By Ted McIntyre

Climate change is real. There are inexplicable pockets of detractors, but the temperatures over land and sea are steadily increasing, the arctic icepack and glaciers are melting away, sea levels are rising…you know the story.

“Climate change is a fact in our daily lives, raising the cost of our food, causing extreme weather that damages property and infrastructure, threatening outdoor activities we love and melting winter roads that provide critical seasonal access to remote northern Indigenous communities,” notes Ontario’s Minister of the Environment and Climate Change, the Honourable Glen R. Murray. “It affects every aspect of our lives, so it is our collective responsibility to fight climate change together to ensure our children benefit from a cleaner planet.”

In an attempt to stem the environmental destruction, countries around the globe are taking measures to modify the way they live and do business. For its part, the Ontario provincial government introduced the Climate Change Action Plan in June. The 85-page document outlines the government’s ambitious plan to spend up to $8.3 billion over the next five years, including a projected $1.9 billion in its first year, to encourage individuals, municipalities and the business world to reduce their carbon footprint, while also creating new jobs and opportunities in this new low-carbon economy. Dedicated to the program’s initiatives, most of the “Green Bank” funds will be generated by cap-and-trade penalties for large commercial polluters in Ontario.

The plan commits to lowering greenhouse gas emissions by 15% by 2020, 37% by 2030 and 80% by 2050, with a Net Zero building code in place “no later than 2030.”

One of its key inclusions is the Home Energy Rating and Disclosure (HERD)—something actively supported by OHBA. Free to homeowners, these audits will be required before a new or existing single-family home can be put up for sale, with the energy rating included in the real estate listing.

Also part of the package are incentives for high-performance purchases, including rebates to individuals who buy or build their own Near Net Zero carbon emission homes, as well as for homeowners who purchase and install low-carbon energy technologies such as geothermal or air-source heat pumps, and solar thermal and solar energy generation systems.

With the Province setting a target for 12% of all new vehicle sales to be electric by 2025, builders will also be required to ensure all new homes are Electric-Vehicle-Ready, meaning all homes with garages must be constructed with a 50-amp, 240-volt receptacle.

Not that Ontario builders haven’t been making huge strides on their own in recent years. With the 2017 Ontario Building Code now in effect, new homes will consume only 50% of the energy they would have in 2005. Of course, the OBC primarily deals with new construction, which comprises only 1% of the overall building stock on an annual basis. The fact that the Action Plan also appears to be prioritizing new-home upgrades as it fast-tracks the Code to a Net Zero status, as opposed to focusing on the existing housing stock, seems misguided to some.

“Over the past decade Ontario’s home builders have made a quantum leap and they deserve a lot more credit for it,” says EnerQuality President Corey McBurney. “The fact is that Ontario is the North American leader in energy efficiency in new-home construction. If I had one wish it would be that the public sees the progress that is being made and how we made it. (So) if we’re serious about reducing housing’s carbon footprint, it’s high time we looked beyond the relatively small carbon emissions from new homes and aggressively retrofit older homes to bring them up to 2012 standards, let alone 2017 or 2030 codes!”

“Existing homes, which make up 99% of the housing stock, are a far greater problem,” echoes Doug Tarry, Director of Marketing and Lead Designer for Doug Tarry Homes. “Go back and make all those existing homes 20% to 25% more efficient from where their baseline is right now and you’ll move the meter way further than if you go after the 1% of new homes that get 5% or 15% better. Whereas new homes might have R-60 insulation in the attic, R-40 in the walls, R-35 in the basement walls, R-10 under the basement slab and triple-glazed windows, some of those existing homes may have R-10 in the walls and R-20 in the attic and are really leaky. So there are things that are not that difficult or expensive that can be done to existing homes to significantly improve their efficiencies. But we have bureaucrats making decisions who don’t know this.”

Fossil Fuel Fallout

The pursuit of zero carbon emissions entails the curtailing of natural gas use—no mean feat given that the fuel is currently the primary heating source in 76% of Ontario homes. Jennifer Weatherston, director of Innovation & Estimating with Cambridge-based Reid’s Heritage Homes, believes there should be room for both electricity and natural gas. “We are continuing to apply features incorporating natural gas to our homes,” Weatherston notes. “We feel it offers options to homebuyers in a market where utility rates continue to rise. Let the buyer choose their dominant fuel-based system and how much they are paying and to who. In our analysis of Net Zero Ready / Net Zero homes, there is an 87% reduction in greenhouse gas over code-built homes. This is based on incorporating a hybrid system of electric and natural gas. By offering a hybrid approach, buyers can take advantage of electric air-sourced heat pumps or cost-effective gas back-up furnaces. The Climate Change Action Plan chooses for the buyer; it does not currently suggest that buyers have an option. Homeowners will have to use electricity and to keep paying continuously increasing energy costs. Even as people continue to try and conserve, the rates will rise. Why could we not offer homebuyers the option to choose a more economical energy source, while still drastically improving our environmental impact by just building more energy-efficient dwellings?”

Given the mounting costs of electricity, Tarry says consumers should be better educated about the most energy-efficient appliances possible, including their air conditioner. “The days of the 13 SEER air conditioner need to end soon, because people won’t be able to afford to cool their homes in the summer,” Tarry notes. “We’re hearing it more and more—people having to make choices of when they do the laundry and run the dishwasher, and deciding how hot and humid it needs to be before they turn their air conditioner on.”

Tarry also worries about the efficiency of heating purely with electricity. “If you’ve got a furnace that’s properly sized for the home and that is running at 96% efficiency, when you replace it with electricity, there’s the question of where that electricity is being generated from. What happens when the sun isn’t shining and the wind isn’t blowing? And regardless, you’re looking at an approximately 40% line loss from where electricity is created to where it’s delivered.”

Like Reid’s Weatherston, there needs to be flexibility, Tarry says. “You don’t want to end up oversizing your equipment, even if it’s fully modulating,” he notes. “Our company’s homes use high-performance electrical air-source heat pumps in the shoulder season and natural gas for the winter days when it gets really cold. You don’t want to try to take the air-source heat pump all the way down to those -30C days, because then it has to be sized so that it can handle the entire home at that load, so it would probably have to be a bigger, more expensive system than you necessarily need.”

The Province, however, is trying to ease the transition, notes Meredith Renwick, a spokesman for the Ministry of Energy. “Natural gas will continue to play a critical role in the energy mix in Ontario, even as our Climate Change Action Plan (CCAP) supports people and businesses in shifting away from conventional fuels by undertaking initiatives that include investing cap-and-trade auction proceeds into next-generation clean technologies,” Renwick says. “The CCAP will encourage the use of cleaner, renewable natural gas in industrial, transportation and buildings sectors, the province’s biggest sources of greenhouse gas (GHG) emissions. The province’s investment will help reduce GHG emissions and help offset the cost to consumers of introducing renewable natural gas. For example, the CCAP announced $100 million in funding over four years to support a new Renewable Natural Gas initiative.”

Bruce Manwaring, manager at Enbridge Gas Solution, stresses the need to keep the fossil fuel a vital part of the future energy supply, while evolving its carbon content. “We believe that greening the natural gas grid is a more cost-effective, resilient and responsible pathway to meet home energy needs,” says Manwaring. “This is the approach of leading jurisdictions such as British Columbia, California and Germany. The 76% of Ontarians who use natural gas for home heating will have to bear conversion and ongoing energy costs. Converting a home from natural gas to electricity would cost about $4,500, and the heating costs would triple—increasing by roughly $2,000 each year.

“We believe that Ontario’s natural gas system can continue to be a solution well beyond 2030,” says Manwaring. “It’s the most reliable, affordable and abundant energy source for consumers, and if it is used responsibly as part of an overall strategy, it can benefit Ontarians economically and environmentally.”

Building the Infrastructure

Another pressing question surrounds the degree to which the provincial electrical network needs to evolve in order to accommodate the grid that will be required by the Action Plan. “We’re lucky as it is if we can get Hydro One to have some of these Net Zero projects be able to use the grid for their battery when they come on line,” says Tarry.

“One of the things we’re all looking at right now is the link between homes and the power grid,” notes McBurney. “When we start putting PV (photovoltaic) panels on roofs, how would they connect? How would the metering system work? There are lots of players involved: there’s Ontario Power Generation, Bruce Power and others who produce the power; there’s Hydro One responsible for transmission; and then there are the about 70 local distribution companies like Ottawa Hydro who connect to commercial and residential customers. This whole system is managed by the Independent Electricity System Operator and regulated by the Ontario Energy Board. And, as far as I know, how to connect individual homes as power generators to the grid is still being figured out, let alone what a decentralized grid with theoretically millions of power generators will look like.”

The Ontario government accepts that there are hurdles to cross. “At the regional level, the integration of Electric Vehicles and electrification of mass public transit, and other forms of fuel switching, such as shifting from natural gas to electric-power heat pumps, could increase peak demand requirements and have an impact on the adequacy and reliability of the regional transmission and distribution systems—especially in urban centres,” notes the Ministry of Energy’s Renwick. “In addition, electrification can alter the profile of the demand and could impact the needs and solutions at the distribution and regional level. Transmitters, the Independent Electricity System Operator and local distribution companies are looking at ways to help manage and address these potential implications.”

Two-Way Traffic

While there will be huge electrical energy draws in the near future that must be provided for—Go Transit electric train conversion, the Eglinton Crosstown LRT project in Toronto and managing the growth of personal EVs, to name a few—the possibility of tens of thousands of Ontario homes generating their own electricity creates new issues entirely.

“The increased penetration of distributed energy resources (DERs) could have an impact on the distribution and transmission systems,” Renwick explains. “Traditionally, distribution and transmission systems have been designed to deliver power one way to loads. Increasing levels of distributed energy resources can lead to bi-directional power flows that the electricity system was not initially designed to accommodate. This can lead to operating and safety concerns. The total amount of DERs that can be integrated into the distribution system can depend on technical constraints on the transmission and distribution equipment.”

Expect significant investment from the Province to accommodate the required alterations and expansion. And that’s something that will likely “come at a cost to the public—meaning more increases to the average family,” predicts Weatherston. “To date, it has been a challenge in many areas to be able to offer a full off-grid application confidently to buyers with existing restraints on the grid. Given the timelines of the proposed changes, perhaps more developers will start looking at district energy or other forms of energy production to provide to their communities in an attempt to avoid the frustrating processes currently in place.”

Lingering Questions

“A concern shared by many in the industry comes back to affordability of new homes in the marketplace,” says Weatherston.

One of those added building expenses involves a mandatory electric vehicle garage charger. “To rough in a 240V, which is the same sort of outlet as for an oven or dryer to a garage, is one thing. But to require installation of a charger—and the homeowner might not even have an electric car—is different,” McBurney notes. “There are still lots of questions.”

Among those questions is whether the manpower will exist to support many of the Action Plan initiatives. “Building more efficient homes needs to take place, but it needs to be done in a manner that allows the industry time to understand how to build the homes and educate the trade force building them on the best practices,” says Weatherston. “A fundamental piece that the government needs to address is training and the declining trade base. We can inject large amounts of money into the housing market—new or retrofit—but if you do not have qualified Energy Advisors, certified technicians and trades to perform the work, we risk unintended consequences.”

OHBA hopes to supply continuing input with respect to the rebate program for high-performance homes, as well as the building code changes en route to Net Zero small buildings by 2030, notes Stephen Hamilton, OHBA Manager of Government Relations. “That’s where most of the question marks remain, as we work through the traditional building code process while making sure there’s some flexibility in terms of how you meet those objectives,” says Hamilton. “It relies on very technical details to be ironed out in terms of how the building is constructed.”

There is, however, a concession that home builders, like others around the globe, will have to bite the bullet, given the bigger picture. “Everybody and every sector in Canada—indeed, the world—is going to have to come to grips with the costs and changes required to mitigate climate change,” says EnerQuality’s McBurney. “I would never tell builders, ‘Hey, it won’t cost that much.’ Who am I to say that? Who is the government to draw that conclusion? There are real costs to doing things differently—in our case, building higher-performance homes—but the climate change train has left the station and we’re not going back. So now it’s a case of determining the best mix of policies, programs and regulations that are going to get us there.”

Reid’s Weatherston accepts the challenge, but also cites cautionary ground moving forward. “I do get the sense that most progressive builders understand that as an industry we need to change and evolve,” she says. “We need to address the impact of climate change, to look at our building practices and find the cost-effective solutions that improve the quality of our homes. My concerns relate to builders that are reluctant to change and will take short cuts to meet code changes, or that we lack a trade force that is trained to address concerns early on and fix them. It would be great to build high-performance homes for all buyers; to give them the very best in comfort and efficiency. But there are a great deal of external factors that need to catch up and help the industry—i.e. financial institutions, appraisers and real estate. If the savings of buying these homes are not recognized, then we are just building homes that buyers cannot afford to buy, because the value is not being recognized by the other institutions to help the transition.”

OHBA’s Hamilton also recognizes the importance of educating consumers and other stakeholders at a time when home prices continue to escalate. “I believe there are real opportunities in terms of consumer disclosure and transparency that will change the way homebuyers consider their housing choices,” Hamilton says. “There are 4.8 million existing homes built in Ontario in a period where there was little or no consideration about a home’s energy performance. A large percentage of these houses still have no insulation and poor performing old heating systems. In today’s market, many buyers may not be completely aware that their purchase decision could leave them with unaffordable monthly heating and electricity bills and a less comfortable home. Having a mandatory standardized rating system is a game-changer that equips homebuyers with the tools to make more informed decisions.”

In the interim, the Province reminds residents and industry of the bigger picture. “Ontario introduced the Climate Change Action Plan because we know that we can’t afford to wait any longer to take action,” says Renwick. “But fighting climate change also presents a major economic opportunity. According to the U.S. State Department, expansion of the global green economy is forecast to be six times greater than the technology boom of the 1990s—which saw the growth of the internet, the first smartphones and other breakthroughs. And as researchers, entrepreneurs and start-ups rise to the challenge, Ontario will be well-positioned to export low-carbon goods and services to markets around the world.”