Net Zero Home Labelling Program

CHBA Net Zero Renovations

NOW OPEN: Net Zero Reno Pilot call for applications. Scroll down.
NOW OPEN: Net Zero Renovation Training Pilot dates. Register here.


The people behind the movement.

  Since 1943, CHBA has been “the voice of Canada’s residential construction industry.” Representing one of Canada's largest industry sectors, our membership is made up of some 9,000 companies – including builders, renovators, developers, trade contractors, manufacturers, suppliers, lending institutions, insurance providers, and service professionals. >Learn More

 

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Learn more about Net Zero Energy Homes

We know that as a smart consumer, you want reliable information from trusted sources. See what Natural Resources Canada and the Canada Mortgage and Housing Corporation have to say about Net Zero Energy Homes.

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Did you know you can get a 25% rebate on your mortgage insurance premium?

It's true! Find out how much you can save when owning a Net Zero Home by visiting Genworth Canada or Canada Mortgage and Housing Corporation.

What are Net Zero Homes?
Net Zero Homes produce as much clean energy as they consume. They are up to 80% more energy efficient than typical new homes and use renewable energy systems to produce the remaining energy they need. Every part of the house works together to provide consistent temperatures throughout, prevent drafts, and filter indoor air to reduce dust and allergens. The result: exceptional energy performance and the ultimate in comfort – a home at the forefront of sustainability. It all adds up to a better living experience.

Net Zero Homes through Renovations
Net Zero Homes are not just for new construction anymore.  We understand that not everyone wants to move to get the performance and comfort of a net zero home.  With this and the fact that half of Canadian homes that exist today were built before 1985 the CHBA is developing tools and resources so that some homes could achieve a Net Zero label through deep energy retrofits. Recognizing this is a significant cost, this project is exploring pathways to net zero energy over time with staged renovations, recognizing the best in building science indicates some changes will need to occur simultaneously. Some homes can more easily pursue a Net Zero Energy Renovation than others.  A Qualified Net Zero Renovator will be able to assist you in determining if your home is a good candidate.  Or, take our online quiz – coming soon!

Helping with the Cost of Net Zero Energy Renovations
PACE (Property Assessed Clean Energy) is a financing tool that homeowners can use to upgrade their home’s energy performance or install renewable energy systems with no money down but rather repaid on a property's municipal tax bill over time.

Edmonton, Toronto, and Halifax all have active programs, and many more municipalities are investigating or in the process of implementing PACE across Canada. PACE Canada is an excellent resource to track the most recent uptake, and the Federation of Canadian Municipalities (FCM) currently has a call for applications to support more municipalities in developing their PACE financing.

Keys to Developing a Successful PACE Financing Program


As CHBA’s Net Zero Home Energy Labelling Program continues to gain momentum, with it now adding renovation and multi-unit dwelling to the program (in pilot stages) as well, it is clear that successful innovative financing programs could dramatically increase affordability and access for more Canadians to attain Net Zero levels of performance in their new or existing home.  PACE programming offers just such a solution.

PACE (Property Assessed Clean Energy) is an innovative financing tool that is transforming the economics of sustainability, making it both more profitable and more affordable than ever before. Since 2008 when first introduced in Berkeley California, across the United States PACE has financed over 8 billion dollars in energy efficiency and renewable energy measures and has grown exponentially despite significant financial constraints and without any need for tax dollar support.

This document was developed by the Canadian Home Builders' Association (CHBA) in collaboration with: 

  1. PACE Canada
  2. Canadian Association of Consulting Energy Advisors
  3. Clean Air Partnership
  4. Efficiency Canada
  5. Morley Mountain Homes
  6. North Ridge Developments Corporation
  7. s2e Technologies
  8. Vancity Community Investment Bank 
Simply put, PACE allows property owners to borrow money to finance measures which serve to advance a “public good” agenda (typically energy efficiency and renewable energy measures) and repay the loan through a surcharge via their property tax bills.  Thus, allowing longer term paybacks and addressing upfront capital barriers that often undermine measure implementation. The PACE financing (loan) is secured via a tax lien and is attached to the property itself rather than the property owner. It therefore in no way affects the credit of the property owner—another benefit.
 
The simplicity of the concept belies its power. PACE makes previously unaffordable or financially unattractive energy efficiency and renewable energy measures both affordable and desirable.  
 
PACE loans have the following characteristics:  
  • the loan covers 100% of all costs (soft, hard and associated),  
  • the term and interest rate are set for the life of the loan,  
  • the loan is secured by a tax lien and can transfer to the new owner on resale,  
  • repayment terms can extend up to 30 years, and
  • finally, the loan does not accelerate in the event of a tax payment default or foreclosure, only the outstanding annual tax assessments become due and payable.  

Taken together, these features set PACE apart from other forms of financing and make it uniquely attractive to both homeowners and businesses.

PACE financing is applicable to both retrofit existing buildings and upgrade new construction projects, and to building owners to refinance existing PACE qualifying measures.  

With over 10 years of experience in the field to look back at, it is clear that PACE’s success is predicated not only on its financial characteristics but just as significant, on the ecosystem that has evolved to service and support it. The ecosystem consists of the enabling legislative framework and the stakeholders:  

  •  borrowers,  
  •  municipalities,  
  •  lenders (PACE Originators),  
  •  consultants,  
  •  subcontractors, and  
  •  administrators.  


Each stakeholder has a key role to play and the ecosystem must be structured to ensure that stakeholders’ needs and wants are met. Understanding the role of the ecosystem is essential; jurisdictions that have failed to support the ecosystem’s stakeholders have seen PACE programs underperform, or worse yet, completely fail.

Keys to Success for PACE Program Development

PACE’s success and the key role it will play in economic stimulus, job creation and climate change is predicated on creating a market for the private sector to “pull” the world towards a sustainable future by harnessing the sustainability sector to the profit motive.
 
Cisco Devries, considered to be the “founder” of PACE, said the following at a PACE conference in 2018. “There are only a handful of ways to structure a PACE program successfully and a multitude of ways to encumber it to the point of failure”. Given his background and history as a founder of Renew Financial, one of the largest PACE Originators in the USA, any jurisdiction considering setting up a PACE program will do well to heed his words and structure the ecosystem accordingly.
 
With that in mind, the following are key elements that create a successful PACE program.

 

Unlimited Capital

Key PACE stakeholders (consultants, sub-contractors, and originators) will only fully support and promote PACE if they are confident that there is no limit on the availability of capital to service the demand they support and create. While private capital comes with what appears to be a higher interest rate than public funds, public funds are inherently limited, and private capital by contrast includes numerous administrative and other costs that are often externalized from public capital. Most compellingly, private capital is functionally unlimited in nature, and building PACE programs upon private capital is critical to the success of these programs. The uncertainty associated with public funds arising from the limits on capital availability and the risk of political manipulation has resulted in significant underperformance in publicly funded PACE programs. Businesses who would actively promote and service the PACE ecosystem will limit their engagement if they cannot be certain that their investment (time, HR, capital, marketing) will not be undermined by a lack of available funds. On the other hand, when specialized PACE lenders are involved, they use their ability to bundle and securitize their loans to ensure that PACE capital is always available to service the demand.

R-PACE & C-PACE

Residential PACE (R-PACE) and Commercial PACE (C-PACE) programs serve two completely distinct markets and must be structured accordingly.  

R-PACE is targeted to the homeowner. R-PACE’s success relies heavily on contractors’ engagement and proactive participation. Most homeowners who used PACE to finance a retrofit did not know about or consider PACE until the contractor brought it to their attention. For this reason, contractors’ needs must be prioritized in any R-PACE program. Furthermore, consumer protection measures must be incorporated. Striking a balance between protection measures, simplicity, approval process and timing, and ease of use by contractors is key to the success of any R-PACE program. For example, using RenoMarkTM members as a qualified list of contractors is a great and simple way to support consumer protection.

C-PACE is targeted to all other non-R-PACE property owners: commercial, hospitality, institutional, industrial, etc. The approval process is lengthy and significantly more involved than R-PACE and requires front end cost commitments to cover items such as costing, energy modelling, business case analysis, and mortgage lender approval, none of which are required in the R-PACE approval process. So while R-PACE approvals need to be free and quick (minutes to just a few days to confirm ownership, tax history and sufficient equity) to ensure contractors’ engagement, C-PACE approvals typically require front end capital investment and two to six months to prepare.  

 

Originators

These are the PACE lenders and fall into two categories: R-PACE and C-PACE. In both cases however, the lenders play a key role in seeking out and creating interested borrowers who become clients. This active engagement by the Originators plays a key role in PACE’s growth and development. The higher interest charged by Originators reflects in part the role they play in marketing and creating PACE projects.
 

Role of Government

For government, the value of PACE is that it enables property owners to make investments that are in the public interest (energy efficiency, water efficiency, GHG emissions reduction, extreme weather resilience, etc.). To realize this value, the most important PACE success factor is confidence in the eyes of all other stakeholders (including property owners, investors, contractors, suppliers, and mortgage lenders): confidence that the program will remain a going concern, that the only changes will be to improve and streamline, that the program will be resilient to changes in political direction, and that risk is minimized (and, more specifically, that consumers are protected). This is best accomplished if the role of government is solely to set rules, and to ensure that those rules focus on ends rather than means. 
 
Where PACE legislation is too specific on means and methods, the resulting complexity will discourage communities from launching in the first place; what programs do launch will struggle to contain overhead costs. Where government serves as funder, the program is subject to budget scrutiny with each election cycle, and is at risk of cancellation or disruption in ways that erode the confidence that is so critical for program success; there is also the risk that the program will grind to a halt once the allocated funds are fully invested.
 
By contrast, PACE legislation that is focused on outcomes will encourage local programs that have minimal complexity and overhead costs, where the municipality can play as small a role as its elected representatives prefer. It will also open the door to private sector investment that effectively has no upper limit, especially if the legislation allows PACE loans to be securitized (bundled together and sold off) and the proceeds used to recapitalize the program.

 

Connecting Capital to Public Good Measures

At its core, PACE programs are most successful when they respect that the most cost-effective performance measures are implemented when the ecosystem is designed to attract unlimited capital and deliver that capital at the lowest cost possible to the borrowers with the least amount of administrative cost in the transaction. Eliminating any measure which interferes with this equation yields successful PACE programs. Washington state’s recent C-PACE legislation serves as an excellent example; the approval process has been simplified to such an extent that the role of the 3rd party C-PACE program administrator has been entirely eliminated and replaced with a simple registration process that is handled by the existing municipal government infrastructure.
 

Conclusion

PACE can play a significant role in the meeting Canada’s climate objectives, and support homeowners in their goals to reduce the GHG impact of their homes.  Further, PACE programs can support the development of a robust industry supporting energy efficiency in every local community.  This program also has the potential to develop a pool of patient capital toward energy efficiency and climate change mitigation. As the PACE model becomes more entrenched, there may be opportunities to expand the financing model beyond clean energy objectives, and support other public interest goals, such as creating more multi-generational homes, and supporting more seniors as they age in place.

Calculating the Value of Net Zero Energy Renovations
CHBA has been working with the Appraisal Institute of Canada to bring best practices from the US Appraisal Institute’s Green and Energy Efficient Addendum to Canada. Pilot participants will receive pre-renovation and post-renovation appraisals of their homes, to calculate the increased value from a Net Zero Renovation.
Developing CHBA's Net Zero Renovation Program
This program is national in scope to ensure broad geographic participation at maximum scale.  A group of highly engaged renovators, builders, energy advisors, utilities, and government officials representing the majority of provinces were pulled together as a Renovation Working Group to provide guidance through the development of this project.

Blaise McDonald, MAC Renovations Ltd. (BC)
Brad McLaughlin, MCL Constructions Ltd. (NB)
Brad Sveinson, Character Homes Ltd. (MB)
Dale Rott, Effect Homes (AB)          
Dave Butterwick, Butterwick Construction & Carpentry Ltd (AB)
Derek Taylor, Whitehall Homes & Construction (ON)
Luke Dolan, Capital Home Energy (BC)
Nick Gazo, NAIMA Canada (ON)
Peter Darlington, Solar Homes Inc (AB)
Shawna Henderson, Bluehouse Energy (NS)
Stephen Magneron, Homesol (ON)
Steve Snider, Steve Snider Construction (ON)
Gary Hamer (Net Zero Technical Committee Rep.)


Panelists Peter Amerongen, Chris Higgins, Joe Geluch, and Marie Hanchet discussing Net Zero Renovations at the Net Zero Energy Leadership Summit in Feb 2020.

As this program is under development this web page will be updated as new information becomes available. Any questions about the Net Zero Energy Renovations Project can be directed to Marie Hanchet, Project Manager Net Zero Energy Housing at marie.hanchet@chba.ca.

NOW OPEN: Net Zero Reno Pilot - Call for Applications
Successfully achieving affordable/cost-effective Net Zero/Ready Renovations requires the use of energy efficient materials and products, construction practices that utilize building science best practices, and effective financing tools. To help industry work towards this outcome, the CHBA is calling for applications to participate in a Net Zero Reno Pilot.

The objective of this Pilot is to validate the Technical and Administrative Program Requirements of the Net Zero Renovations Labelling Program. Post-pilot, the Program Requirements will be refined and information on the opportunities and challenges for adoption will be disseminated.

Post-pilot the program will provide the opportunity for existing homes to work towards achieving Net Zero/Ready over the course of time – through several smaller scale renovations, rather than one significant and likely costly renovation. (Which can already be done through our current Net Zero Home Labelling Program.) A Net Zero “Pathway” Home will have a prioritized renovation plan designed for it that the homeowner(s) can tackle as budgets allow.

MANDATORY PILOT CRITERIA: 

  • Project must meet all Pilot Technical and Administrative Requirements. (CHBA members only - must be logged in.)
  • Project must be a single-family, semi-detached or row/townhome. (No stacked townhomes or MURBs.)
  • Project must be completed with a blower door test done within two years of application submission. (See the Technical Requirements for further details.)
  • The project renovator must complete the required training and qualification requirements by March 31st, 2021.  (The Net Zero Renovator training dates and registration is available here.)
  • The project EA must complete the required training and qualification requirements by March 31st, 2021.



Net Zero + RenoMark™ = a winning combination


A Net Zero home renovation can be a significant investment for homeowners. For this reason, it is mandatory for Qualified Net Zero Renovators to successfully complete prescribed training courses as well as be enrolled in the RenoMark program in order to offer knowledgeable recommendations and services.  

RenoMark is the Renovator’s Mark of Excellence. It defines CHBA members as professional, qualified, reputable, and trustworthy renovation contractors. These skills are essential and are what homeowners are looking before they commit to an extensive Net Zero renovation.

Want to learn more about RenoMark? Contact your
local Home Builders’ Association today! 
APPLICATION FILES & SCHEDULE:
  • Applications must include completed Application Form, pre and post HOT2000 files including EnerGuide Label and Reports, and Project Registration Workbook-Renovations (PRW-R).
  • Any additional information outlined in the Application Form the client/homeowner agreed to share.
  • Final project application deadline: Feb 5, 2021.
  • The Net Zero Technical Committee will review applications monthly per the following schedule:
Submit application by: Application reviewed on: Applicant notified by:
Jul 10 Jul 20 Jul 24
Aug 7 Aug 17 Aug 21
Sep 4 Sep 14 Sep 18
Oct 2 Oct 13 Oct 16
Nov 6 Nov 16 Nov 20
Dec 4 Dec 14 Dec 18
Jan 8 Jan 18 Jan 22
Feb 5 Feb 16 Feb 19


The Pilot aims to gather and share as much of the following information as possible.  Renovators will need to indicate the information that can be shared for this project on the Application Form and include it with the NZ/NZr label submission

  • Disclose cost of renovation with the program to share publicly or confidentially? 
  • Disclose utility bills pre and post renovation to share publicly or confidentially? 
  • Disclose the funding tools/mechanisms used to finance the renovation publicly or confidentially? 
  • Have photographs taken pre, post and during renovation to share publicly or confidentially?
  • Have thermal imaging photos taken pre and post renovation to share publicly or confidentially?
  • Participate in pre and post appraisals to share publicly or confidentially?
  • Complete a home comfort questionnaire pre and post renovation to share publicly or confidentially?
  • Provide feedback and a testimonial post renovation to share publicly or confidentially?

To participate in the Pilot, please ensure that the project meets all of the mandatory criteria listed above and submit a completed Application Form to Marie.Hanchet@chba.ca per the application schedule.  There is a maximum of 20 homes that can be supported in this NZ Renovation pilot. 

Profiles of Labelled Net Zero Renovations in the Pilot

  1.  Solar Homes Inc. Calgary, Alberta - Net Zero Renovation Profile  & 1st Label Press Release
  2.  RDC Fine Homes Inc. Whistler, British Columbia - Net Zero Renovation Profile

CHBA Qualified Net Zero Renovator Requirements - Pilot

  1. CHBA Member - Be a CHBA member in good standing.
  2. RenoMark - Be a RenoMark renovator.
  3. Training - Complete the CHBA Net Zero Builder Training and the CHBA Net Zero Renovator Training with a minimum exam score of 75% by March 31, 2021. An “SO approved” Building Science Training course is a pre-requisite to the CHBA Net Zero Builder Training. Renovator companies must have at least one Net Zero trained person on staff. Once training has been successfully completed renovators can request the Net Zero/Ready Home logos from their SO for promotion of projects. 
  4. Labels - Work with a CHBA Qualified Net Zero Energy Advisor (EA) and CHBA Qualified Net Zero Service Organization (SO) to obtain ERS and Net Zero/Ready labels for the home(s).
  5. Registration - Once the first home has been labelled and all  Qualified Net Zero Renovator Requirements have been met, the SO prompts the renovator to register with the CHBA by signing the Renovator Agreement and Attestation. Once registration is complete, the SO sends the renovator a confirmation letter along with the program marketing collateral including the "Qualified Net Zero Renovator" logo. The renovator will then be added to the www.NetZeroHome.com webpage as a CHBA Qualified Net Zero Renovator.

Coming Fall 2020: Trained Net Zero Renovators Directory

We would like to thank Natural Resources Canada, Office of Energy Efficiency for their contributions towards the development of the Net Zero Renovation Program.