Retrofitting millions of buildings in Canada requires a massive and very necessary financial investment. To achieve our goal of saving the planet by reducing carbon emissions in the built environment, we need many options on the table.

Upgrading our existing buildings for better performance, reduced emissions and resiliency is most effectively done ALL AT ONCE. Phasing or piecemeal renovations may cause weak points where layers intersect, or if mechanical systems aren't geared properly to handle changes in the building envelope. At the same time, it's critical that we perform as many retrofits as possible in the next couple of decades to achieve a net-zero energy built environment.

For many homeowners and tenants of MURBs and high-rise apartments, the cost of doing major upgrades may be difficult to handle, if not impossible. Some buildings may require upwards of $100,000 of work to bring them to optimal performance, even more so for larger multi-unit buildings.

How do we solve this problem?

Many financing options are needed to capture the massive amount of energy retrofit work that needs doing. From private investments to government loans and grants, building owners must have an array of financial vehicles available if and when building codes become even more stringent in the future.

MUNICIPAL FUNDING

The primary access point for retrofits may be at the municipal permit level - a homeowner will engage with an architect, energy advisor or renovation contractor to start the process of getting work done on their building. Plans and specifications will be submitted to building officials for permitting, which may activate financing mechanisms. This means that contractors, building officials and energy advising service organizations will need to have information about financing options directly on hand.

In a study completed in 2018 through 2020, NRCan and the Pembina Institute identified several methods that municipalities might incorporate to structure retrofit financing:

• PACE financing - Property Assessed Clean Energy financing is a long-term loan much like a mortgage that is applied to the property taxes of a building instead of to the building owner. A building is assessed by a certified energy advisor and a plan is created to bring the building to better energy performance. A PACE loan pays for the entire retrofit, with the repayment amortized over 30 - 50 years within the tax structure of a town or city.
• Building officials, contractors and homeowners will need clear and user friendly pathways to accessing PACE financing. This would require training and awareness campaigns to bring the public up to speed.
• Permitting and inspections of projects may need streamlining to ensure that retrofits are expedited quickly and effectively. This will require training and hiring thousands of building officials and inspectors across Canada.
  
• Renewable energy systems applied as neighbourhood micro-grids may help to offset the cost of retrofitting a community of buildings.
  
• Support for government stimulus funding for energy retrofits must be part of every municipal strategic plan. Dedicated efforts and staffing may be required to manage processes for incentive and rebate programs, to make the retrofit process as "plug-and-play" as possible.
  

PRIVATE FUNDING

Banks, investment firms and mortgage brokers may play the largest role in financing a national energy retrofit program, as they are familiar with this type of funding and already have the required structures in place. There may also be opportunities for private investors to put their money into community retrofits and energy systems, seeing payback on potential energy reductions and savings from the energy grid.

According to a 2014 study published by the International Energy Agency, titled "Capturing Multiple Benefits of Energy Efficiency", the macroeconomic returns on investing in the energy efficiency sector may include job creation, greater disposable income from energy savings, technological advances and improved energy security.

For the most part, the report paints a positive outlook for potential economic, environmental and social benefits when governments, industry and investors focus on energy efficiency initiatives. Although a definitive monetary value may be difficult to identify, and the authors of the report recommend...

A holistic and comprehensive analytical approach is needed to capture both positive and negative impacts in each case, and enable evaluators to assess whether the net effect of a particular energy efficiency policy is positive or negative.

Measuring the money not spent on energy supply may seem like a detractor at first glance, but with policies that help to incentivize energy retrofits and potential for new industries and employment, there might be great returns for buildings and other sectors.