Trending
April 25, 2024
Today, market is filled with companies who have new ideas and are passionate about their vision. One such company is Pearl Certification, Co-Founders Cynthia Adams and Robin LeBaron were both led non-profit firms with the goal of lowering U.S. carbon emissions, specifically by lowering home energy use. During a weekend utility conference in Aspen, Cynthia and Robin met and together created Pearl’s business plan. Together they embarked on a fundraising journey while continuing to build out the algorithms for the Pearl Certification system software. In May 2015, Robin and Cynthia left their respective jobs and devoted themselves full time to bringing Pearl to life.
We dive deep with the Co-founders of Pearl to find out why Pearl has been so successful and continues to become a leader in residential home energy certification.
During the pandemic, people spent more time in their homes than ever before and became very attuned to the health of their homes—and to the expense to heat and cool them. This spurred a very large increase in home re-modeling projects, as well as energy and indoor air quality upgrades. Regarding the real estate industry, once people realized they could work at home (in fact, had to work at home), they took another look at where they wanted their home to be. Suddenly cities were less attractive, and those who could afford more than one home purchased another one in a less risky location and with access to activities, they could enjoy even during a pandemic.
Through our work in the industry over the years, Robin and I were aware of the many issues getting in the way of scaling residential retrofits. And yet it was critically important that we do so given the looming climate issues science had identified. We knew that homeowners by and large want to live in efficient, comfortable, and healthy homes—and yet too few of them had made improvements that would give them this kind of living experience. Pearl’s solution to this problem is one that provides education, creates confidence, and incentivizes action. First, we qualify a network of contractors who can certify their work, and we provide a certification system to help homeowners understand what improvements to make. Second, we issue investment-grade documentation of the upgrade so that homeowners can capture the value in a future refinance or resale.
Does Pearl work? Does it provide the value we believed it would when we launched the company? The good news is, yes! Yes, it does. Each experience may be different depending on the home, the location, and the level of training of the appraiser, but homeowners who used our documents saw success in their respective transactions.
Pearl certifies features of homes, such as energy efficiency, solar, smart home, and resiliency to help homes appraise and sell for more (data shows that Pearl certified houses sell for as much as 5% greater value). Pearl’s certification system and network are enabled by a platform that connects the investment-grade data to the home, and the homeowner to professionals that service the full lifecycle of homeownership (contractors, real estate agents, etc.).
Pearl certifies homes and qualifies contractors—this is the basic difference between the two. Pearl’s credentialing requirements create confidence that Network contractors will improve a home’s performance and partner real estate agents will properly market and price a certified listing. The investment-grade documentation that is our certification report is critical, though, to valuing high-performing features in an appraisal and at resale.
Since we began the company, we’ve been remarkably focused on developing the vision we started with and have some ways to go when it comes to building out the full certification system. That said, we didn’t foresee COVID or the red hot real estate market. COVID slowed our B2B sales to contractors, and the very low housing inventory has distorted the real estate industry such that we have delayed doing a big marketing push to agents at this time.
The main challenge for Pearl is accelerating our growth while keeping a highly qualified, elite network of contractors and real estate agents. We’ve tackled this challenge a couple of ways: 1) by partnering with manufacturers and trade organizations whose own networks are differentiated on quality; and 2) creating homeowner-facing products to reach homeowners directly and accelerate our brand awareness.
Pearl strongly supports rectifying equity and equality issues. For example, we know that the poorest among us live in the worst housing and can pay up to 30% of their income for energy to heat and cool their homes. Pearl provides deeply discounted services for weatherization program providers and other businesses who work directly with low-income residents upgrading their homes. Of course, our homeowner portal is also free and available to anyone who wants to learn more high-performing home features, DIY projects, and connect to quality service professionals who can help them.
From the beginning, we have been a dispersed company that practices essentialism. Our team members tend to have low carbon footprints because they joined Pearl to support its mission of addressing climate change through upgrading our nation’s housing stock. That said, we are as paperless as we can be. We travel only when necessary – and when we do we make up for it with carbon credits. We also purchase from environmentally friendly businesses for food and lodging whenever possible.
The tips for realtors would be to embrace technology. Paper flyers etc. are particularly outdated for the new generation of buyers. Think digital: flyers, home tours, and 3D Matterport renderings. If lockdown has taught us anything it’s that buyers will still buy without all the paper. Even more important, though, embrace your role as a change agent. Real estate agents are an important source of advice for buyers and sellers – if they encourage energy efficiency it will make a difference to what buyers look for and sellers fix or improve before listing.
Pearl has established a national standard for high-performing homes and is raising the professional bar for multiple industries along the way. It is a huge undertaking at the nexus of new build, home improvement, and real estate. The market sizes are equally huge as is the potential for impact. Starting from nothing, the company established foundational relationships with gatekeepers and credibility makers like NAR, the Appraisal Institute, and ENERGY STAR. It has the industry buy-in of manufacturers, real estate, and contractor trade groups. It has a national footprint and a platform to connect and service customers wherever they live. No competitor has done anything like this, and it’s what makes the company a force to be reckoned with as we scale.
Pearl’s core message is that high-performing home features should be visible and valuable. Our newest product is a Solar Equity Calculator, which helps to deliver on this message. It provides appraisers with a discounted cash flow schedule so that they can incorporate this information into their opinion of value. In other words, it helps the homeowner capture the value of their renewable energy investment. It is clear that the real estate and appraisal industries need a reliable and trustworthy source for quantifying the value an owned solar system adds to the home. As market penetration for solar has significantly increased, we are overdue on a credible tool to standardize how to quantify value for it.
Cynthia has worked in the residential building sector for over twenty years. Her roles have included green builder, LEED AP, retail design-build business owner, nonprofit Executive Director, and now CEO for Pearl. Cynthia founded the Virginia Energy Efficiency Council and was a gubernatorial appointee to the Virginia Energy Council and the Governor’s Executive Committee on Energy Efficiency. In addition, she serves on the National Association of REALTORS Sustainability Committee. Cynthia has earned award recognition for her entrepreneurship, energy efficiency policy, and thought leadership.
Robin is a published author on energy efficiency data in real estate transactions, utility cost-effectiveness testing, and solar valuation. He previously served as the Managing Director of the National Home Performance Coalition, where he led national working groups that developed data transfer standards for residential energy efficiency. Robin also worked as the Executive Director of a New York City housing development that built, managed, and sold more than 1200 units of high-quality rental and homeowner housing, including the first affordable LEED Silver housing in NY.
