Towards Carbon Neutral & Net Zero Energy for Residential Buildings in BC
Sub-Committee Meeting –Financial Tools and Incentives
May 21, 2014
John MaddenDirector of Community Planning
and Development
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Acknowledgements
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Sub-Committee Members
Tracy Casavant Executive Director, Light House
John Madden Project Director, Light House
Joanne sawatzky Project Manager, Light House
Joy Chen Building Analyst, Light House
Souri Riazi Research Analyst, Light House
Wayne Ward Technical Director, BRE UK
Svend Andersen GHG Accounting and Protocols Advisor
Project Team
Alan Sung Vancity
Brendan McEwen City of Richmond
David Hutniak Landlord BC
Jordan Fisher FRESCo
Katherine Rossokha BC Hydro
Nigel Protter BCSEA
Svend Andersen GHG Accounting Services
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Agenda
Time Discussion Items
9:00 – 9:10 Welcome & Introductions
9:10 – 9:30 • Study Objectives• Process and Timelines • Preliminary Research Findings• Challenges and Opportunities
9:30 – 10:30 Expert Working Sessions
10:30 – 11:00 Summary and Next Steps
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Study Objectives
Engage governments, utilities, building and
the real estate industry across the Province to
develop a cohesive and strategic road map to
advance carbon neutral and/or net zero
energy for residential buildings*.
* with a focus on BC Building Code Part 9 buildings
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Study Approach
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Definitions
STEP2:Meetremaining
energydemandwithno(orlow)carbonenergygeneratedon
oroff-site
STEP1:Squeezeenergy
demand,usuallytoapre-definedtarget
CARBONNEUTRALBUILDING
STEP2:Meetremaining
energydemandwithrenewableenergygeneratedon-site
NETZEROENERGYBUILDING
• Carbon Neutral Building– A building which significantly reduces
energy consumption combined with the increased use of low carbon energy sources to meet the remaining demand.
• Net Zero Energy Building?– A building which significantly reduce
energy consumption combined with the use of renewable energy generated on-site to meet the remaining demand.
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Advisory and Sub-Committees
Advisory Committee
(Expert Round Table)
Subcommittee- Financial
Mechanisms & Incentives
Subcommittee- Technologies
Subcommittee- Education, Awareness &
Capacity Building
Subcommittee- Policy, Codes &
Regulations
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Sub-Committee Objectives
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Policies, Regulations & Codes
Technologies
Financial Tools & Incentives- What is the financial cost / benefit to meeting established
targets?
- Where the costs were considered to be incrementally significant higher than business-as-usual, or where challenges regarding distribution of benefits existed, were incentives required? If so, what type of incentives?
- What incentives were used to drive market-level strategies?
Education, Awareness & Industry Capacity Building
Select cities in different Climate Zones
• Zone A: ≤ 3500 HDDs
➠ Vancouver, HDD18max(1971-2000): 2960
• Zone B: > 3500 to ≤ 5500 HDDs
➠ Kelowna, HDD18max(1971-2000): 3869
• Zone C: > 5500 to ≤ 8000 HDDs
➠ Fort St. John, HDD18max(1971-2000): 5893
• HDD18max - The standard method for calculating the Degree Day Daily mean;
• Daily mean = (Daily max + Daily min) ÷ 2• HDD18max (1971-2000) – The average of
HDD18max value from 1971 to 2000
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Residential Building Typologies Structural Type of Dwelling and Collectives Reference Guide, 2011 Census:
• Detached Houses: Single Family Dwellings
• Attached Houses: Duplex, Semi-Detached and Row Houses
• Multi-Unit Residential Buildings: Apartments
• Moveable Dwellings:
Detached Houses
Mobile Homes
Semi-Detached (vertical division)Duplex (horizontal division)
Apartment < 5-storey(horizontal & vertical division)
Apartment ≥ 5-storey(horizontal & vertical division)
Row House (vertical division)
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Define Characteristics of Housing
House Characteristics Typical Rating Building Standards / Codes
Unimproved Older house 0 to 50 Pre 1970’s Building Code
Partially improved Older House 51-65 1970’s – 1980’s Building Code
Fully improved Older House 66-75 1990s Building Code
Typical New House 68-82 Current Building Code
Energy Efficient House 80-90 R-2000 House
Super energy-efficient House 91-100 Net Zero Homes
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Matrix of Climate Zone & Typologies
Statistics Canada, 2012
• Single detached houses are the most common housing type except in BC.
• The average occurrence of single detached houses across BC is 47.7%.
Climate Zone A B C
House Types BC Average Vancouver Kelowna Fort St. John
Single-detached 47.7% 33.8% 56.5% 59.0%
Semi-detached house 3.0% 2.2% 4.6% 5.4%
Row house 7.4% 9.0% 5.4% 7.8%
Duplex 10.4% 14.2% 7.2% 1.4%
Apartment, < 5 storeys 20.5% 25.6% 19.9% 13.9%
Apartment, ≥ 5 storeys 8.2% 14.5% 1.6% 0.9%
Moveable and other houses 2.8% 0.7% 4.7% 11.7%
Distribution of housing types in BC climate zones, by # of buildings
47.7%
20.8%
28.7%
2.8%BC Distribution, Total # of units
Detached
Attached
Apartments
Mobile Homes
67.9%10.0%
19.4%
2.7% BC Distribution, Total Floor Area
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Matrix of Climate Zone & Typologies NRCan database, 2011
• Almost 74% of dwellings were constructed after 1977. • About 25% of all types of residential buildings were built in 1984 -1995. • The age of the house may reflect different construction types and hence
determine the building characteristics and performance.
BC dwellings Age Distribution, by # of buildings (%)
Before1946
1946–1960
1961–1977
1978–1983
1984–1995
1996–2000
2001–2005
2006–2010
2011–2011
Single Detached 4.3 5.6 18.9 13.6 24.5 12.2 7.4 11.9 1.6
Attached 2.2 2.3 7.7 12.7 29.7 10.4 12.9 18.9 3.1
Apartments 3.9 4.1 14.7 10.2 24.8 12.1 8.1 19.6 2.4
Mobile 5.2 3.9 23.3 9.7 20.5 12.5 9.5 13.2 2.1
0
10
20
30
40
50
60
70
80
90
100Pe
rce
nta
ge
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Why is energy efficiency for buildings important?
Electricity is a growing operating cost- Inclining block rates; average increase of 4.4%/yr*
Major source of greenhouse gases- 55% of Vancouver GHGs
*2010 forcast; pre-BC Hydro-review
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Setting Targets and Step Changes
SETTING TARGETS & PERFORMANCE
> OUTCOMES
Adopt baseline performance based on similar climate zones and building types Define quantitative targets for carbon and energy performance Define “step changes” and recommendations
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MatrixType Physical Characteristics
(Age, Floor area, Units)Example Type Baseline
Site EUI (kWh/m2)
BaselineTotal Energy
(GJ/household)
Detached • Less than 4,200 sf• Two-storey with basement • 2x4 or 2x6 exterior walls, • R12, R20 or R28 batt insulation• Attic insulation: R28 or R40
178 81.2
Attached • Size from 800-1,200 sf• Two to three storey• 2x4 exterior walls, R12, R20 or R28
batt insulation• Attic insulation: R20
175 81.2
Row House • Size from 1,600 sf, newer units with finished basements 2,400 sf
• Two to three storey • Exterior Walls: 2x4 stud walls with
R12 batt insulation• Attic insulation: R-21
(NRCan data combine these two housing types in one category)
Apartment Up to 3 stories (Part 9 only)
153 49.8
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Barriers to Retrofitting Buildings$
Source: Institute for Building Efficiency Survey, 2012
Financial Tools and Incentives$
1.Property Assessed Clean Energy (PACE)2.Energy Service Companies (ESCO’s)3.Toronto Atmospheric Fund (TAF) 4.On Bill Financing and On Bill
Repayment through utilities
Property Assessed Clean Energy (PACE) $
Toronto Atmospheric Fund (TAF)Energy Saving Performance
Agreement$
Energy Service Companies (ESCO’s) $
On-Bill Repayment Financing $
On-Bill Financing $
Benefits Challenges
No up front capital cost for the owner Limited availability at this time
Very competitive interest rates
Often the first mortgage lender’s approval is necessary to alleviate the primary debt holder’s concerns in the event of default
In some cases (tariffs) investment and repayment link to the property not the owner
Utilities may limit the loan amount, so more expensive retrofits may be precluded
Utilities may be reluctant to embrace on-bill financing as it shifts the loan administration burden to them
Innovative Financial Incentives and Mechanisms
Key Principles for Success
•Minimize risk to those undertaking the energy efficiency capital investments
•Induce the market by making the ROI shorter by lowering the costs associated with the investment
•Generate on-going dividends after the capital expenditure is paid off
•Bundle incentives with regulatory /code changes to balance the “carrot and sticks”
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Sub-Committee: Working Sessions
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Discussion Questions
What incentives should be used to support
market-level transformation?
Where should financial tools and incentives
be focus to achieve greatest impact?
What level of financial support is required to
achieve Carbon Zero/ Net Zero Energy within
residential sector?
* with a focus on BC Building Code Part 9 buildings
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Identify innovative financial tools and incentives that effectively move the residential sector toward CN/NZE…
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Loans, rebates
Reduced energy rates for achieving energy reductions (tiered based on usage)
Tied energy efficiency to property tax rates
Energy tax (the higher the energy usage tied to a tiered tax)
On-bill financing through utilities or 3rd party financiers. They need to provide
competitive interest rates and terms
Clean Energy Mechanisms geared to residential sector
PACE.
Non-secured loans. Key save and AFC intermediary financing institutions to provide
home energy loans and credits associated. Coupled with loan loss reserve funds
Incentives tied to meeting specific outcomes or targets
Income tax credits or taxation related incentives
Leveraged incentives (combined with government incentives)
Non-financial incentives (for example Energy Advisors to help home owners make
decisions around deep energy retrofits
Process and regulatory incentives. Fast tracking permitting. Thicker walls are not
calculated as part of FSR or height (exclusions for energy efficiency measures such
as solar installations excluded from height calculations
Identify innovative financial tools and incentives that effectively move the residential sector toward CN/NZE…
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Low income incentives with energy efficiency kits
Guarantees or competitive financing packages tied to energy efficiency upgrades
CMHC Mortgage Insurance tied to EE upgrades
Energy efficiency equipment tied lease agreements (washer and drier upgrades)
Credit unions have expressed interest in major equipment upgrades.
Important to look at existing programs success and failures. Define why they failed
and how they are structured. Partly non-financial considerations and factors that
contributed to the success or failure.
District Energy connection policy (i.e. required connections to District Energy
including Lonsdale Energy Corp, SEFC Neu, Little Mountain, etc. Benefits the
developer and owner. Requires smaller mechanical rooms,
Additional zoning permissive rights tied to energy efficiency.
Allowing landlords to raise rents above regulated rent increases if they upgrade
energy efficiency.
Establish “Green Funds” specifically geared to energy efficiency infrastructure. Need
common program administrator that forge partnership between utilities. Local
government, and non-profits
Green Facilitator to link to incentives and programs and help owners/tenants through
the process.
Priorities, Roles and Responsibilities for Stakeholders
Stakeholder Key Priorities
What is their role and responsibility in moving
financial tools/incentivesforward?
Governments
Financial Institutions
Builders
Utilities
Energy service companies
Manufacturers/ Trade associations
Non-government Organizations
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Milestone
2010 202033% GHG reduction
2030?
2040?
205080% GHG reduction
Policies and Regulations
Technologies
Financial Tools and Incentives
Awareness, Education and Capacity Building
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Milestone (example)
20102020
33% Reduction in GHG’s drom 2007 levels
Regulatory framework and support schemes
Market facilitation and transformation
Technology development and R&D
2030What is the step
change?
2040What is the step
change?
205080% Reduction in GHG’s
below 2007 levels
Market Supportschemes to achieve technology uptake?
Regulatory framework preparing large-scale integration of PV into grid
Building Codes and standards…prescriptive and / or performance based targets?
Framework for full market competition with priority access to the grid
Energy standards taking into account solar PV building regulations and obligations
Training and education for skilled workforce needed for the following areas…?
Increased R&D funding to accelerate cost reduction and transfer to industry
Enhanced system applicability of PV and related technologies and products
Enhanced storage technologiesSmart grid and grid management tools
Research into concepts for ultra high performance/low-cost approaches
Key actions and respective leading roles for:Government stakeholderMarket stakeholders (Demand)R&D and industry stakeholders (Supply)
Source: International Energy Agencywww.iea.org/roadmaps
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Next Steps
• Follow up Sub-Committees– Technologies (completed)
– Policies, Regulations and Codes
– Education, Awareness and Capacity Building
– Financial Tools and Incentives
• Summarize Input
• Draft Directions
• Advisory Committee #2 (Round Table) end of June
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