Buying Homes Of Tomorrow Now Saves Money, Energy

"The reality is today that energy conservation puts dollars back into homeowners pockets," says Professor Kim Pressnail of the Department of Civil Engineering. "Homebuyers often go for the least capital cost initially without considering future operating expenses."

In a paper presented this month at the 33rd Annual General Conference of the Canadian Society of Civil Engineering, Pressnail and colleagues compared the cost of building a model home to the minimum standards of the Ontario Building Code and associated energy costs to the energy saving of building an R2000 home, an energy efficient standard developed by Natural Resources Canada. They found that the cost of upgrading a $160,000 home to the R2000 standard was $5,560--an increase of just 3.5 per cent. The upgrade translated into energy savings of $818 a year. If a homeowner paid for R2000 upgrades by increasing mortgage payments, she could generate $423 a year in annual cash flow on energy savings.

"For the standard home upgraded to R2000, the internal rate of return was calculated to be over 14 per cent--greater than that achieved by other low risk options, such as bonds," says Pressnail, who adds that the returns are even greater if fuel escalation costs are considered. "Since houses built today have a 100-year lifespan and since energy prices will surely rise, the economic and environmental case to build better houses now is even more compelling."

According to Statistics Canada, there were 233,431 homes built across Canada in 2004, translating into more than 200,000 missed opportunities to build more sustainable, energy-efficient homes. By asking for better-built, more energy-efficient homes now, consumers can live in a more comfortable and durable home while saving money and the environment. The research was supported in part by the Natural Sciences and Engineering Research Council and the Neil B. Hutcheon bequest.