July 21st, 2022
Energy Star 7.0: Where Will the Dust Settle?
During the last few weeks, I have visited customers, and the topic of Energy Star has come up. Everyone wonders if the EPA will stick with the stringent requirements outlined in drafts 1 and 2 of Version 7.0 or move to some halfway point. This would give window and door fabricators extra time to adjust as they plot a course toward meeting the stringent U-Value requirements, especially those for the northern zone. After reading the update this week posted by Drew Vass, EPA Releases Final Draft for Energy Star 7.0 and talking to others in the industry, it sure looks like this “slightly revised” version of Energy Star 7.0 is going to be a done deal with implementation required by September of 2023. How will the fenestration industry react?
Well, I think it may be analogous to packs of dogs. I can see a scenario where three distinct packs of dogs emerge among window and door companies.
1. The Purebreds. They will do whatever they must to achieve total compliance with Energy Star, pulling out all the stops. They may have already made the move to more energy efficient, optimized frame designs, which include wider pocket dimensions, more air pockets and foam. The wider pocket dimensions will facilitate the use of triple pane IG configurations. They may also use surface 4 coatings on their double-pane windows where necessary to squeak by. Every product they make will meet Energy Star no matter what it takes. These more expensive components and design concepts will also mean that Purebreds will be priced at the higher end of the market. One issue here is that they may run into issues with excessive wintertime condensation on the inside panes of glass caused by the use of Surface 4, low-E coatings. This phenomenon may disillusion consumers because they paid for a more premium window, yet they see their windows sweating, allowing mold formation around window frames. Purebreds may see their market size shrink since they will strictly cater to the higher end of the market. This may be especially the case if inflation and higher interest rates prevail.
2. The Mixed Breeds. These companies will conform to the new requirements wherever it makes sense, but they will offer a mixed bag of products. They will offer a higher-end window line that meets Energy Star, perhaps with a more energy-efficient frame design, triple pane /low-E glass package, non-metal spacers, and argon or even krypton gas (if its price stabilizes). However, the Mixed Breeds will also offer a budget window line offering a decent, albeit not an optimized frame, featuring double pane, low-E glass, and argon. They will try to cater to both ends of the market, with higher-end products that can compete with the Conformers and lower-end products for consumers who want to fill an opening with a decent level of thermal performance and do not care about Energy Star. The mixed breeds will become the majority.
3. The Wolves. These companies will abandon Energy Star altogether and sell against it. They will refuse to upgrade their window designs to meet the new stringent requirements. They may feel that the EPA is out of touch with reality and is making the window industry jump through hoops with little benefit to the consumer. They will show their fangs and fight back. Wolves will train their salespeople to sell against Energy Star. Sales tactics will focus upon the extremely long payback period of Energy Star windows, given the added cost of producing windows with such low U-Values, which may not save enough energy to justify the added cost. They will be out to convince the consumer that an Energy Star window is not worth it. I can even see them talking about government overreach and how the whole Energy Star program focuses on a single indicator of window performance when there is so much more. Instead, Wolves will focus on everything else their windows can offer. They will talk about insulating glass durability, extended warranties, superior service, condensation resistance, ease of maintenance, vision area, superior hardware, sound reduction, security and creature comforts. This is everything else a window or door can do for the consumer, with a fairly good level of thermal performance which they will deem as “good enough.” Indeed, this marketing approach may very well dim Energy Star’s significance in the consumer’s eyes. The danger is that we will go from the current scenario where 95% of the window industry is united in promoting Energy Star to a divided one where a good portion of window and door fabricators are selling against it. The danger is that the Energy Star program, conceived initially with such good intentions, may very well lose credibility in the eyes of the consumer. Indeed, interesting times lie ahead!