As we enter our second summer of the pandemic, the HSC Energy Services team has been keeping busy with the 2022 Natural Gas Purchasing Program renewal and supporting non-profit providers in their provincial energy data submissions. In this issue of Energy Matters, we learn about WoodGreen Community Housing’s unique energy project financing approach, share hot tips for dealing with extreme heat in your buildings, check out recent tools and webinars on energy and capital projects, and break down provincial energy data reporting requirements.
Have a safe and enjoyable summer!
In this Issue:
- WoodGreen Leverages Innovative Financing for Energy Projects
- Extreme Heat – Hot Tips for Housing Providers
- Provincial Energy Data Reporting – It’s that Time Again
- Worth a Look – BC Decarbonization Retrofit & CMCH Deep Retrofit Tools & Resources
- Utility Tracking Provides Apples-to-Apples Comparisons
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WoodGreen Leverages Innovative Financing for Energy Projects
Back in 2019, WoodGreen Community Housing, Inc. (WoodGreen) in Toronto was faced with a dilemma familiar to many Ontario housing providers: it had a long list of much-needed capital improvements and insufficient capital dollars to tackle them all.
To address this funding gap, WoodGreen began exploring various financing options. This search eventually brought them to Efficiency Capital, an energy savings investor offering performance-based investment solutions to improve building energy efficiency.
The result was an innovative investment partnership between WoodGreen and Efficiency Capital that will leverage a $1.3 million investment into a $3.4 million retrofit project that is expected to add over $5.7 million to WoodGreen’s capital reserves by 2048.
The Back Story
WoodGreen’s energy savings story begins more broadly, at the asset management level. WoodGreen is one of Toronto’s largest non-profit affordable housing providers with over 800 units across 15 properties, a portfolio with significant capital needs but a limited reserve fund. To quantify its funding gap, WoodGreen completed Building Condition Assessments (BCAs) on its entire portfolio in 2017/2018 and, with that information, conducted a reserve fund analysis. The analysis revealed a potential $74 million capital reserve deficit by 2048 if WoodGreen maintained its current capital allocation approach. WoodGreen then set out to develop a comprehensive asset stewardship strategy, which it dubbed the Asset Sustainability and Climate Change Framework. This included doing a long-term capital plan, in which it prioritized critical health and safety and state of repair projects for the 2019-2024 period. It also targeted an overall Facility Condition Index of good/fair for its portfolio and, to be better positioned to meet this target, increased its annual per-unit capital contribution from $600 to $1000.
The Energy Side
To bridge its capital dollars gap, WoodGreen began to look at different financial solutions, such as refinancing, alternative funding, and, on the energy side, energy performance contracts. This search brought WoodGreen to Efficiency Capital, and the two began exploring how they might work together for their mutual benefit.
Efficiency Capital (EC) works on an Energy Savings Performance Agreement (ESPA) model that involves the following:
- EC provides the investment dollars and project management;
- An engineer provides engineering, procurement, and contracting support and provides a savings guarantee;
- An insurer insures the savings guarantee; and
- Ongoing maintenance and verification validates the savings.
This approach provides upfront capital, transfers the risk from WoodGreen to all parties in the agreement, and builds in project implementation and management, which providers alone often lack. In the case of WoodGreen this added capacity included Finn Projects and Sensor Suite as technical partners with a long term financial stake in the success of the project.
Armed with information from BCAs as well as energy audits, WoodGreen knew the energy saving potential of its portfolio and recognized that a mass investment, rather than a building-by-building approach, would have a deeper impact while being more attractive to EC. At the same time, WoodGreen was able to secure a Better Building Partnership (BBP) loan from the City of Toronto as part of a co-financing strategy on the overall project.
The overall contributions include:
|EC – 10 Year ESPA Investment||$833,000|
|BBP – 20 Year Fixed Rate Loan||$985,000|
|WCH – Reserve Fund Expenditure||$1,300,000|
|Total Project Cost||$3,118,000|
WoodGreen’s approach is unique because it monetizes the volume of energy savings generated across the portfolio to finance building capital costs. Energy savings become a financial tool for building modernization and achieving climate change mitigation goals. Thanks to this approach, this project is the first in Canada to be awarded the internationally recognized Investor Ready Energy Efficiency (IREE) certification by Green Business Certification Inc. Canada.
The upgrades on eight of WoodGreen’s fifteen buildings will include high-efficiency boilers, air-cooled chillers, low-flow toilets, air infiltration improvements, LED lights, and Building Automation Systems (BAS). The BAS are crucial in the measurement of the energy savings. WoodGreen, through its project engineer, is working with SensorSuite to track the utility consumption in the updated buildings against the original pre-project baseline. The data will feed into WoodGreen’s accounting system, which has been reformed to include greenhouse gas emissions reductions and energy savings for the purpose of monetizing the project’s achievements. Hence, this project will anchor the evolution of WoodGreen to incorporating climate change metrics to its traditional accounting system.
The project installation is nearly complete. The table below illustrates the current status and investment to date:
2020 ESPA Implementation Update
|PROJECT||% COMPLETE||% OF COSTS||INVESTMENT TO DATE|
|Awareness & Training||100%||0.58%||$19,168|
|Mechanical (pumps & domestic hot water)||96%||11.92%||$375,497|
|Total Costs to Date (including HST)||$3,221,464|
The Next Generation
WoodGreen anticipates the project will achieve $5.7 million in utility savings over the useful life of the equipment. Along with the energy savings project and long-term capital plan, WoodGreen is also undertaking refinancing at the portfolio level and a climate change resilience assessment and mitigation as the third and forth aspect of its asset framework. The impact of the overall framework will be a $20 million improvement to WoodGreen’s reserve fund forecast. WoodGreen aims to finance further regeneration in its properties using these dollars, with the goal of pioneering a second generation of projects in its buildings.
According to Mwarigha, WoodGreen’s Vice President of Housing and Homelessness Services, the energy performance piece will not only achieve savings for further investments but will also contribute to affordability and the overall quality of life for tenants, including the air quality and overall comfort of their homes. This model, he says, is suitable to both social housing and the private rental housing market: “Imagine if this model was used for the whole rental housing market. The current practice is for private rental operators to pass on building improvements costs to tenants through increasing rents. Instead, WoodGreen’s model of monetizing energy savings to pay for capital improvements means rents remain affordable for tenants living in the buildings.”
With a project list from BCAs and energy audits, a comprehensive plan, and an innovative model, WoodGreen is well-positioned to achieve major savings from its retrofit project while ensuring comfortable and updated homes for its tenants. WoodGreen’s focus on energy savings and sustainability makes it a leader in Canada’s national goal to reduce greenhouse gas emissions and reverse of the increasing adverse effect of climate change.
Need help doing a BCA or Energy Audit or managing a major project? Contact our Technical Services team!
Extreme Heat – Hot Tips for Housing Providers
Leading up to the summer season, we have already seen extreme heat hit southern Ontario, with a new high temperature record set in Toronto on June 5th. For the community housing sector, a hot summer forecast brings up concerns about tenant safety on the one hand, and higher electricity bills on the other.
Many community housing buildings have no central cooling and, in taller buildings, window openings can be restricted to comply with by-laws. In some cases, tenants use inefficient or poorly installed window units, resulting in very high electricity bills through the summer months. In the aging buildings dominant in our sector, cooling equipment has to work harder to combat hot air and the sun’s rays coming in through leaky building envelopes and old windows.
Worse still, having no cooling at all poses a real danger to tenants from a health perspective, especially the many vulnerable populations housed in our sector. Health impacts from extreme heat include heat stress, heat stroke, and even death. According to a 2015 report, these dangers are increased during prolonged heat events, when indoor temperatures tend to climb with each hot day in the absence of a mechanical cooling system.
As we head into July, these tips – ranging in cost – can help you address the impacts of extreme heat in your buildings and improve the comfort of your tenants.
Hot Tips for Dealing with Extreme Heat
1. Educate tenants to unplug: invite tenants to unplug unnecessary electronics and appliances, which can give off a small amount of heat when left plugged in. Click here for a poster to hang in your building.
2. Schedule your make-up air: install a Variable Speed Drive (VSD) on your Make-up air unit if you do not already have one and have your HVAC technician program the VSD to provide a higher volume at night to take advantage of cooler nighttime air and slow it down during the hottest parts of the day. Don’t forget to revisit the programming in the fall.
3. Enhance natural air flow: existing operable windows can be modified with guards or gates to allow ventilation while preventing falls. It is important to review local by-laws in this regard; where permitted, this can be a relatively low-cost short-term option. Alternatively, in apartment buildings, replacing existing windows with the operable area on the top portion can ensure both safety and increased ventilation.
4. Provide energy efficient models of ceiling fans or portable air conditioners: some housing providers are supplying tenants with energy efficient ceiling fans or portable air conditioners (window or standing units) to reduce the use of old, inefficient units and to increase comfort. This is a relatively low-cost option for which incentives may be available and which can provide immediate relief while reducing electricity bills. If you allow portable air conditioners to be installed, ensure that they are installed as per the manufacturer’s specifications and are properly ventilated. Poorly installed window A/C units can void window warranties, pose liability concerns, and have serious consequences if they fall out.
5. Reduce “solar heat gain”: poor quality or old windows can allow heat energy from the sun’s rays to pass through into a tenant’s space, causing solar heat gain. Blinds and low-emissivity window films can be added even to existing windows to limit solar heat gain. If you are planning to replace your windows, choose triple glazed units with low-e window films. You can also add shading devices or, in new construction, design shading into the structure.
6. Reflect the sun: dark surfaces absorb the sun’s heat, while lighter surfaces reflect it away. Applying a reflective surface to a building exterior or painting roofs white can result in a cooler building. If you are replacing asphalt shingles, try a light shade.
7. Provide access to cooling on-site: a common area may be retrofitted to provide a cooling space for tenants during extreme heat events. Considerations include cost of retrofitting or adding equipment, 24/7 access, and adherence to pandemic distancing protocols.
8. Improve your building envelope: whether for single-family or multi-unit buildings, upgrading your envelope is one of the top recommendations for improving the thermal comfort in your building. Upgrading or adding insulation, cladding, windows, and doors can improve the air tightness of your building thereby significantly reducing the energy demand associated with cooling (and heating too).
9. Add a central cooling system: if your space heating is through a central forced-air furnace system, you can opt to add central cooling equipment to provide cooling throughout your building. Buildings with electric baseboard heating can be improved by switching to heat pumps with cooling capacity. Any necessary envelope upgrades should first be done to improve your building’s air tightness so that you can reduce the overall demand and size of the cooling system you install.
A multi-pronged approach is needed to balance tenant comfort and financial costs. With extreme heat events expected to increase in the coming years and decades, cooling is increasingly a consideration for housing providers looking to ensure tenant comfort. Implementing measures now can help your tenants while also improving the quality and resiliency of your building.
Many of the suggestions in this article are listed in a June 11, 2015 report from Toronto’s Medical Officer of Health related to extreme heat and building resiliency in the face of climate change.
Provincial Energy Data Reporting – It’s that Time Again
Let’s be honest. Complying with regulations can be a challenge when you are already juggling daily operations, especially during a pandemic. And with the annual July 1 reporting deadline just around the corner, the province’s large building energy data reporting regulation is no exception. Whether you are planning to submit last minute now, or next year, here are some helpful tips to help you understand the regulation and comply if required.
Do You Need to Comply?
Whether you need to comply depends on your organization type and building size. Check out this compliance flowchart to see if you need to comply this year, in 2023, or not at all.
What do you submit?
If the regulation applies to one or more of your buildings, you need to provide:
- Organization details, such as your organization’s legal name and key contact person.
- “EWRB Number” (one per building), which you will either have received by mail already or you can get it by calling Service Ontario at 1-844-274-0689. You also need to include your property’s 15-digit Assessment Roll Number, which you can find on your property assessment.
- Building details, such as the building size, occupancy, number of residential units, floors, year built, address, the size of any commercial space (e.g. retail, worship, daycare), and the size of any pools, outdoor covered/open parking and indoor parking garage.
- Utility bill data, such as for electricity, natural gas, water, oil, propane, including the start and end reading dates and the consumption on each bill for the year being reported. Note that you will likely need to submit more than 12 months of bills to ensure you cover the full calendar year. For example, for 2020, you may need to enter bills covering from December 2019 to January 2021 to ensure all of 2020’s use is included in your submission.
How Do You Submit?
The data must be submitted using the Province’s designated online portal, called EnergyStar Portfolio Manager. To do this, you can create a user log-in, enter the building details in the system, and enter the utility bill data either by manually typing it in or uploading it using the portal’s designated Excel templates. For complete submission instructions, see the province’s Guide to Reporting and Guide to Submitting Through Portfolio Manager.
What Else Should You Know?
Other important points to know are:
- If your building’s utility use is tracked through HSC’s Utility Management Program (UMP), you can retrieve your data from UMP and then upload it to the province’s portal.
- Buildings that are 100,000 square feet or more are required to have their data verified by an accredited or certified professional your first year of reporting, then every subsequent five years.
- HSC has a low-fee Energy Reporting Service if you wish to have us complete the submission on your behalf. While it is too late for us to support submissions this year due to the preparation required, we are available to assist next year. We recommend you contact us well in advance of the July 1 deadline to ensure we can collect and submit your data on time.
For more information, you can contact the province at 1-844-274-0689 or email@example.com.
Worth a Look – BC Decarbonization Retrofit & CMCH Deep Retrofit Tools & Resources
Need expert advice on a project? Looking to learn from other providers’ project successes? Below are several recent tools and case studies that you may find helpful:
YWCA Metro Vancouver’s Semlin Gardens, built in the mid-1990s, needed a major capital renewal. Learn how they used energy retrofit coaching and energy audits to complete an extensive decarbonization retrofit in this short video.
Canada Mortgage and Housing Corporation (CMHC) Expert Community on Housing (ECOH) was created to share housing knowledge and contribute to the development of housing solutions. The ECOH offers webinars for housing providers of affordable housing. Sign up for CMHC’s Affordable Housing e-newsletter for information on webinars, tools, and funding to support your projects.
CMHC also has Housing Solutions Specialists who can connect you with industry partners and help develop solutions on your multi-unit housing projects.
The Pembina Institute, in association with the Reframed Initiative, presents webinars on evolving deep energy retrofit solutions. Reframed is an initiative of the BC Non-Profit Housing Association, the City of Vancouver, and the Pembina Institute to scale up deep retrofits for healthy, safe, and low-carbon housing. The Reframed Initiative and BC Housing are currently commissioning deep retrofit designs for six multi-residential buildings in a six-month exploration lab.
Whether you’re planning a project or just want to learn more, it’s always good to learn from experts and experience around our sector.
Utility Tracking Provides Apples-to-Apples Comparisons
If your building is enrolled in HSC’s Utility Management Program (UMP), you can log-in now to view your utility performance trends up to first quarter 2021.
UMP provides useful dashboards and reports to help you understand how your buildings are using natural gas, electricity, and water. We account for the impacts of weather and rate changes in our system to give you an apples-to-apples comparison of your utility use month to month and year over year.
If you’re not sure how to interpret your data or would like to enroll your buildings, contact HSC Energy Services!
Other Topics? If you’d like to suggest a topic or want a one-on-one review with HSC staff, please contact us!