Americans may spend as much as $20 billion each year on various indoor air quality products and services, according to a conservative estimate recently prepared under a contract with the U.S. Environmental Protection Agency. A report tallying Americans’ yearly expenditures in an assortment of categories related to indoor air quality places nationwide spending on IAQ within a range of $12 billion to $20 billion.

The estimate is part of a report approved last month by Lawrence Berkeley National Laboratory, the EPA’s research arm in California. Compiling data obtained from a number of industry sources, author Hal Levin provides rare insight as to the approximate value of maintaining indoor environments in the United States.

This chart, based on figures in Hal Levin’s report, shows the nine categories of IAQ products and services that comprise the estimated expenditures of $15.9 billion. “Considering the large uncertainties and approximate nature of the estimates, a range of $12 to $20 billion is considered most useful,”Levin states in the report. “It represents roughly ± 25% around the central approximate estimate of $15.9 billion.”

“While not precise, this estimate does indicate that the level of expenditure is substantial,” Levin states in the paper’s conclusion. “It is also apparent that expenditures are growing and the market is shifting within the various elements of the market.”

Levin prepared the report under a contract with the EPA’s Indoor Environments Division. Dated June 2005, it was submitted last month to Lawrence Berkeley National Laboratory, which is scheduled to process the report and publish it this year.

Of the nine different categories of IAQ services recorded in the report, the two most lucrative – duct cleaning and the abatement of asbestos and lead –yield an estimated $4 billion apiece, according to industry sources Levin references in the report. Each of the next three most financially significant sectors of IAQ expenditures garners over $1 billion, the report says.

Levin notes that the grand total estimate of $15.9 billion in expenditures among all nine categories is not inclusive of some aspects of the IAQ industry whose figures could not be ascertained. Because some dollar amounts are not divulged to the public, such as those for undisclosed payoffs for insurance and litigation claims related to indoor air, Levin was not able to figure them in his estimates, one factor why the total number could be higher – or lower – than his estimate.

Levin further admits in the report some specified figures are “soft” considering other factors. For example, a $3.4 billion estimate for building-remediation expenditures factors in spending made in the commercial, institutional and multifamily residential sectors – and provides separate breakdowns for each building type – but does not include any remediation expenditures in single-family residential buildings.

The estimate for remediation expenditures “covers mostly remediation of HVAC systems and contaminant removal,” according to the report. The figure was derived from 2002 research by George Benda and also on data provided that same year by the National Energy Management Institute.

In addition, Levin’s conclusion outlines another broad category he says “would certainly increase the total amount spent substantially” if an estimate were attainable. This category, he says, incorporates the wide variety of “products and services routinely used to control indoor air quality such as mold removal and air freshener products.”

The $4 billion estimate for residential and commercial duct cleaning is based on the results of an informal survey of members of the National Air Duct Cleaning Association released in 2004. The asbestos abatement figure includes residential and commercial work, while the lead abatement work includes only receipts in the residential sector. Sources for these figures include a 2004 report by the U.S. Department of Housing and Urban Development and an EPA guidance document on asbestos from 1979.

The fourth-most lucrative category, which Levin labels in the report as “consultant services for IAQ problem investigation, diagnosis and resolution,” rakes in $2.1 billion each year. This figure includes consultant investigations and diagnostic services but does not include in-house diagnostic services or in-house response to or resolution of complaints, according to the report.

At $1.5 billion, air cleaning and improved filtration comprise the fifth-most lucrative category. The figure takes into account sales figures provided by major manufacturers of residential air-cleaning units and replacement filters and also assumes “a few hundred million”dollars consumers rack up on energy costs to operate the machines in their homes.

Much of Levin’s report focuses on spending in categories describing various services available to consumers, rather than IAQ products. The category devoted to air cleaning and improved filtration is the only category specifically describing product sales.

A spokesperson for Honeywell International Inc., which sells a wide variety of IAQ products, told IE Connections last month that the corporation does not release sales figures for its individual product lines although it does disclose divisions’ net sales in its annual financial reports.

Levin calculates the total for all nine categories referred to in his report as approximately $15.9 billion. Further, he provides a wider range of $12 billion to $20 billion, which represent figures that are 25 percent lower and higher than the original estimate.

“Hal’s report is an important milestone because it looks across the various organizations that have been trying to get their hands around the market,” said Benda.

As president of the building-science consulting firm Chelsea Group Ltd., he has conducted similar research in the past to provide values to aspects of the IAQ market. “We have been working on issues related to the IAQ market for more than a decade,” he said, pointing out that one of the difficulties in such work is defining precise categories of expenditures and eliminating overlap and ambiguity.

Chelsea Group is currently working with the National Energy Management Institute under a “major, joint-industry project” sponsored by the U.S. Department of Energy to “develop an assessment of market for [mold and] moisture management,” said Benda. “Levin’s paper is not going to be the last word on this topic,” he said.

In addition to Benda, Francis “Bud” Offermann was another one of several people whom Levin interviewed while preparing the report. Offermann, who is the president of the IAQ consulting firm Indoor Environmental Engineering based out of San Francisco, said he could not vouch for the accuracy of the entire report but just the parts to which he contributed.

“It’s the first paper I know of that gives a financial overview of [the IAQ market], that tackled this in what was an attempt to be kind of comprehensive,”said Offermann. “It’s someone’s best stab at it.”

In Levin’s report, asbestos and lead abatement is estimated to generate $600 million more than building remediation for IAQ, the category that includes the removal of contaminants, Offermann noted.

“Asbestos and lead [abatement] is still real, real big,” he said. “There are so many people in the business that you can’t get” an exact number for consumer expenses, he said.

Other figures in the report provide further insight into specific remediation expenditures. In 2002, expenditures on contaminant removal totaled $439 million, with little more than half of the building remediation market in the commercial sector. Improved air filtration also generated $439 million that year, as did sealing or covering ductwork, according to National Energy Management Institute statistics cited in Levin’s report.

Still, more was spent on two other categories within building remediation that year, it shows. Overall expenditures on improved ventilation were $659 million for the year, while the repair and replacement of HVAC systems generated nearly $1.1 billion in itself.