The quest to incorporate energy efficient measures into new homes to meet net-zero targets is an admirable goal that the residential construction industry is working diligently to achieve. However, it is wise to question whether the costs of such actions are indeed rational.
We did just that with a case study that compared two approaches that could represent the future of energy efficiency in new homes. The conclusion was that the added benefits associated with increasing energy efficiency measures do not always justify the added expense.
While there is a move to fully electrify all new building and homes to meet net-zero targets in order to combat climate change, evidence from the demonstration project indicated there are concerns as energy savings that result from these moves have limited impact on utility bills.
For example, the measures could add up to $50,000 to the price tag of a new home but save the consumer only $600 per year on utility bills. That’s not much in the way of savings for such a substantial investment, especially if you amortize the initial amount over the life of a mortgage.
The findings were important because we are in an unprecedented housing crisis and the residential construction industry is facing a perfect storm of issues. Housing supply is actually falling at exactly the wrong time which will further exacerbate an already dire situation. It is not wise to add more costs to housing without due consideration as to whether they really make sense.
In the case study, analytical comparison methods were used to quantify, verify and compare data on the real world performance of two occupied and nearly identical homes that were halves of a semi-detached house to its annual energy-use simulation computer models. One of the semis was all-electric and designed to achieve net-zero energy. The other was a low-carbon home.
Findings showed discrepancies between the actual annual energy use performance of the homes and the software simulation. The homes consumed more energy than had been forecast. Importantly, the study also found that moving too far beyond the current building code requirements for energy efficiency measures can result in a negative return on investment.
The research corroborated a similar case study that was presented by NRCan in 2023 and highlighted the need for a more thorough and ongoing analysis.
The results are concerning because many of our major policy decisions, such as changes to building codes, are based on assumptions derived from software models, meaning our climate strategy with respect to what is required of new homes and buildings might be misguided.
Many of our codes and standards are focused on policy but the intended outcomes of the policy and technical code changes that can happen as a result are never backtracked and verified.
This study made some inroads into that issue. However, as was noted, a deeper dive is needed.
Incorporating energy efficient products into new homes can make it more complicated and costly to build them– and more difficult for consumers to afford them– should be scrutinized. Such moves will only make it more difficult to reach our housing targets.
The residential construction industry is already recognized as a leader in adopting more energy efficient building practices. Steps to impose more energy efficient measures without further study and analysis would only serve to exacerbate an already strained housing market.
The residential construction industry is already dealing with crippling taxes, fees and levies that add as much as 31 per cent to the cost of a new home, putting home ownership out of reach for many.
Moving too quickly in adopting energy efficient measures without proper consideration of the merits could lead to other problems- namely that we might not have the trades to do the work.
A new report by BuildForce looks at what effect the push to eliminate carbon emissions in residential, commercial and institutional buildings could have on already tight construction labour markets.
The report, called Building a Greener Future, noted that the transition will create jobs but construction labour markets are already strained and have been operating at capacity. The push for more energy efficiency measures in new homes could be the straw that breaks the camel’s back.
To successfully incorporate energy efficiency measures into new homes, we will need a larger construction workforce than has been anticipated and a corresponding increase in incentives to keep the cost of measures under control. Homebuyers already face significant headwinds.
If we are going to incorporate more energy efficiency measures in new homes, we will have to ensure we have the workforce and the data to show the strategy makes sense.
Richard Lyall is president of the Residential Construction Council of Ontario (RESCON). He has represented the building industry in Ontario since 1991. Contact him at media@rescon.com.
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