Canada’s housing stock consists of 15.8 million dwelling units1. NRCan estimates that 85-90% of the housing stock expected to be in place in 2030 is standing today, and that more than 67% of that stock was built prior to energy codes. Space heating is responsible for 64% of the energy use and 66% of the GHG emissions of Canada’s housing stock.
According to research, achieving a carbon-neutral built environment by 2050 will require deep energy retrofits to 2-3% of the building stock annually2. Current Canadian rates are approximately 1%3. To meet GHG emission reduction targets, some countries have committed to retrofitting 3% of their country’s stock annually4. The Government of Canada proposes to provide $2.6 billion over seven years to help homeowners improve their home’s energy efficiency.5
NRCan has been tracking retrofits for decades, maintaining a database of homes that have undergone energy audits and been evaluated using Canada’s official EnerGuide Rating System (ERS)6. The database contains before and after audit data from more than 1 million homes that undertook an energy retrofit over the last 25 years. Many of these retrofits took advantage of federal, provincial, or utility incentive programs. HVAC system replacement and piecemeal envelope improvements (windows, attic insulation, and incremental air-sealing) proved most popular. On average, each retrofit achieved an annual energy savings of 21%. While impressive, these savings fall short of what research has shown to be necessary to decarbonize the housing stock7 2.
To unlock deep energy and carbon savings, comprehensive retrofits that tackle the building envelope are necessary to reduce heating demand. Despite incentives available for such measures, these retrofits made up only 4% of projects in the ERS database.
There are several reasons why deep energy retrofits remain so rare. They are expensive and they carry both financial and technical risks. Often, deep energy retrofits have been undertaken from the interior and have required a full gut renovation, a major barrier given the disruption to the occupants’ lives. Exterior retrofits can dramatically lessen this disruption, which can be further reduced by using off-site fabricated components that shrink the on-site labor required.
Energiesprong—an initiative that originated in the Netherlands—has completed thousands of net-zero energy retrofits from the exterior using prefabricated panels and mechanical pods. Solutions have been standardized, and automation is now being exploited to further reduce costs. Although PEER is loosely modeled on the Energiesprong approach, the Canadian context varies in some important ways. Not only is our climate colder, but we have much more variability, with 6 ASHRAE climate zones throughout Canada. In central Europe, builders benefit from high population density, so panels can be produced in a few central facilities and shipped to anywhere in the country. Due to our population density and immense geography, it’s hard to imagine one panel fabricator serving more than a few markets in Canada. In the Netherlands, the building tradition tends to be masonry and concrete, whereas here light wood framing is used almost exclusively for residential construction. Unlike the Netherlands, most residential construction in Canada has a full-basement, complicating insulating and air sealing of the whole building from the exterior. The cost of energy—particularly gas—is high in the Netherlands, which makes the business case to retrofit and electrify more compelling. Financing for these projects in Canada may have to piggyback on other capital upgrades or rely on government assistance.
Finally, Europe adopted off-site fabrication in a major way to rebuild after the Second World War. In Canada, prefabrication is less prevalent, although there are many wood-frame prefab facilities (component fabricators) that currently build trusses and some that build walls who could provide base panels. Similarly, modular homebuilders are well set up for this work. There is also a growing list of high-performance panel fabricators catering to the Passive House new construction market, across North America (see Passive Goes Prefab). These suppliers would be ideally suited for this work as well.
At the outset of the PEER project, the researchers convened an industry working group (IWG). The group is composed of general contractors, modular builders, panel fabricators, manufacturers, building capture and building science consultants, and energy advisors. We developed an Industry and Business Strategy in consultation with this group that conceives of the various industry roles in such projects. The three main categories are:
manufacturers, who produce base panels;
fabricators, who finish base panels in a secondary shop and install them on site; and
contractors, who are responsible for site work
and contracting.
Most of the manufacturers we spoke with are uninterested in producing custom, finished panels. But by supplying base panels, they can continue doing what they’re very good at. There may be opportunities for them to offer some added value such as fluid-applied air and weather-resistive barriers (AB/WRB) in the panel factory. Some manufacturers may be positioned to do this already and, with little investment, could adapt their process to serve this market (i.e., modular builders).
Panel fabricators are accustomed to customizing their offerings and installing membranes and even windows and siding. They may take a manufactured base panel and add layers, or they may elect to produce finished panels from scratch. General contractors (GCs) can set up shop to become panel fabricators with minimal investment. Although very large GCs are doing this work in the Netherlands, we see a more geographically distributed model with a mix of small, medium, and large players making sense across Canada, especially in the North and in areas of lower population density.
Social housing is a logical catalyst market. Much of Canada’s social housing stock—roughly 550,000 units or about 3.5% of the housing stock—was built in the 1970s and ’80s, when energy efficiency standards were non-existent. Many of the units have experienced years of deferred maintenance and repairs to building envelope components and require significant capital investment to replace the original windows, siding, and roofing. With the high costs associated with displacing or relocating tenants to undertake interior retrofits, approaches to rapidly retrofit from the exterior are attractive to housing providers. The buildings in this sector tend to be simple and architecturally similar so they lend themselves to an assembly-line approach. Finally, housing providers take a long-term view to the ownership and management of their housing portfolio, which is critical for realizing returns on such investments.
