Sustainable Living: Understanding Home Retrofits

Michael Torrance:

Welcome to Sustainability Leaders. I'm Michael Torrance, Chief Sustainability Officer at BMO. On this show, we will talk with leading sustainability practitioners from the corporate, investor, academic, and NGO communities, to explore how this rapidly evolving field of sustainability is impacting global investment, business practices, and our world.

Speaker 2:

The views expressed here are those of the participants, and not those of Bank of Montreal, its affiliates, or subsidiaries.

Ashish Arora:

Hi everyone. I'm your host, Ashish Arora, Regional Vice President of Specialized Sales Group, focusing on home financing in our BC, and Yukon region with BMO Financial Group. I'm really pleased to host this podcast on home retrofits today. If you're curious about how to make your home energy efficient, comfortable, and environmentally friendly, learn about government incentives, or how to get started, we're going to cover it all. We have four amazing guests joining us today. I'll introduce all of them. We have Paul Dowsett, Principal Architect at Sustainable. Sarah Grant is a certified energy auditor, and Founder of Goldfinch Energy, and Lori Zucchiatti O'Neill, and Michael O'Neill who both are homeowners that have retrofitted their home. Welcome everyone, and thank you for taking the time to join us. Paul, as a sustainability architect, what are the drivers for a homeowner to retrofit their home?

Paul Dowsett:

Thank you, Ashish. It's absolutely my pleasure to be here on this BMO podcast. So, thank you very much. Your question about what are the drivers for home retrofits, that question is both a big picture, and a small picture question all at the same time. So, in my answer, I'll start with the big picture, and then work us down to the small picture. So, retrofits are necessary to meet Canada's 2030 emissions reduction plan. To reduce emissions by 40% below 2005 levels by 2030, and put us on a path to net-zero emissions by 2050. That's a lot of numbers, means almost nothing to anybody. To make it a little more understandable, that really means that all homes in Canada must be retrofit to net-zero emissions by 2050, or 2040 if you live in Toronto, and some other places now as well. Again, kind of a sciency answer that most people don't really understand, so bring it down to where we live.

Our homes, by burning oil, and gas for heat are very large contributors to climate change, and that's what we must change. By switching from oil, and gas to carbon-clean electricity, our homes can be part of the solution rather than part of the problem. That's the bringing the big picture down to where we live. Here in the Pocket where I live, in talking with other neighbors, we find that their three main drivers to retrofit their homes or the reasons to think about home retrofits are one, their gas furnace is about to die, and that's a good time to think about carbon-free heating options, or they're planning a renovation, which is a good time to think about carbon-free energy efficiency in your home. Or they're people who are climate concerned, and they want to find ways to live a carbon-free lifestyle. Those are the three things that we find what people are thinking about, and they're ready to think about reducing their carbon emissions.

Ashish Arora:

So, Paul, in a recent survey of the Appraisal Institute of Canada, its members rated energy efficiency improvements as one of the highest paybacks relative to cost that a homeowner might receive on home renovations. You have completely electrified your home. I'm curious, do you have a view on the impact of your retrofit on your home valuation as a homeowner, and how do you measure the return?

Paul Dowsett:

Yes, that question payback, or what's my ROI? Yeah. Traditionally we've looked at this as a single bottom line. We've looked at it as a financial question, what's my ROI? What's my return on investment really boils down to what's in it for me. Whereas now, in the 21st century, we really have to be looking at a triple bottom line. So, not only financial, but also social, and environmental concerns. So, it kind of changes the what's in it for me to what's in it for we. The me to we idea, we have to look outside of ourselves, so to bring it to my own house, yes, financially I do have some immediate, and ongoing returns. By switching to all electric for my heating, I'm saving about $400 a year, not buying natural gas for my heating. If I actually include my car in this equation, my all electric car, and now I'm saving at the fuel pumps as well.

My annual savings go up to about $4,000 a year, but I also have some immediate, and ongoing social benefits returns. My house is much more comfortable. It's not drafty, I have a very even temperature delivered by the heat pump, and my house is healthy. I'm not burning toxic gases in my house, and I'm not breathing in the toxic gases as I’m cooking over a gas stove. So, those are immediate social benefits. Immediate, and ongoing environmental benefits paramount is knowing that my house is doing its part to curb climate change, that's not a small thing.

So, all of these benefits I get now a future financial return on my investment, of course, would be a higher resale value. Just as today, good schools, and good walk scores improve your home's resale value. I think as we move forward in the not too distant future energy efficient homes, which are comfortable, which are non-greenhouse gas carbon emitting, those are the homes that are also going to be increasing in resale value. So, the return on my investment is both immediate, and covers all three of the triple bottom lines, but there is also a future financial benefit coming down the road.

Ashish Arora:

Thank you, Paul. What's in it for we mindset? I think that's brilliant, and just following up on your insights, I'd like to ask about the environmental impact of building materials. What is your perspective on the benefits of using sustainably sourced materials for the building envelope?

Paul Dowsett:

Great question, Ashish, because I own a company, an architectural firm called Sustainable. I think you know which direction this answer is going to go in, but I'll give you the answer anyway. There are primarily two environmental impacts of building materials, well, really all materials, everything which is human made does have an environmental impact. But the first is upfront, or embodied emissions, embodied carbon. Most people know it as, and this comes from the extraction, manufacture, and transportation of those materials. The second environmental impact is the ongoing operational emissions, and those are what a building produces in terms of emissions by heating, and cooling through the year. And that's related to the material's ability to increase the energy efficiency. So, when we think of these carbon emissions, we generally think of these operational emissions. Most of us don't think about those upfront embodied emissions, but they're really important.

So, when we look at those materials, if I'm using a material that emits a lot of carbon now to reduce carbon later, that's not a good material to use. I should actually be using a material that emits very little carbon now, and also reduces carbon later. And so the closer to nature made versus human made the material is the fewer upfront emissions they will have. An example is mineral wool, or wood fiber insulation, the mineral, the wood sounding very close to nature versus spray foam, or rigid foam, which is made from a petroleum product. So, the mineral wool, the wood fiber has much fewer upfront emissions, and mother nature will take back mineral wool, and wood fiber when we're finished with it. But mother nature will not take back foam. So, there's another thing to consider in the big picture, and it's also much healthier to live surrounded by these natural materials. The materials around you affect the air that you breathe in your house. So, it's much better to be surrounded by wood, and paper, and things that are natural rather than by plastic.

Ashish Arora:

Thank you, Paul. Learning lots today. Going to the next question, and thank you. I think that's really well explained. Paul, we have guests today who are from a small neighborhood just east of downtown Toronto called the Pocket. It's made up of 1100 homes, many older homes, and 3,500 people living there. People from this community are generally interested in environmental issues, and living sustainably. Paul, can you speak about how homeowners in your community have organized around reducing carbon emissions, and home retrofits?

Paul Dowsett:

Sure, Ashish. No problem. I did mention the Pocket Change Project earlier without really an explanation. So, it's good that this question came up, the Pocket Change Project has three main issues. The first being our 100-year-old homes need to be more energy efficient.

But we also talked about transportation. We needed to switch to active transportation, walking, and biking. And then the third main issue in the Pocket Change Project is greening the Pocket, planting trees, planting gardens, both private gardens, and community gardens, enhancing our neighborhood park, and throughout all of these areas, controlling invasive species. Just to look then a little more specifically at retrofitting our homes. This is really where the neighbors helping neighbors, where we have trusting neighbors, talking to trusted neighbors. I'm the neighbor, and I am the Pocket retrofit coach. So, a lot of people come to me for information, which is great. I love to share, I love to help others along their retrofit journeys. It's like those of us who have done the work are now helping those around us who are doing the work.

So, people ask questions like, "Why are all electric, cold climate, air source heat pumps better than gas furnaces?" And there's quite a few reasons why since 2014 in Ontario, electricity has been 93% carbon clean since we stopped burning coal to make electricity. Therefore, our electricity has very few greenhouse gas emissions. So, switching from a fossil fuel to electricity in Ontario is a really good emissions reductions strategy. Heat pumps themselves are two to 300% efficient versus the best gas furnace, which is 96% less than 100% efficient. So, heat pumps are two to three times better than gas furnaces. Often when you talk to people about going electric, they remember those electric rads at the cottage, and how much energy they used, and that your dad never let you turn them on. But also number two, I talk to people about staying warm, and comfortable. You want that even temperature that a near-source heat pump delivers. And third, and last but not least, you also get to reduce your greenhouse gas emissions. You're doing your part for the planet.

Ashish Arora:

Thank you, Paul. Again, love the insights around how the community got together, and again, that mindset of what's in it for we comes out very clearly. And talking about net emissions, Canada has committed to achieving net-zero emissions by 2050. This means significantly reducing emissions, and switching to clean energy. Homeowners Michael, and Lori are doing just that. They have completely retrofitted their home. So, Lori, and Michael, could you tell us why you chose to retrofit your home, how you got started, and what your retrofit included?

Lori Zucchiatti O'Neill:

Sure. Thanks Ashish. And before we answer that question, we'd just like to thank you, and everyone else involved in this podcast. We really appreciate the opportunity to participate. The sole reason why we wanted to retrofit our home was to be more environmentally responsible, regarding the house itself, the actual structure. And this was in keeping with our ongoing goals to be more environmentally responsible in other areas of our life. Obviously, this is a process. It's not a single one-time event, and we need to adapt to the evolving science, and the available technology. You could say, now that we know better, we're trying to do better. Michael's work at an engineering manufacturing firm taught us about the huge impact that buildings, including residential, single family homes have on greenhouse gas emissions across the planet. I'd never considered that before. I'd been focused on other sources of greenhouse gas emissions.

So, learning this really motivated us to do something more with regard to our house to reduce those greenhouse gas emissions. In terms of how we got started, I would say the roots of it go back to a backyard renovation that we did a couple of years after we moved into our house. And by the way, we bought our home in fall of 2014, so we're coming up on the 10-year anniversary. And our house is 111 years old this year. So, as Paul said, a lot of old homes in the Pocket, and we're in one of them. And that backyard renovation included some sustainability features in terms of the materials, and products. We were shocked to find out that this well-established landscape design firm had not had any clients, at least not in terms of the designer that we worked with at the firm who said they really wanted to focus on sustainable features in the work that they were doing.

So, that was where we got started. And soon after that, we started to think about other areas of our home, and that's where the real retrofit work began. And we started off with just doing some very basic online research, and not really knowing where we were going to go, what we were going to do, how, when, why, et cetera, but we just wanted to start laying a foundation. In terms of what the retrofit actually included, I'll turn to my husband to address that long list.

Michael O'Neill:

Yes, we were looking at a number of issues that would reduce our carbon footprint, and I guess starting with the single greatest step would be the cold climate, air source heat pump that had more impact than we ever expected. It spurred us on, and we started to develop plans for solar panels, new siding on the home, new windows, batteries. That would constitute the majority of the work that we have done. And the one thing that I would add to all of this, listening to Paul, and Lori, I think we were of that small group that entered into this, not for me, but for we, but in the course of this we found out there was a lot in it for me, our occupant comfort, all the points that Paul has already outlined, we've actually come to experience, and it's been a very gratifying, and satisfying situation that we find ourselves in.

Lori Zucchiatti O'Neill:

Yeah, absolutely. And to return to the concept of this being a process, we started the work in July, and August of 2022. We had solar panels installed in July of that year. The following month, we replaced our natural gas furnace with the cold climate air source heat pump. That also meant we could eliminate the central air conditioning unit. We replaced our natural gas water heater with an electric heat pump water heater. We were fortunate in that we didn't have a gas range, or cooktop. We didn't have a gas dryer. We didn't even have a gas outdoor grill. We had one gas fireplace, which we have since disconnected, and we even cut the gas line.

So, it's just for show these days. And in addition to what Michael said, we did a small amount of insulation with our home, but thankfully not much was required. And of course, when we were considering insulation, we looked at the more environmentally responsible options that Paul was talking about, mineral wood, fiber, that type. A membrane wrapping our home, followed by wooden siding on the outside, along with the new windows that Michael mentioned, have made our house much more airtight. So, a long list, but one of the things we like to stress is that people can do a lot to reduce their greenhouse gas emissions if they even replace a gas, or oil furnace with a cold climate air source heat pump.

Ashish Arora:

Thank you for the detailed look back. It sounds like a great, great journey. And again, like myself, learning a lot, and love your mindset of we know better now we do better, because the education here is so important for so many of us. And as we understand the benefits of energy efficient upgrades, homeowners like myself can start to make those informed decisions. And it's great to hear about your individual journey, or combined journey talking about heat pumps. So, heat pumps are relatively new to some of us in the Canadian geography, Lori, and Michael. How did you obtain reliable guidance to select the right products, manufacturers, and even installers?

Lori Zucchiatti O'Neill:

What the turning point was, was when, and this goes back to the Pocket Change Project,

and realizing that we had a resident expert in terms of Paul Dowsett, a sustainable architect. This was music to our ears. And he, along with Sarah Grant as a registered energy advisor, and engineer, they were the ones who provided us with guidance. Not only are they experts, they were not selling anything. So, we turned to them knowing that we would get expert advice, objective advice, and they were able to guide us with regard to the products, the materials, manufacturers, installers, in other words, the what, and the who, also the when, and the how of doing this kind of work. So, we're eternally grateful to Paul, and Sarah, and other people like themselves who are doing this kind of work to support homeowners.

Ashish Arora:

Just listening to both of you, and Paul, the ability for working with like-minded homeowners goes such a long way in helping, I guess, each other get to those right manufacturers installers, or best practices. So, it's just really nice to see. Following up on this, can you give us a sense of the benefits that you have experienced from retrofitting your home, for example, which upgrades were the most worthwhile regarding value for money, or home comfort for you?

Michael O'Neill:

I think without any doubt it would be the heat pump. That had the single greatest impact on what we were hoping to accomplish. And then everything else fell into place after that. The addition of the solar panels has enabled us to not only use a 100% clean energy, but we also were able to share that clean energy, because we're not using all of it, and we're returning a portion of it back to the grid for our own neighbors to be able to use.

Lori Zucchiatti O'Neill:

And simultaneously, we did replace our gas water heater. So, literally overnight we went from producing greenhouse gas emissions to producing no emissions. We had several hot, and cold spots depending on the season in our home. We have a large window in our kitchen. It was among the draftiest places in our home. We like to stand in front of that kitchen window, and watch the wildlife, the birds, the squirrels, et cetera. And in the cold weather, we would stand there, and you could feel the cold air coming in. We don't have that anymore. So, that's a major impact in terms of making the home more comfortable. So, with regard to the health aspects, we feel that we're living in a healthier home, because we are not burning fossil fuels for heating, cooling, cooking, drying our clothes, et cetera.

We have been confident that based on the evolving science, we've made a decision that is making the interior of our home healthier as well as having a positive impact on the planet. It's important that we're walking the talk. We can speak to our lived experience, all the benefits there have truly been no disadvantages to any of the work that we've done. It has been a substantial financial cost, but it's also important to remember that people don't need to do it all to have a significant impact, and they can do it at their own pace, and there are some supports out there to help them financially as well.

Ashish Arora:

And thank you for sharing specific examples as well. Investing in a home retrofit involves various financial considerations, including upfront cost, renovation, financing, potential government incentives, long-term savings, and increased property value. Speaking to a mortgage specialist can help homeowners make an informed decision. Lori, and Michael, do you see government grants, and rebate programs as appealing financial incentives for homeowners to retrofit their home?

Michael O'Neill:

I think, then, as we began to gel as a neighborhood, as Paul mentioned in 2016, Pocket Change was created, as the knowledge began to be shared, and we became aware of new programs, and new programs were being added as we went along. Inasmuch as we had been budgeting for it, those programs certainly accelerated our plans where we thought we would go at one step at a time. The programs made us rethink that, and we started to accelerate the activity as we went. So, that was very important for us. If I change hats, and think of several of my neighbors that need those programs to do any part of this, it has a huge impact on them. It makes the difference between doing it, and not doing it. And as a member of this community, as a citizen of this country, that's extremely critical. And governments have a role that they can help fulfill these activities, and close that loop for many residents, and it's extremely important.

Ashish Arora:

Thank you. Thank you for this guidance, and I will echo your comments, Lori. Your passion for your cause is fantastic, and it comes out, and I think your motto on walk the talk, it was very evident based on the examples, and the insights you shared. So, thank you for that. And now let's move to Sarah, who has been very patient with us. So, the next question is for Sarah, as a certified energy auditor, can you explain how an energy audit guides a retrofit project, and informs decisions about energy saving upgrades?

Sarah Grant:

Sure. And hello, this is such a great lineup of folks to follow. It's been really fun hearing what Paul, and Michael, and Lori have to say, and what a great conversation, happy to add to it. Having a plan is really the first step to being able to step by step, make those informed decisions to get you to a point where you want to go. So, an energy audit is designed to give a homeowner an idea of where their home is at right now. So, what's going on? How is the home heated, and how old is the gas furnace in the air conditioner, the hot water? Well, one of the most interesting parts of the energy audit involves doing what's called a blower door test, where we'll hook up a big fan to sort of usually the front door, and take a series of measurements that help us determine how leaky the house is, or how drafty.

And this is often quite revealing, particularly if we're in an older home, which older homes tend to be fairly drafty. I usually find that people are often focused on insulation. If they're planning a renovation, they'll want to know, yeah, what should I do, and what are the non-toxic materials I can use for my insulation? But air leakage is most often the top source of heat loss in a home. And so when we measure it, we can then kind of quantify it, and then even keep the fan running, and walk around, and sort of seek out some of the sources of drafts, and talk about how they might be addressed.

Ashish Arora:

Thank you so much, Sarah. So, how does the building envelope heating, and cooling systems along with renewable energy changes impact the home energy's efficiency?

Sarah Grant:

That's a great question, Ashish. And I think what you're getting at there is, or what I want to speak to is that all three of those aspects work together as a system. The building envelope is the term that refers to the parts of our house that it's kind of the barrier between the outdoors, and the indoors. So, this may be the walls, windows, doors, which may do a good job of keeping that warm air in the winter inside, or may not. And so the better the building envelope, then smaller the heating equipment you need, and the smaller the cooling equipment you need. The less that'll run the lower your bills, and renewable systems.

So, Michael, and Lori have really done what I would say is sort of the gold standard, even the triple gold standard for homes, not only did they make their building envelope better by reducing that air leakage, by adding what's called an air barrier, which is kind of like the wind breaker for their home, and replacing their windows. And so those three aspects have a relationship, and that's ideal when you're able to do all three. Not everyone can, or not everyone can do them all at once, but when you can, it's quite amazing.

Ashish Arora:

And I will echo again your comment on making informed decisions are the best ones, and this is very helpful. So, Sarah, another question for you. Remote home energy assessments are now becoming available with advancements in technology, and an increased focus on sustainability. What are your thoughts on them?

Sarah Grant:

I think that there is a lot of value in remote home assessments, particularly if you're talking about a location where there may not be as many experts like Paul Dowsett who's around the corner for Michael, and Lori, and myself. In that case, really honestly, anything that can help better inspire, and inform homeowners is a benefit.

Ashish Arora:

This has been extremely, extremely informative, and thanks again, Sarah, for all of the specifics as well. I want to just say a big thank you to all of our panelists today. We have Paul Lori, Michael, and of course, Sarah, thank you for joining us today. We really appreciate you sharing your insights, your knowledge, and your personal experiences as not only are they extremely inspiring, but very useful in helping our listeners make an informed decision. And I know that was important for you based on what we heard from all four of you. In closing, thank you for joining us on this journey to the world of home retrofits, whether you're just beginning, or well into your retrofit project, we hope today's episode provided valuable insights. Please do share the podcast with others who are interested in retrofitting their homes for financial guidance. Speak to a mortgage specialist one home at a time. We can certainly build a greener future. Have a great day, everyone, and thanks again.

Michael Torrance:

Thanks for listening to Sustainability Leaders. This podcast is presented by BMO. You can find our show on Apple Podcasts, Spotify, or your favorite podcast player. Press the follow button if you want to get notified when new episodes are published. We value your input, so please leave a rating, review, and any feedback that you might have, or visit us at BMO.com/sustainabilityleaders. Our show, and resources are produced with support from BMO's Marketing Team, and Puddle Creative. Until next time, thanks for listening, and have a great week.

Speaker 8:

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