Home energy retrofits: part one
I was in the budget lock-up in Ottawa back in 2009, when the feds announced a home renovation tax credit as part of the stimulus package, and one of my first thoughts was “kitchen reno”. Months later we had a nice kitchen upgrade to enjoy as our contribution to getting the Canadian economy back on track. I’m basically the marginal consumer that policy seeks to influence.
These days I’ve been working on a paper on energy poverty, climate change and household energy efficiency. Living in BC, where energy is cheap, and our house only about 20 years old, historically there did not seem to be much incentive to do any upgrades. But prices for energy are on the rise, particularly the proposed rate hikes coming from BC Hydro that would almost double the price of electricity by 2018 compared to a decade earlier.
At the early stages of writing both BC’s and the federal retrofit programs were closed, over-subscribed by eager homeowners. So when the BC government a few months ago announced new funding for its LiveSmart energy efficiency program, and then the feds announced new funding for its ecoENERGY program, I decided to put my house to the test.
It starts with a home energy audit, half of which is covered by the BC government (my share was $150). I went with CityGreen, a Vancouver based non-profit that does energy audits, and the next week I had the audit done. This kind of doubled as research for me, as I got to pick the brain of my auditor for the two hours he was in my home. The audit draws on modeling done by Natural Resources Canada and you get back a standardized NRCan report that lays out your baseline and suggested improvements.
Overall, it is an enlightening process â€“ like most households we have typically just paid our bills but with no idea what energy services consume how much, and how that situation could be improved. Many of these improvements can tap into various rebates and incentives from the BC government, federal government, BC Hydro or Fortis the gas utility (this is where things start to get complicated).
The door blower test, where they suck air out of the house to show where the leaks are, was particularly eye-opening. Whereas I had been thinking that my windows might be upgraded, it turns out that the gains from upgrading windows that are already double-glazed are small relative to the cost. Instead, it was the wee gap between the windows and the frame of the house that was losing air. Our stairs also proved to be surprisingly leaky seeping cold from the basement in winter. So this portion of the upgrade involves me doing a bunch of caulking, adding some extra attic insulation and closing off any other sources of air leakage.
Space heating is the next, and bigger, item, typically representing the biggest source of energy consumption in the home. Like a lot of homes in BC, my place has electric baseboards as the prime heating source (plus a gas fireplace). While a lot of energy efficiency folks frown on electric baseboards, my auditor thought they were fine because they can heat individual rooms as needed, rather than always the whole house, as is the general case with forced air and water-based systems. I was interested in electric heat pumps as an alternative and was recommended to install an air-source heat pump, which is about three times more efficient that electric baseboard.
This is where it gets a bit more tricky. The cost-benefit of a heat pump, which is sweetened by a $1,000 grant from BC and $500 from the feds, is uncertain. I’m in the process of getting estimates, and there is uncertainty about how well it will perform in terms of cutting my electricity bill. Back of the envelope, I figure an out-of-pocket cost of $3,500 to $4,000 will have a payback within a ten year time frame, so the federal and BC rebates do indeed affect my decision on the margin.
It is not all about costs and benefits. Electric heat pumps are appealing to me as I aspire to eliminate carbon emissions from the house, which in my case means cutting out the gas fireplace as a source of heat (and perhaps more challenging, as a cozy spot to read in the winter). On a straight up financial basis, with gas costing about half of electricity per unit of energy, I ought to be just replacing the fireplace with a more efficient version. But the emissions would haunt me. The federal eco ENERGY program is problematic as it promotes natural gas conversions for space and water heating, which may make sense on some pure energy efficiency level, but not if GHGs are taken into account.
There are other rebates for appliance replacements, but none of which are really cost-effective for me. The biggest improvement would be from replacing the 15-year-old fridge with a newer, more efficient model. But I’m told that the compressors in the new fridges blow out within ten years, and when you factor in lifecycle GHG emissions I’m not convinced that replacing the fridge makes sense economically or environmentally.
So that is where I am at, with most of the work ahead of me and decisions to be made about contractors and such. Our rating on the EnerGuide scale was a 72, and we have the potential to get up to 81 if we make all of the improvements, and that would put us among the more energy efficient homes out there. I’ll write up part two when I get done this next phase.
I added an air source heat pump and replaced a low efficient forced air furnace at the same time. Unfortunately with the high cost of electricity I cannot afford to use it in the winter, rather I rely on the new furnace. The incentive of $1,100 for the conversion was consumed in just a few months.
It still works okay when the outside temperature is over 14 centigrade, but not below. So Spring and Fall are fine, but it will never hit a point of break even.
If I could do it over again, I would not install one of these units. (And I certainly wouldn’t listen to the hype.)
Thanks, Peter. Nice reality check on the heat pump.
Since I posted this I’ve received a few quotes and at best I’d be looking at a break-even in about ten years, depending on the path of electricity prices and how well the heat pump actually worked (and after BC rebate of $1,000).
So I’m feeling it is not worth the uncertainty associated with the job plus the hassle and upfront cost of putting it in. I may change my mind but for now, a more tightly sealed status quo is looking to be the way we go.
Regarding barriers to investment in retail electricity conservation, you might be interested in my paper “Penalizing Consumers for Saving Electricity” that I got published in the Economics Bulletin: http://www.accessecon.com/Pubs/EB/2010/Volume30/EB-10-V30-I2-P108.pdf