Author: Brett Knox
July 16, 2024 - 6 MIN. READ
The multifamily market is often overlooked when discussing the ongoing energy transition. However, electrifying these properties creates some clear benefits due to the rising demand from tenants and the need to reduce operating expenses at multifamily facilities.
As an electrical contractor, shifting your focus to multifamily electrical projects can be a great differentiator and a factor for growth.
Top 7 Reasons to Focus on Multifamily Electrification
Multifamily properties are a defining trend in the U.S. housing market. In 2024, more than 672,000 apartment units were completed, representing the fastest growth of multifamily housing complexes recorded since the 1980s.
Electrical contractors have access to a large market that is expanding rapidly.
1. Incentives and Demand
There is a strong push for supporting electrification at the federal and state levels, with billions invested through the Inflation Reduction Act.
For multifamily property owners, the Alternative Fuel Vehicle Refueling Credit creates an incentive to invest in EV charging. It also allows builders to benefit from a tax credit through a multifamily energy efficiency program that rewards the construction of Energy Star-certified units. Additional programs and incentives exist at the state, local, and utility levels.
Demand from tenants is also spurring electrification in the multifamily market. With only 1,200 multifamily EV charging stations recorded in 2022, there is an opportunity to install and highlight EV charging as a perk for tenants as EV adoption continues to increase.
2. Profit Margin Boost
Compared to traditional electrical projects, electrification services typically result in a bigger bottom line. This is especially true of multifamily electrification projects where a job can involve upgrading multiple units or parking spaces.
For multifamily electrical contractors, projects can create more value while requiring less time and resources spent on customer acquisition due to a larger average project scope.
You can maximize value by implementing strategies to boost your profit margin, such as turning electrification projects into sources of recurring revenue by offering maintenance plans.
3. Expanded Project Scopes
Multifamily electrification projects tend to have a broader scope than other types of electrical work.
Electrification solutions, whether EV charging or electrical heating and cooling, increase energy consumption and often require an infrastructure upgrade.
A multifamily property owner who is considering electrification will often need a panel upgrade. You can help them by performing a load calculation and exploring solutions like smart panels, battery storage, or renewables integration with meters feeding solar energy into apartments.
4. A Competitive Differentiator
As a contractor, focusing on electrification and building a future powered by clean energy makes you the ideal partner for multifamily property owners who tout their environmental values.
There is a strong incentive for multifamily property owners to partner with innovative contractors who have embraced electrification. With more than half of tenants under the age of 44, partnerships that consolidate sustainable values can help attract and retain young tenants who care about sustainability.
5. Attract New Employees
Many electrical contractors struggle to find young adults who want to pursue a career in the trades. As electrification accelerates, there could be as many as 80,000 new positions to fill every year, creating an increasingly competitive labor market.
You can stand out from other potential employers by offering electrification services that support a better future. Adopting sustainable values and offering competitive pay through projects with a higher profit margin can positively impact hiring and retention.
6. New Opportunities for Growth
Shifting your focus to electrification projects can give you access to new opportunities among your existing customer base. You will likely find that some of your customers are ready for electrification and would prefer to work with a contractor they know and trust.
Electrification will also open opportunities in new niches. The multifamily market is a great place to start, but you can branch out by offering residential electrification services or targeting the commercial building space.
7. Increase Business with Local Partnerships
Partnerships can go a long way to opening up new business channels. Find out who the local electrification leaders are and look for ways to partner with them. You can benefit from partnering with other electrical contractors who focus on different verticals if you agree to share referrals.
You can also partner with HVAC contractors. The demand for cost-effective heating and cooling solutions powered by electricity is increasing, and heat pumps often require wiring by an electrical contractor.
Another possibility is to partner with builders and property developers. The current trend is to build properties that are ready for electrification, and you can play an essential role in designing modern electrification systems during the construction process.
What’s Next for Multifamily Electrical Contractors?
We recommend taking a strategic approach to updating your value proposition and making multifamily electrification your priority.
Choosing an Area of Focus
You can start by gaining a deeper understanding of the different technologies shaping electrification and assessing demand in your local multifamily market.
EV Charging
By 2030, there could be 2.1 million EV chargers at multifamily homes, hotels, workplaces, and similar locations.
For multifamily properties, offering EV charging can be an additional source of revenue and a strong differentiator. Level 2 charging will likely represent the bulk of the demand, but DC Fast charging can be a viable solution for larger apartment complexes.
Building Automation and Controls
Installing energy management solutions, automated lights, and smart HVAC solutions are only a few examples of the many opportunities in the building automation and controls market, which is growing at an annual rate of more than 6%.
Battery Storage
Designing multifamily electrification solutions that rely on local battery storage enhances resilience and can help manage energy costs in areas where utilities implement time-of-use pricing. Battery storage is an upgrade that can create additional value for property managers looking to address the increased energy demand linked to EV charging and other electrification applications.
Renewable Energy
Besides providing tenants with clean energy, solar panels can help offset the increased electricity usage that stems from EV charging and heat pump solutions.
As an electrification contractor, you can guide multifamily property owners as they explore rooftop solar solutions and design an electrical infrastructure that integrates clean energy.
Electric Heating and Cooling
Electric heat pumps and other electrical heating and cooling solutions are a great match for the multifamily market.
Partnering with an HVAC contractor can give you access to lucrative jobs where you’ll upgrade properties with modern heating and cooling solutions that reduce energy consumption, lower costs, and give tenants more control over the temperature in their individual units.
Panel Upgrades
Electrification projects often require a panel upgrade. Investing in smart panels and advanced load management solutions for multifamily properties has several benefits, including gaining more visibility into energy consumption.
Targeting the Right Market
The multifamily market is full of electrification opportunities because contractors often overlook it. However, it’s vital to assess demand in different markets and select the right choice based on your current capabilities.
For instance, getting started with residential electrification jobs can be a strategic decision that allows you to focus on smaller projects until you gain the experience and resources needed to tackle larger multifamily jobs. [link to article #3]
Training and Upskilling
You’ll need to seek specialized training before you can start working on electrification projects. Reach out to local players to explore training opportunities, and consider obtaining an EVITP certification to install EV chargers or become a Certified Energy Manager to learn more about renewables integration.
Raiven can Help You Win More Multi-family Jobs
The energy transition is happening quickly thanks to government incentives and interest from businesses and consumers. As an electrical contractor, you would be wise to give the multifamily market a second look.
To prepare for these larger jobs, electrical contractors must have a robust procurement process. It’s where Raiven can be indispensable.
Maximize your cost savings and simplify your purchasing by joining a premier purchasing program like Raiven that specializes in electrification equipment and supplies. Raiven harnesses the collective buying power of all its members and negotiates deep discounts, advantageous service terms, and priority access with distributors and manufacturers. Eliminate the headache of vendor negotiations and enjoy lower prices for EV charging stations, battery storage, lighting and controls, load shedding, tools, wires, panels, conduits, and more.
Gain access to pre-negotiated discounts of 7%-30% from industry-leading manufacturers and distributors, including ABB, Alpscontrols, ChargePoint, EnelX/Juicebox, Ferguson, Grainger, Graybar, HD Supply, Home Depot, Lowe’s, Office Depot, Sunbelt Rentals, Schneider Electric, United Rentals, and more!
Raiven is committed to supporting electrical contractors by providing unbeatable prices on equipment, parts, and maintenance supplies. Experience the convenience of our streamlined purchasing platform for quick and efficient procurement. Other key benefits:
Save time and money while going after larger jobs with a stronger procurement process. Visit Raiven to learn more about the unique benefits we offer!
