Introduction – Canada Needs a Home Energy Action Plan

Canada is about to spend billions on new oil sands projects, pipelines, nuclear and fossil-fuel power stations, hydroelectric dams, solar projects, and wind farms. But as we prepare to generate more energy, we can all agree it makes sense to save energy first.

Energy efficiency provides Canada with a huge opportunity. Investing in energy efficiency will create jobs, generate long-term economic growth, and help Canadian families save energy and reduce pollution, now and in the future.

A five-part Home Energy Action Plan, focused on growing the market for energy-saving home retrofits, is an ideal strategy ready for immediate implementation.

This plan:

  • Creates jobs immediately in all communities across Canada, reduces government deficits, and improves the affordability and quality of life for Canadian families including lower energy bills, reduced pollution, and healthier, more comfortable homes (Part 1)
  • Builds a solid foundation for innovation and private sector growth by completing the transition to an improved national home energy rating system (Part 2) and implementing universal labelling of homes at time-of-sale (Part 3)
  • Supports long-term job creation and grows the market for home retrofits by accelerating the push for innovative financing options (Part 4), and sparking private sector investment in a new generation of energy-saving services (Part 5)

There is widespread stakeholder support for each part of this Home Energy Action Plan. And with much already accomplished, Canadian governments are well-positioned to successfully implement this five-part action plan.

The keys to success are:

  • Maintain Canada’s world-leading capacity to deliver home energy ratings, thereby making it easier for governments to implement new rating system applications, such as universal labelling of homes at time-of-sale (Parts 2 and 3)
  • Strengthen stakeholder confidence in governments’ long-term commitment to Canada’s home energy saving industry, thereby making it easier for the private sector to invest in innovative services that create jobs and grow the market for home retrofits (Parts 4 and 5)

To maintain existing capacity and strengthen industry confidence, we recommend a three-year government commitment to continue home retrofit incentive programs (Part 1).

Part 1. Home retrofit incentives

The global economy is struggling and Canadian governments want to create jobs and build a foundation for growth. A three-year commitment to continue popular home retrofit incentive programs is an ideal first step, because it:

  • Creates jobs immediately in all communities across Canada, reduces government deficits, and delivers long-term benefits for Canadian families including lower energy bills, reduced pollution, and healthier, more comfortable homes.
  • Maintains the existing capacity and industry confidence required to build a solid foundation for private sector growth of Canada’s home energy marketplace (Parts 2 through 5).

There are many advantages to renewing home retrofit incentive programs for an additional three years:

  • create jobs — now and over the long term — in all communities across Canada
  • help families save energy, lower their energy bills and protect the environment
  • reduce government deficits because retrofit incentive programs generate two dollars in tax revenue for every dollar invested by the government
  • stimulate the economy at no cost to government
  • improve health and comfort of Canadian homes
  • reduce pollution and health-care costs
  • combat the underground cash economy in basement renovation services
  • protect families, communities and Canada’s economy from rising energy prices
  • generate economic activity in the same communities where homeowners live, creating local jobs and business for tradespeople, contractors and suppliers
  • support innovation and private sector investment in Canada’s home energy saving industry

Part 2. Next generation rating system

The federal government is scheduled to launch a new home energy rating system in December 2012. The new rating system is being developed in collaboration with provincial governments, industry and other stakeholders. Governments plan to use the new rating system to support labelling, incentives and building codes.

By providing improved access to standard tools and data, the next generation rating system will support a growing ecosystem of innovative home energy saving services, including:

  • interactive online applications that let users explore home energy saving options using their own home’s certified rating data
  • renovation solutions, diagnostic services, and financing options that draw on the detailed, house-as-a-system data generated by home energy ratings

Private sector investment in these new services will make it easier for families to save energy, and in turn grow the market for home retrofits.

We recommend that the next generation rating system be designed and managed to prioritize private sector development of innovative services. This ensures success for Parts 3, 4 and 5.

Part 3. Universal labelling

Canadians believe consumers should have the information they need to make informed choices. Sometimes the information we need is invisible, or hard to collect, so Canada has developed special labelling programs. For example, the ingredient and nutrition labels found on food packaging help consumers make informed choices.

Energy efficiency is an invisible and poorly understood feature of our homes. Labelling the energy efficiency of new and existing homes at time-of-sale gives consumers access to standardized energy efficiency information when they shop for a home. Universal energy labelling enables consumers to make informed decisions. Businesses can then respond with better energy-saving products and services, and the demand for home retrofits will grow.

Universal labelling of homes at time-of-sale will support private sector investment in innovative home energy saving services in two important ways:

  • Secures a critical mass of high value customers for next generation home energy ratings and related services
  • Provides a stable, long-term marketplace for home energy ratings and related services, allowing the private sector to invest in the future

Universal labelling is critical to the success of Canada’s home energy saving industry. It will accelerate the private sector investment required to create jobs and grow the market for home retrofits without the continued need for ongoing government incentive programs.

We recommend that all provincial governments implement Part 3, universal labelling of new and existing homes at time-of-sale, beginning in 2013, supported by:

  • Provincial adoption of universal labelling requirements
  • Federal government assistance

Part 4. Innovative financing

Many families need upfront financing to make their homes more energy-efficient. And many homeowners resist making home retrofits if they plan to move before they have recovered their costs through energy savings, or before they have repaid their retrofit financing.

To make it easier for families to save energy, innovative financing options are emerging, including:

  • energy improvement loans and mortgages, and utility on-bill financing
  • long-term payback periods that allow retrofit payments to be continued by the property buyer after a home is sold

Innovative financing will go hand in hand with universal labelling of homes at time-of-sale, because universal labelling will:

  • increase consumer understanding of home energy efficiency
  • increase potential value of energy-efficient and energy-retrofitted homes
  • help lenders establish the resale value of energy efficiency features
  • motivate lenders to offer a growing range of innovative financing options

Innovative financing will also go hand in hand with the transition to a next generation home energy rating system.

We recommend that Canadian governments support Part 4, innovative financing, by:

  • providing enabling legislation (where necessary) and mobilizing private sector participation
  • acting on Parts 1, 2, and 3 — committing to a three-year renewal of home retrofit incentive programs, completing the transition to a next-generation rating system, and implementing universal labelling

Part 5. Private sector investment

Canada’s home energy saving marketplace includes thousands of private sector businesses: renovators, retailers, manufacturers, wholesalers, lenders, energy providers and energy auditors.

To support private sector investment in innovative services, governments must provide the home energy saving industry with consistent, long-term policy support, just as it does for other valued sectors such as the automotive and high-tech industries.

With the right tools and supportive government policies, including a next-generation rating system and universal time-of-sale labelling, the private sector will invest in a growing range of innovative services including:

  • interactive online applications that let users explore home energy saving options using their own home’s certified rating data
  • renovation solutions and diagnostic services that draw on the detailed, house-as-a-system data generated by home energy ratings
  • innovative financing options that make it easier for families to afford energy retrofits

Private sector investment in these new services will enable Canada’s home energy saving industry to:

  • create jobs in all communities across Canada
  • make it easier for families to save energy and protect the environment
  • grow the market for home retrofits without the continued need for retrofit incentives

We recommend Canadian governments support Part 5, private sector investment in innovative home energy saving services, by acting on Parts 1, 2, and 3 — committing to a three-year renewal of home retrofit incentive programs, completing the transition to a next-generation rating system, and implementing universal labelling.

Conclusion – Immediate action required

We strongly recommend that Canadian governments adopt this five-part Home Energy Action Plan to grow the market for home retrofits.

Home retrofits are long-term improvements to Canadian homes that improve the affordability and quality of life for all Canadian families. This, in turn, attracts the world’s top talent and new private sector investment in jobs and growth.

Immediate action is required to make this Home Energy Action Plan happen. Canadian governments need to take the first step by committing, in their upcoming 2012 budgets, to a three-year renewal of home retrofit incentive programs. The rest will follow from there.