December 15, 2006

Green Building

How to finance green building projects

SAUL CHERNOS

correspondent

TORONTO

With uncertainty about the future of federal government grant programs, green building proponents are looking to alternatives through other levels of government and the private sector.

The Commercial Building Incentive Program (CBIP) offers up to $60,000 for new commercial, institutional and multi-unit residential buildings that are more energy efficient than ones built to the Model National Engineering Code for Buildings (MNECB), while the Industrial Building Incentive Program (IBIP) provides up to $80,000.

Natural Resource Canada has run both programs through its Office of Energy Efficiency (OEE) for close to a decade. However, the Conservative government gave notice earlier this year that it was placing the programs under review and would only guarantee funding until March 31, 2007, pending what it billed as a new federal strategy for reducing greenhouse gas emissions and ensuring clean air, water, land and energy.

Another OEE program, the Renewable Energy Deployment Initiative, provides 25 per cent of funding for renewable energy systems such as solar thermal heating of hot water. It, too, is slated to end Dec. 31, possibly replaced by another program.

“For future elements we have to stay tuned. We are expecting some announcements shortly,” Peirre Gučvremont, chief of the new buildings program with the OEE, said at the recent National Green Building Conference in Toronto.

Speaking on a panel addressing financing issues, Gučvremont said roughly 850 buildings have been validated through CBIP over the past decade.

He added 200 buildings that received CBIP funding in 2005 accounted for about 15 per cent of all new construction floor space in Canada that year.

Estimating annual reductions of carbon dioxide emissions at roughly 240 kilotonnes, and average energy savings of participating buildings at $47,000, Gučvremont said a recent Natural Resources Canada study concluded the energy intensity of commercial-institutional buildings is anywhere from 1.6 to 2.1 gigajoules per square metre, while the average of the buildings OEE has validated under the programs is about 1 GJ per square metre.

“That easily demonstrates that this is worth doing, with a good payback.”

With uncertainty surrounding CBIP and IBIP, speakers discussed alternative sources of funding.

Stephen Carpenter, president of Enermodal Engineering in Kitchener, said green building proponents should pursue other, non-governmental sources of funding, including programs run by energy utilities.

One example is the Enbridge-Union Gas Design Assistance Program (DAP), which contributes $4,000 towards studies addressing energy efficiency at the concept-design stage.

“It provides seed money for a consultant to analyze the plans and look for energy efficiency options, costs and payback,” Carpenter said. You don’t have to and implement it if the study shows the payback is too long.”

Enbridge offers an additional incentive of 7.5 cents for each cubic metre of gas a new building saves, up to a maximum of $15,000, while Union Gas has product-specific incentives, including heat recovery ventilators and condensing boilers.

Municipally, the Better Buildings New Construction Program (BBNCP), run by the City of Toronto and Toronto Hydro, offers up to $13,000, for early concept designs and inplementation.

Money is also available across the country through the Green Municipal Fund. Run by the Federation of Canadian Municipalities, the fund is intended for municipal projects, but Carpenter said there may be room for private partner involvement.

“If you have a tie-in with a municipality — for example a YMCA where the municipality is donating the land and the YMCA is building the building, they would consider that a municipal project,” he explained. “They provide up to 50 cents on the dollar for doing feasibility studies — looking at green or energy-efficiency measures, and then if you move into construction, they’ll provide low-interest loans and in some cases grants.”

Carpenter said providers of ground-source heat pumps and other products offer equipment for free in return for reimbursement through energy saved by these products, and some investment funds are willing to provide equity or capital funding for buildings seeking LEED certification.

“They would either take an equity position or be paid through the energy savings,” Carpenter said. “With all these options, there’s no excuse for saying energy efficiency or building green costs extra money. There are ways to get around the funding issues.”

The Ontario Power Authority’s Conservation Fund plans to offer $3 million next year for non-profit organizations proposing innovative projects, said Peter Love, Ontario’s chief energy conservation officer.

The OPA is also working with the Building Owners and Managers Association (BOMA) on a retrofit program in Toronto.

“We have a target of 150 megawatts of retrofits for existing office buildings, and we’re working with the industry association on lighting redesigns and chiller replacements to achieve that target,” Love said.

Financial institutions represent yet another avenue for consideration. Roger St. Louis, regional manager of TD Friends of the Environment Foundation, said his organization, affiliated with TD Bank Financial Group, offers grants for assorted environmental projects.

Recipients are typically from the public sector, including education, health care and not-for-profit

“Some are related to the green housing industry,” St. Louis said. “These projects are a priority. We can see it’s the wave of the future, and we want to be part of that future.”

Advice for grant seekers: Get help

For green building proponents wanting to pursue the larger government grants, Enermodal Engineering’s Stephen Carpenter has some advice: Hire a specialist.

“When looking at these programs, you really require someone who is skilled and has invested time to learn the software,” Carpenter says. “It’s not something you pick up on the weekend.” Carpenter recommends two separate energy models — one at the concept design stage, when the floor plan is done, and then a final simulation on the completed designs.

“If you wait and do all your energy modelling at the end, the design team will say things are too late, especially with ground-source heat pumps and ventilation heat recovery,” Carpenter says.

“We then do a final simulation on final, completed designs to look at actual performance.”

– CHERNOS

Print | Email | Comment