and Wait: Managing Long-Term Inflation Reduction Act Rollouts.”