Imagine heading to your local grocery store to buy food for the upcoming week and not being able to see the nutritional label on any item to compare products. There would be outrage. What are these producers hiding you would ask yourself. How do I know which one is the healthier choice for myself and my family?
This is the same question we should be asking ourselves when we buy a home. We are in an era of information overload except for the real estate market. In this market, there is a significant information deficit. When house hunting (likely being the largest expense you will make in your lifetime), there is still little to no information about how your home operates.
Universal Home Energy Labelling
Enter stage left…universal home energy labelling. The federal government as well as most of the provinces and territories recognized this when signing the Pan Canadian Framework on Clean Growth and Climate Change following on our collective commitment to the Paris Accord. The Framework recognizes energy labelling as a fundamental tool for energy literacy and a call to action. Within this document, there is reference that energy labelling could be coming into the market place as soon as 2019. This was a shout out to the Province of Ontario.
The Government of Ontario recognized that transformational changes were required to meet its climate commitments, including those that will lead to changing current behaviour. The Province of Ontario’s Climate Change Action Plan includes a provision whereby the Province will require and provide free energy audits for pre-sale homes through a Home Energy Rating & Disclosure (HER&D) program.
Home Energy Rating & Disclosure (HER&D) Program
The residential building sector, which accounts for 10.9% of Ontario’s carbon emissions, is a sector where substantial green house gas (GHG) reductions can be achieved with only a minimal effort that produces maximum results.
Improving energy efficiency of residential buildings by implementing universal energy labelling requirements – or in Ontario’s case, HER&D – will encourage home owners to contribute to the fight against climate change while simultaneously increasing the value of their homes.
This program is not new. The European continent mandates energy labelling for both home sellers and renters. There are several jurisdictions in North America that require energy disclosure and the sky hasn’t fallen as skeptics would have you believe would happen if implemented north of the 49th parallel.
Quite to the contrary, as evidenced in other jurisdictions, the introduction of mandatory HER&D requirement creates benefits for homeowners that go beyond the fight against climate change. An increase in home valuation, greater consumer protection, increased energy literacy, and improved comfort and health are just some examples.
A 2013 study of nine European Union jurisdictions found that even a marginal HER&D rating improvement is likely to be interpreted by consumers as a significant improvement in energy efficiency, which translates into 2%-6% appreciation in home value.
In the Australia, sales data from 5,000 homes indicated that, on average, each additional HER&D program star-rating resulted in a 3% increase in the home sale price.
Power to the Home Buyer
Fundamentally, this initiative provides protection to the consumer. And improved consumer protection leads to market transformation where buyers make informed choices based on energy performance.
Countless studies have shown that HER&D does not deter buyers from purchasing homes.
The intended behavioural shift is that buyers will be more inclined to place a greater value on energy efficiency. This is good for Canadian buyers especially if there is a bidding war whereby they find out their dream home is going to cost them through the roof not only to finance but to operate as well.
Reducing Your Carbon Footprint…
From a societal perspective, HER&D encourages homeowners to implement energy efficiency upgrades. Research in jurisdictions where HER&D exists demonstrates that between 13%-37% of homeowners conducted energy efficiency improvements, or included more improvements than originally planned.
Energy efficiency upgrades to residential buildings reduces GHG emissions and its carbon footprint.
NAIMA Canada commissioned a study using data collected by Natural Resources Canada (NRCan), that puts this into perspective.
The study looks at the energy saving potential in Canada’s existing housing stock, and draws on data from actual audits of 634,000 homes in all provinces and territories. It is the first research of its kind to measure energy performance in a representative way.
The study set out to determine how many homes in Canada are under-insulated and to estimate, both regionally and nationally, the energy and cost savings that could be produced by upgrading homes to contemporary standards.
The data are impressive. According to the analysis, some 6.2 million existing homes have attic insulation levels at least R-20 below current code requirements equivalent to missing 6-7 inches of insulation. A reminder that anything below code in new buildings is illegal. For reference, of the five building components studied, ceilings with attics represent 49% of the total retrofit potential.
At aggregate, how much energy could be saved annually if all existing homes were fully upgraded? The analysis estimates this at 3.10 billion m3 of natural gas, 12.3 billion kWh of electricity, and 742 million litres of fuel oil. In terms of GHGs, this totals 4.26 million tonnes saved per year.
…And Reducing Your Energy Bills
If all communities across Canada upgraded to the full retrofit potential for insulation alone, the dollar savings would also be materially significant to the homeowners’ pocketbooks, and to our environment. As an example, a homeowner in Edmonton heating with oil or electricity would see savings of up to $400 annually. If the home is also air conditioned in summer, these savings would be higher.
Canadians spend over $80 billion annually on home renovations. If a fraction of that money is shifted to spending on energy efficient renovations, not only will homeowners experience an increase in value to their homes through HER&D, the resulting GHG reductions will be substantial. Implementing universal HER&D requirements as per the Pan Canadian Framework on Clean Growth and Climate Change will allow for the transformational change required in the residential building sector to fight climate change, assist Canada in achieving its climate and energy targets and make Canadian homes more comfortable, healthier and more affordable to operate.
Jay Nordenstrom, Executive Director of NAIMA Canada