Creating space. Terraso Solutions advocates energy efficiency with a “double staggered wall” which eliminates heat transfer through the studs by keeping them away from the wall plates, and providing an 8-inch area in which cell spray foam insulation can be applied.
A startup builder that a year ago couldn’t give its houses away to Phoenix buyers has reinvented itself as a marketer of energy efficient construction technology.
In late 2007, Saddlebrook Homes of Scottsdale, Ariz., was preparing to start marketing 3,900-square-foot houses priced between $450,000 and $500,000 within a 40-lot subdivision in south Phoenix. But the housing market there was drying up, and local real estate agents informed the builder that they would not be able to find buyers for those homes at that time. “We were fired by our realtors,” says Jan Prieb, the company’s vice president of public relations, only half jokingly.
So Steve Leathers, a housing and development veteran who is one of Saddlebrook’s principals, spent the next 18 months devising a new way to build homes that real estate agents could sell. Leathers also used this time with Prieb’s help to assemble an executive team of construction, sales, engineering, and marketing experts.
What emerged from this hiatus, and what this team launched last week, is Terraso Solution, a new venture offering a whole-house construction system that focuses on building a tighter home with far better-insulated walls and roofs to offer energy efficiency and healthier air quality. Leathers thinks Terraso Solution will not only revive Saddlebrook’s fortunes eventually, but can also be licensed to other local and even national builders.
“Builders are desperate right now for something they can sell,” he explains.
Last week, Saddlebrook initiated a direct-mail campaign for Terraso Solution to 50 local builders. That included providing real estate agents with brochures and other marketing materials so they understand the qualities of these houses built to this system and can sell them properly to home-buying prospects. In the following weeks, the principals want to expand its campaign to larger builders within Arizona, and then to builders in other states. They are revamping Terraso’s Web site so that users can calculate how this new technology would reduce their energy costs, by city, and size of home.
“We’re creating a campaign that’s consumer-driven,” says Leathers, who adds the the goal is to make the building and selling of these homes as streamlined as possible.
The company built a concept house within its gated subdivision to showcase the Terraso technology. “Double-staggered” walls separate plates from studs and create an eight-inch space that can be filled with cell foam insulation. Terraso also has a patent pending on its roof technology, which separates the roof from the lattice for the roof tiles with a 3½- to 5-inch gap to create an extra layer of insulation. That technology might be particularly attractive to buyers in blazing hot Phoenix, as it reduces the energy needed to cool the inside rooms and extends the life of the roof itself. Terraso’s technology also calls for generously spraying foam insulation to seal the exterior cavities and further reduce energy loss.
The company claims that Terraso Solution makes homes 70% more efficient, and lowers air leakage to 1%. Leathers says the concept home is returning energy to the grid. Testing has also shown only a one-degree variance in room-to-room temperatures inside the house. (The company use a local testing firm, Energy Inspectors, to verify its claims. Plus, the construction meets or exceeds specifications of PowerWise, the Energy Star program administered by the local electrical and water utility Salt River Project.)
Cooling Down. A 3-1/4-inch to 5-inch gap separates the roof from its tiles, leaving space for an extra layer of insulation. Interior rooms therefore require less energy to cool, and the lifespan of the roof itself is extended.
The biggest challenge facing the marketing of Terraso Solution will be getting price-conscious buyers and cost-conscious builders to see the bigger picture. Applying Terraso’s technology adds an estimated $16,763 to the construction of a 3,900-square-foot house, or $33,020 if solar roof panels and water tanks are included. But that same house’s annual heating and cooling expenses would go down by more than 70%. An owner’s average monthly electric bill would fall to $130.60 from $343.80 for a home built without this technology. The Terraso house also produces a smaller carbon footprint, and its value potentially rises, especially if the buyer can negotiate a mortgage that takes into account the house’s energy-efficient construction.
The company has done similar calculations for a 1,700-square-foot house, which would cost between $10,373 and $20,310 more to build—depending on if solar is included—but reduce an owner’s energy bills by $132.70 a month, according to testing results Leathers sent to BUILDER. “We can show them the energy bills” from the concept house, says Prieb.
Builders subscribing to this technology would pay $5,000 to be authorized and registered on the Terraso Web site. The company also is charging builders a licensing fee that Leathers says would be equal to $1 per square foot of house. The dwelling itself would be authenticated with its own serial number and plaque that indicates it was built to Terraso’s construction regimen.
While it is concentrates on single-family home construction, Leathers suggests that Terraso Solution’s technology could be applicable to renovation and multifamily construction projects. He's also spoken with representatives from Native American tribes that are interested in building energy-efficient homes on their reservations.
John Caulfield is senior editor for BUILDER magazine.