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Do we need energy audits?

Gord Miller, Environmental Commissioner for the Province of Ontario, thinks we do


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June 11, 2012 by Robert Koci

By  Gord Miller, Environmental Commissioner for the Province of Ontario

This article was recently sent to Canadian Contractor magazine. In it, author Miller suggests that it is time to require all homeowners to have their homes energy audited so buyers have a better understanding of the true value of the home. Miller suggests that energy audits would encourage homeowners to improve the efficiency of their homes to increase their value.

What do you think? Is it time for mandatory energy audits?

Many people looking for a place to live are being hit with sticker shock. Prices for condos and houses continue to rise across the province, often leaving buyers struggling to make their mortgage payments. Imagine their shock when they get hit with a ‘second bill’ for their purchase, the cost of the energy their home consumes.

That ‘second bill’ can add up to a lot. The most recent Statistics Canada data (2009) shows the ‘average’ Ontario household spent $2500 a year on fuel, electricity, and water, but some buyers will learn to their dismay that their houses are far from average. Differences in technology, building materials, and construction practices mean that houses vary widely in their energy consumption, and houses that use more than twice the average are not uncommon.

I recently released my Annual Energy Conservation Progress Report that tracks Ontario’s efforts to conserve energy. The 2011 report is an in-depth look at the government’s conservation promises contained in the Green Energy Act (GEA), passed three years ago. One of the statutory commitments that will be familiar to homeowners is the requirement for home energy information – an energy audit or rating – at the time of sale of a property.   This audit, along with tough efficiency standards for appliances and a ban on inefficient light bulbs, was part of the government’s plan to encourage what it called a ‘culture of conservation’.

Three years ago, it looked like the government would give potential homebuyers the information they need to find out whether their new homes are energy efficient, or energy sieves that leak heat from windows, doors and poorly insulated walls and roofs. Despite revisions to the legislation to accommodate realtors’ concerns, the government still has not acted.  Instead of fostering a culture of conservation, the Province has left that culture more of an orphan, and the mandatory home energy audit was the first of the Act’s promises to be abandoned.

An energy rating recognizes that high efficiency houses should be worth more.  By contrast energy sieves should have a lower value because they mean high energy bills year-after-year. They should be worth less to reflect that ‘second bill’ – the higher annual operating costs that the unfortunate owner will incur.  An energy rating would alert buyers to this and let them factor this into their purchase decision.  It would also provide people with assurance that they could recover any investment in efficiency upgrades with a higher resale value when they sell.

As Environmental Commissioner, I believe the public interest is not being served by this inaction on home energy audits. Consumers’ interests are being harmed by the lack of transparency related to energy use in the home. The government’s stalling is puzzling. At the same time the GEA was passed, legislation called the Energy Consumer Protection Act was created. According to the government, this Act’s purpose is to protect consumers when they sign a natural gas or electricity contract for their home by providing transparency through cost comparisons and plain language disclosure.  The government requires such disclosure by home energy retailers but not for the purchase of the home itself.

Other jurisdictions are willing to protect homebuyers.  The European Union requires its member states to create mandatory energy labelling and disclosure laws. Austin, Texas requires an energy audit be done prior to a purchase, and the capital region of Australia requires energy disclosure for all existing homes at the time of sale.

So until the Ontario government requires sellers to provide homebuyers with the energy efficiency information they need, it’s left to you, the prospective purchaser, to ask the important questions. You can start by letting your realtor know that having information on a house’s energy consumption is a high priority for you. If you want the most detailed information, schedule an energy audit by a professional.  The audit cost is quickly negated by the on-going energy savings realized by choosing a home with a better energy rating.

Mandating home energy audits prior to sale would protect consumers and the environment. The government needs to find the courage to act in the interest of consumers. If the Minister of Energy won’t do it, maybe it’s time for the Minister of Consumer Services to get involved. It’s fine to talk about a culture of conservation but who will provide the legislation so that the values and behaviours of such a culture are widely shared by its members?

Gord Miller is the Environmental Commissioner of Ontario, the province’s independent environmental watchdog appointed by the Legislative Assembly.  The Commissioner monitors and reports on compliance with the Environmental Bill of Rights, the government’s progress in reducing greenhouse gas emissions and its actions to achieve greater energy conservation in Ontario.


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8 Comments » for Do we need energy audits?
  1. Bruce MacKinnon says:

    Blaming the consumer again are we? Sure you want mandatory inspections and repairs done. This is just another potential source of income for the tax starved provincial government which has jacked up our hydro rates and allowed higher natural gas rates, all in an effort to pay for the “Green energy” initiatives.

    You want us to do mandatory inspections? Give us serious tax credits to make our home energy efficient and to offset the costs of ever-increasing contractor rates. Contractors are so busy now that the “Fly-by-night” guys are scalping the market again.

    You want to make energy audits? Fine. Certify every existing contractor so that they are qualified to do the work involved, lest the homeowner get scalped for poor work you demand we do.

    News Flash—- Few of us homeowners can afford Mike Holmes or his level of expertise, so certify the rest or we are just being herded into spending money, again.

  2. Each time I have bought a home, I just asked for 12 months of utility bills…provided at no cost. So justifying a $350 expense for an “audit” to learn the same information is a stretch.

    Most sold homes and mortgage refinance applications do have a Property Inspection done, cost about $250-300 depending on square footage. The purpose of this inspection is to uncover problems that would have serious consequences later for the buyer or the banker.

    Now…if all homes [ when sold or remortgaged ] had to meet the latest national building code standards for energy efficiency at that time [HVAC, appliances, lighting etc] , then there is a valid reason to do the audit.

    Without an enforcing standard with penalties for compliance, there is little reason to do anything by anyone. Start with a good reason Why?, and then things seem to follow along much easier.

    Success,
    DaveZ

  3. Robert Koci says:

    I have to admit, though it would give contractors yet another little sideline business, I see it more as another intrusion into an already bureaucrat-heavy industry.

  4. John Stephenson says:

    Obviously mandating an energy audit on all house sales is just the government sticking their noses in where they are not needed. What next mandated designate substance reports, proof of on going maintenance, and hey what about the neighbours. Maybe we need to get the RCMP to do security checks on all your neighbours.

    There is a bit of buyer beware in everything one does. House purchases are no different.

  5. Energy audits are a good idea. It is very reasonable that a home owner, about to embark on a large renovation project, would have a pre/post-renovation audits done. We recommend it to our customers. It is an opportunity for homeowners to see what impact the renovation will have on their energy use. I like the blower door test and the third party recommendations. They can usually be integrated into the sale, especially if the recommendations made by the energy audit happen to be what we suggested.
    Unfortunately, like good tradesmen, good energy auditors are difficult to find and the lack of grants will reduce their numbers further.
    Requiring an energy audit for a home sale is not necessary. It adds a burden and additional costs to the process that is usually can be handled simply with utility bills. It would add another hand out in an already overly complicated, expensive process. A potential purchaser can make the sale conditional on an energy audit.
    Adding the requirement would also provide purchasers with buyer’s remorse, lack of life skills or who have failed to do the necessary research into the purchase of a home, the opportunity blame someone else.
    (I didn’t mention people who watch too much home improvement TV on purpose.)
    Should homeowners and renovators embrace energy audits? Absolutely.
    Should they be mandatory? No way.

  6. Rob Koci says:

    I agree Richard. Audits are a good idea, one more legislated requirement is a bad one.

  7. Thanks for share information . Torple Energy specialize in the NATHERS energy ratings (National Housing Energy Rating Scheme) or HERS energy rating for short.

  8. Michael R says:

    Considering most homeowners are not energy auditing experts, I don’t see how the buyers beware comment holds much merit, of course if a house air quality is noticeably uncomfortable, you probably wont buy it, but then again, if the house is comfortable you might not realize that the energy systems that are making that house comfortable are heavy duty energy hogs… This is why energy audits are valuable, you can see how well your home would perform as well as how much money is required to have it perform at that level of quality (not an easy thing to determine for the average person).