I think it would be fair to say that the Alberta building industry is still adapting to the changes that have come from the adoption of NECB 2011 (the National Energy Code for Buildings). Building owners and designers are having to come to terms with a “new normal”. In past presentations I’ve actually shown that for some buildings, NECB 2011 is not a big impact at all but it still fundamentally shifts how a building is designed; since energy models are now basically standard for all buildings. I believe that the new energy code is actually a moment of opportunity to aim for even loftier goals. As our planet only gets hotter and the effects and costs of climate change are being felt by more and more people, I believe we have an obligation to ourselves to not just aim for minimum compliance, but for Net Zero. That jump might seem extreme but I’m hoping to show that it absolutely isn’t a huge leap and that it can make complete financial and practical sense. We should note that the Pan-Canadian Framework on Clean Growth and Climate Change specifies that ALL provinces adopt a “net-zero energy ready” model building code by 2030; this is happening, we’re just talking about doing it sooner rather than later.
Firstly, let’s broadly define what we would need to do to get a commercial building to net zero (or at least partly there; not every building will be able to achieve net zero). Based on our experience, this is what you need to do to have a chance at net zero (in order):
1. Reduce loads in the building by eliminating energy use where you can, and using energy efficient appliances and equipment everywhere
2. Reduce lighting loads by using LEDs, occupancy sensors and daylighting strategies
3. Improve the building envelope, aim for R25-R30 effective walls (can get away with less if you use geo) / R40 roof and triple pane fibreglass windows.
4. Use heat recovery wherever possible (ERVs, drain water heat recovery etc…)
5. Use a geothermal based mechanical system (we’ve shown that it’s very hard to reach net zero in commercial buildings without it)
6. Put up as much solar PV as you can.
If you do these 6 things, depending on the type of building and size, you might already be very close to Net Zero. So the question becomes, how difficult is it to do these 6 things? Let’s go through each one.
1. An absolute no brainer; energy efficiency is the best way to reduce energy use and shouldn’t include a significant cost increase. For example, use LED vs LCD monitors, or laptops vs desktops; these are things that have little to no additional cost but can save a lot of energy. Also, buy efficient energy star appliances (do your research). All of these things add up. Remember, spending $1 on energy efficiency might save you $10 in Solar PV costs. If done right, this should be a zero or negligible cost addon.
2. LEDs are already standard in the industry and have a great payback. The new energy code already requires occupancy sensors in many places so this is also not a big change. Call this one a freebie.
3. This might be a challenging one for some designers but can absolutely be done cost effectively as was shown at the Mosaic Centre. Luckily, because most commercial buildings are cooling dominant, extremely high R-values are not required. The code required R27 effective wall is all you would need for a Net Zero building (Mosaic was R28 effective). Even that much might be overdoing it in terms of cost effectiveness. When you are paired with a geothermal system, the extremely high efficiencies of the mechanical system mask the inefficiency of the envelope, so even R20 might be enough (you would spend slightly more on the geo system). So we're not talking about a big jump from today's wall types. Also, triple pane windows are getting cheaper and are one of the lowest hanging fruits in terms of energy use (pay attention to your solar heat gain coefficient (SHGC)).
4. ERVs are already very common in the industry, have some of the shortest paybacks of any energy efficiency measure (typically 2-5 years) and can reduce building heating demands by up to 50%; they are an absolute no brainer regardless of whether you are aiming for net zero or building a code compliant CRU.
5. You simply can’t beat the efficiency of a geothermal system, which will typically use 50-80% less energy than any other system. This energy savings is critical in reducing your energy demand enough so that the PV on your roof can make a bigger impact. For example, on the Mosaic Centre, the geothermal system was an $80,000 premium, but saved over $140,000 in PV costs (again, cheaper to reduce energy demand than throw up more PV). Also, with available tax incentives like the Accelerated Capital Cost Allowance (or ACCA section 43.2, which allows you to write off the geothermal systems and building heat pumps at 50% per year) the paybacks for geo systems can be very short in most commercial buildings (less than 5 years). One of our clients just showed us his financial calculations for a geothermal system we designed and he ended up paying only $71,000 for a system that cost $250,000 to install (thanks to the ACCA). In fact, compared to a lot of larger more complicated mechanical systems (VAV, VRV) the geothermal system might actually cost less to install.
6. Finally, once you’ve done all of the above, you can buy as much Solar PV as you can fit on your roof. Costs are constantly going down (below $2/watt) and a provincial incentive is coming which will give you $0.75/watt in rebates. Solar PV is also applicable to the ACCA which improves the business case even further. We should reiterate here, the amount of PV you can fit on your roof is limited and fixed. Whether you’ve spent the money in steps 1-5 will simply determine if the PV covers 10-15% of your building’s energy (like a traditional building) or all the way to 100%. There's a reason that Solar PV is your last step.
I don’t want to trivialize the challenge of reaching net zero, but I hope I’ve shown that the formula for getting there is not only doable and repeatable, but can make complete financial sense. If anything, you could easily argue that not designing for Net Zero is a huge financial risk. We are entering an unprecedented period of change. Canada has committed to aggressive GHG savings targets in Paris but we are way off the mark in achieving them. At one point or another we will have to do something about our emissions, the question is how painful will it be to your wallet. The next decade will bring profound changes to how we look at fossil fuels. Alberta recently introduced a carbon levy that makes fossil fuel based systems immediately less attractive; this will only get worse in the years to come (with the federal Carbon tax moving to $50/ton by 2022). We also don’t have nearly as much natural gas as we think, the chart below shows that production of natural gas has dropped in every single shale play in the US, including the Marcellus; the era of cheap natural gas will come to an end and it should scare us.
The writing is on the wall, the era of fossil fuels is coming to an end. In 10 years very few buildings in Canada will still use natural gas as a heating fuel (they won't have a choice in 13 years when the net zero codes take affect). So why would we install a system today that we are just going to have to rip out in the future? Because we didn't want to add 1-3% to our building cost (which would save us money for all of those years)? This isn't the time to be thinking solely about first cost.
The green building community in Alberta has shown over and over that high performance green buildings make great financial sense. Of course it will cost us a bit extra, but in the context of such an uncertain future (carbon taxes, climate change legislation, dwindling natural gas etc…) it is the safest investment you’ll ever make. We know that natural gas prices are only headed in one direction, but electricity prices might actually get cheaper (wind and solar are now cheaper than natural gas and coal) and you have the options of generating your own electricity (using solar PV). This completely changes the game for every payback calculation you have made in the past 5 years; imagine what another 5 years could bring.