Buying into eco-friendly construction
Third-party energy providers give developers incentive to ‘go green’ by installing renewable heating, cooling systems
When most of us think about the primary sources of greenhouse gas (GHG) emissions, we most often think of the exhaust pipe of a car or a big industry smokestack. But the reality is that emissions from buildings make up 40 per cent of global emissions. And in big cities like Toronto and New York, emissions from buildings contribute upwards of 60 per cent.
While some of this is a result of how much carbon the electrical grid is making, the lion’s share of building emissions comes from burning natural gas on-site for space and water heating.
Without tackling the direct use of fossil fuels in buildings, we won’t ever be able to have a meaningful impact on the amount of GHG emissions that are produced every day from our homes and offices.
Whether or not a building will be relegated to a lifetime of spewing carbon is largely based on the decisions of the developer who constructs the building in the first place.
In spite of many other sound technologies to heat and cool buildings, the incentives for developers encourage the continued installation of natural gas boilers.
First, developers get little back from making additional investments in a building when the occupants are the ones that ultimately benefit from lower operating costs. Next is the perceived risk of doing things differently. For developers, sticking with “tried and true” beats taking a chance on unfamiliar technology.
In the end, homeowners will end up paying more to heat and cool their homes and, at some point in the near future, they will need to pay for an expensive heating, ventilation and cooling (HVAC) retrofit at a cost far greater than if a clean system had been installed at the outset.
To change this, we need to change the incentives for the decision-makers to encourage the best outcomes for our society.
Third-party energy providers (3 PEPs) are a private-sector solution that can change the financial incentives for building developers.
These providers create an incentive for developers to “go green” by installing renewable heating and cooling systems in new developments at their own expense. This saves the developer the cost of installing conventional equipment and improves their profitability, the ultimate incentive for the developer.
The 3 PEP recovers its investment by selling energy back to the occupants, often at a fixed price that is similar to what they would have paid in a conventional setting. The added benefit is homeowners no longer have to worry about ever-increasing energy prices driving up utility bills.
These providers are also experts in these systems, so developers can take comfort in doing something new without going it alone. If we’re going to create meaningful change in the way we build our homes for the future, we need to be sensitive to the needs of the people who are building them. Third-party energy providers can help do that.