Will California Leapfrog Ontario on Home Energy Ratings?

“Fantastic semi on a quiet cul-de-sac. Mechanicals and insulation completely updated by owner with geo-thermal system and radiant heat flooring. Home energy rating in top percentile. Close to schools and shopping.”

Imagine seeing a real estate listing like this that puts value on energy efficient homes and protects home buyers from sticker shock when they receive the second bill for their home purchase: the monthly utility bills.

This is one of many policy and financing recommendations in a new report from the California Clean Energy Fund (CalCEF). It ties home energy efficiency improvements to “trigger points” in a home’s financial life cycle, that is, at events such as the time of sale, renovation or when energy prices rise. The report provides a manual or roadmap for lenders and regulators on how to unlock energy efficiency at key points in the marketing and ownership of a home and makes suggestions about disclosure, enforcement, incentives and finance.

For time of sale, the report advocates mandated energy disclosure for seller and buyer, based on a standard asset rating scheme, and also suggests that home energy features be included in real estate MLS listings. According to the authors, these actions would make enormous inroads in creating awareness of efficiency, equalizing the knowledge basis of all buyers who purchase all sizes and types of homes, and protecting consumers.

In my most recent energy conservation report, Restoring Balance: A Review of the First Three Years of the Green Energy Act, I urged the Ontario government to take similar action to protect consumers by implementing one of the provisions contained in the Green Energy Act (GEA), passed by the Legislature three years ago. Acting on this commitment would allow Ontario to fulfill one of the objectives of the government’s Long-Term Energy Plan, which is to be a North American leader in energy efficiency.

CalCEF is proposing a novel approach to strengthening energy conservation in the residential sector – linking policy to the major milestones in the ownership of a property. In Ontario, we don’t have a comprehensive vision like this.  Instead, our limited action consists of a pilot home energy rating program run by Enbridge.  It is a commendable but rather piecemeal approach by one of the gas utilities. If California can act on a grander scale, so can we. Ontario can avoid being overtaken on this issue since we already have the statutory authority to act. Unless we are content to watch California lead the way for North America as it so often has on environmental issues associated with the use of energy.