Sorting through the confusion around energy efficiency ratings
Many energy efficiency programs are delivered, not by the government, but by industry associations and even private delivery agents
January 9, 2019 by Paul Duffy, M.A.Sc., P.Eng.
This article first appeared in the Jan/Feb 2018 print edition of Canadian Contractor.
Are you confused by the proliferation of Energy Efficiency and Environmentally Appropriate housing labelling programs? You are not alone. The quickening pace of technical innovation, new materials and systems, along with code changes, and morphing consumer demands has left many builders wondering, “What’s next?”
Many builders, particularly the ones with more grey hair than not, remember programs like R-2000 with their lofty predictions that “one day all houses will be built this way” or “one day this will be Code!” Clearly, these predictions didn’t come true. Or did they?
While it is true that relatively few houses go through the formal process of labeling (unless there is some sort of government grant or utility incentive involved) many of the technical components of super energy-efficient construction have become the norm. Some examples include…
- Higher levels of insulation
- Better windows
- More air-tight construction
- Advanced/high efficiency mechanical systems
- Mechanical ventilation systems
You would be hard pressed to find any homes being built in Canada without most (if not all) of these features. The exact menu of preferred features varies by region and according to the availability of products and/or proximity to certain urban amenities and utilities. In most regions, builders on rural sites are more likely to be pushing the envelope on “off the grid” type features.
As a contractor, if you are trying to lead the pack, or get out in front of innovations, where should you be focusing your energy? Here are a few things to consider.
Several provinces have taken to telegraphing where the Code is going in the years ahead so that builders can experiment and get ready for Code changes when they arrive.
- In Ontario, the last two Code cycles have not only included the new provisions pertaining to current requirements, but also, how those requirements will change approximately five years from now. The Ontario Building Code (OBC) 2022 Code changes have already been released.
- B.C. has produced its new “Step Code” containing no less than five incremental sets of requirements: steps on the path to greater energy efficiency. The notion is that a certain percentage of builders will choose to build homes above the basic level, with guidance from the Code experts as to what constitutes the next “step.”
- In other provinces, the vision is more traditional — relying on known “brands” like R-2000 and Energy Star to set forth a package of requirements that goes above Code in what constitutes a step up from Code minimums driving new levels of energy efficiency. The evolution of technical standards for these programs has become a source of confusion for many builders. The technical standards for an Energy Star home is not the same now as it they were back in 2010 or 2005. So as a consequence, the meaning of the Energy Star label on a home becomes confusing.
Thus Code change, above-Code programs and labelling are frequently tied together. In fact, there are several places where various provincial Codes specifically mention some aspect of an above-Code program as a compliance alternative. For example, a registered R-2000 or Energy Star house might be deemed to comply with the energy provisions of the Code, etc.
Is this a problem? The short answer is that a lot of people are not sure. You might ask, if the government writes the code and the above-Code program was developed in conjunction with the government, what’s the problem?
Start by considering that the folks who write the Code are primarily responsible for public safety, while the folks who design energy programs are primarily responsible for energy policy. When you think about this, you can begin to get some idea of how this alliance might take us in some weird, if not undesirable, directions. If the policy folks are pushing energy efficiency, then why not require that all appliances in the home be energy efficient (say, Energy Star labelled) appliances? But then, when did it ever become the mandate of the Building Code to tell consumers what computer or kitchen appliances to buy? Is that really the role of the Building Code?
Then consider that many energy efficiency programs are delivered, not by the government, but by industry associations and even private delivery agents who carry out and are responsible for the work. It’s not difficult to imagine situations where the referenced program, and therefore the Code, would default to requiring contractors to be members of a particular trade association, buying group or contract with a particular supplier. Even the more liberal thinkers might have a problem with where this could go.
Finally, there is the issue of who owns these programs and what are their motivations. Often people don’t realize when they are crossing the boundary from a government run and overseen program to a program driven by a private sector business plan with less transparent objectives. It’s worth noting that the names of some of these programs and labels are often very confusing, appearing at first to be aspirational if not even noble objectives, but not always clear as to how the programs are run and where/how they derive funding.
- R-2000 is a program developed by the federal government in conjunction with the Canadian Home Builders Association (CHBA). The feds provide some funding but the CHBA raises other revenues though fees to builders, consultants and others tied to the program. Membership in the CHBA is not a requirement but it is encouraged.
- The Energy Star program was originally developed by the Department of Energy (DOE) in the US. The federal government licensed use of the name and technical requirements of the program and in turn negotiated regional delivery arrangements with “service organizations” across the country. Some are industry associations, others are private companies. There are also arrangements with utilities and others to promote energy efficiency goals under the Energy Star banner. The Energy Star label is used to describe a variety of products that go beyond houses, including so-called “white good” appliances, consumer electronics and other energy consuming products. Each product category is its own program with different financial arrangements and delivery mechanisms.
- The LEED program is one developed by the Canadian Green Building Council, a private organization of stakeholders with interests in energy efficient / green construction. It is self-funded through fees, sponsorships and training revenues.
- The Net Zero Energy program was developed by the Net Zero Energy Coalition and the Canadian Home Builders Association. The program receives major funding from several major sponsors with specific interests in promoting their products and/or their proprietary technologies.
- A number of smaller programs with links to regional associates and private interests including Built Green, Green Globes, and other programs keying on words like Green or Environmental to describe attributes they seek to highlight.
It comes as a surprise to many people that words like Green Building, Net-Zero, LEED or even R-2000 are labels that might have proprietary owners, private sponsors and even copyright protection.
The fact that something might have a proprietary owner, private funding or non-governmental affiliations doesn’t make it a bad thing. What is problematic is when this is not clear, not transparent, and not subject to the same kind of scrutiny we give all private sector claims. The key is disclosure. And when the disclosure is less than well known, the operating assumption has to be buyer beware.
Most home builders are small businesses with limited marketing and name recognition in their markets. The idea of piggybacking their brand on a better known brand or label holds significant appeal. I have heard of several builders who adopt the attitude of building their brand on the credibility of major suppliers, utilities, mechanical suppliers, door and window companies, insulation companies, etc. Their advertising is reminiscent of what I like to call the NASCAR approach — labels and logos scattered liberally across the page in the belief that somehow this builds name recognition or credibility for their brand.
Others focus on one or two key features, unique or premium features in their market, to underscore their commitment to quality. In today’s market, that might be something related to high tech electronics, an indoor air quality package, or something unique like spray foam insulation to set them apart.
Consequently, an energy label — a label adding third-party credibility to the unique product they are building — might have applicability and usefulness to both approaches. But are any of these labels going to dominate particularly in the medium to longer term? That is difficult to answer. The pace of code change is becoming too rapid to predict with any degree of certainty so programs that are above code are even more difficult to forecast. This is leading some builders to question the value of a label.
Others are questioning the value of energy programs. At the core of several rating programs, is an underlying bias against fossil fuels and a bias towards electrical fuel sources. The reasons for the bias are varied, but, often they relate to the belief that electrical energy can come from “non-polluting” or green sources. However, the dollar cost of “green” electricity is quite high. So, while energy savings might be achieved, cost savings are not. It is difficult to justify energy efficiency if the investments in energy measures aren’t at least partially off-set by cost savings.
A growing trend is simply energy rating buildings without necessarily opting into any energy efficiency program. This avoids paying fees for labels, listings, and other services that are difficult to assess in terms of added value.
In the US, where the housing market is even more fragmented than in Canada, there are many more labeling programs available for builders to pick and choose. Faced with a virtual smorgasbord of choices for labeling their houses, the Leading Builders of America (LBA), a group comprised of the top 100 builders in terms of numbers of houses built, have opted to energy rate all their houses. The LBA claims to represent the builders building 80 per cent of the new houses built in the US.
In the US, the rating scheme of choice is the Home Energy Rating Scale — or “HERS” scale for short. Every point on the scale represents a one percentage point change in energy consumption relative to a home built to the 2006 Building Code. Move from HERS 100 to HERS 80 and that represents a 20 per cent saving in energy. HERS 0 aligns with zero net energy consumption.
The rationale for rating your houses in this way is simple; the prescriptive measures in the Code add numerous costs that are not necessarily justified on any particular house in terms of the energy saved. By measuring performance, you naturally focus on measures that deliver the most savings per dollar spent and you logically end up with a more cost-effective, energy-efficient home for your specific site.
Again, the HERS rating scheme is a US initiative. In Canada, the scheme could just as easily be based on EnerGuide ratings, or fuel savings. Michael White, President of RGL Building Consultants, an energy rater who has done thousands of home ratings for the EcoEnergy Program as well as for Energy Star compliance, estimates that in the near future the majority of his clients will be rating their houses specifically for Code compliance not for participation in any energy program. Michael’s team uses Hot2000 software (used for the EnerGuide scale) specifically for this purpose.
John Godden, President of Clearsphere consultants, has gone in a different direction. His team has pioneered using the HERS scale in Canada. He indicates that his client list includes many of the major builders in the Greater Toronto Area, and they are all seeing the need for and benefits of rating their houses for Code compliance regardless of whether they ever receive a label relative to a specific energy program. He points out that, for the last two Code revision cycles, the Ontario Building Code has specifically recognized the HERS software, specifically programs like RemRate and Energy Guage, to evaluate code compliance.
Both Godden and White are active in CRESNET, a non-profit organization aimed at professionalizing and promoting the benefits and skills required to rate houses. While energy programs, home labels and government grants come and go, the skills and tools required to rate houses remain constant and continue to grow. CRESNET promotes training and accreditation related to:
- Computer modeling
- Air tightness testing
- Inspection skills and tools
The world of energy programs may look like it is not going to get sorted out any time soon, but my guess is that the business of rating house performance as a basis for implementing cost-effective energy efficiency is only going to grow. So, too, the need for skilled evaluators and raters, to carry out those assessments, will become an important part of house design and quality control.
ABOUT THE AUTHOR
Paul Duffy, M.A.Sc, P.Eng., is principal and lead consultant of Paul Duffy Associates. He provides strategic management and engineering consulting, specializing in building science and performance improvement. He served as vice-president engineering for Icynene Inc., a building envelope product manufacturer. He was also president of BLP Engineers from 1989 to 2008. Paul can be reached at email@example.com.