The cost of adding energy-efficiency measures to a home don’t always add up to big savings, a new report from the Residential Construction Council of Ontario (RESCON) finds,

Released on March 27, the Super Semi Energy Efficiency Demonstration Project report presents the findings of a year-long case study prepared in part by Milton-based builders Country Homes.

The company built two nearly identical housing units – adjoined haves of a semi-detached building. One was an all-electric home designed and built to the Canadian Home Builders’ Association (CHBA) NetZero energy program. The other was designed to be a low-carbon hybrid home that used fuel-switching, combination hybrid gas and electric heat.

The intent of the study was to examine the return on investment from the increased costs to bring a building up to net-zero standards versus the actual savings realized by occupants in the real world.

The findings showed discrepancies between annual energy use simulation software and the homes’ actual performance. Each building consumed more energy than predicted. The study also found that moving too far beyond the current building code requirements for energy-efficiency measures can result in a negative return on investment.

The study found that one of the largest variations in energy use between computer simulations and real-world performance was observed in base loads such as lights, appliances and domestic water heating. Occupants’ use of technology—computers, video and sound systems, Wi-Fi networks, charging etc. could likely be driving this usage. This, in turn, drives higher total energy use, higher internal heat gains and higher cooling loads.

Even solar electricity generation fell short when it came to performance. At its maximum generation, the all-electric house was unable to meet its occupants’ requirements and fell short of the home’s net-zero energy target. The demand for electricity exceeded the available solar supply in every month of the year, and particularly in the winter. Electricity had to be purchased from the grid to keep the home heated.

And in terms of return on investment, the hybrid house had a simple payback of 7.6 years, while the net zero home was closer to 45 years. The average annual energy savings on the hybrid home were $555, and the cost to install the improvements was $4,215. The incremental cost of building to the net-zero standard was $51,123, with annual energy savings of $1,132.

“Through regulatory mandates, there is a move to fully electrify all new buildings and homes to meet net-zero targets in order to combat climate change,” said RESCON president Richard Lyall. “However, evidence from this demonstration project indicates there are concerns as energy savings that result from these moves are limited and don’t always justify the additional construction price tag for consumers, such as spending over $50,000 to save a homeowner $600 per year on their utilities.

“The findings of this study are important because the residential construction industry is facing a perfect storm of issues, and we are in an unprecedented housing crisis. As codes and standards are updated, we should not be adding more costs to housing without due consideration as to whether they really make sense, especially considering the looming electricity supply crunch to Ontario’s grid.”

“We will continue to strive for a better-performing home, both from an environmental perspective, but also an economic perspective,” said Christian Rinomato, director of sustainability with Country Homes. “We are in the midst of an affordability crisis and, as a builder, it is our responsibility to build better homes that perform efficiently and are affordable to operate.”

Since major policy decisions such as changes to building codes are based on assumptions derived from software models, RESCON says there is growing concern that Canada’s climate strategy with respect to homes and buildings may be misguided: the limited energy savings homeowners realize from added conservation measures do not always justify the incremental construction costs imposed on new housing.

“Through our current provincial building code, new home builders are already leaders and a decade ahead of other provinces when it comes to energy-efficient practices,” said Lyall. “Developers, builders and consumers are facing crippling taxes, fees and development charges that add as much as 31 percent to the cost of a new home. Any steps to impose drastic energy-efficiency measures without a full cost-benefit analysis are a recipe for disaster.”

“From the builder’s perspective, we feel hand-tied when programs are forced upon us,” said Rinomato. “We are currently striving for 20 percent better than the building code and believe it should be up to us on how we get there.”

This study points to one overarching conclusion: more research is needed to verify and quantify actual energy usage of occupied homes compared to hypothetical annual energy use computer simulations. The accuracy of annual energy use performance simulations becomes even more critical as this forms the basis for which building code requirements are developed.