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Improving the Payback of Energy Retrofits in Multi-Residential Markets

There are a number of factors in addition to the cost of energy that should be considered when evaluating the payback or lifecycle cost of an energy conservation retrofit project in your building. These include maintenance or service costs (either positive or negative), future capital cost avoidance, capital depreciation tax credits, labour or salary impacts, and other soft benefits such as improved occupancy comfort and indoor air quality.

Improving the payback of Energy Retrofits in the Multi-Residential Market can be done through the use of a relatively new program from the Canada Mortgage and Housing Corporation (CMHC) that will provide a reduction in your CMHC insurance premiums that is equivalent to the percentage energy savings of the project to a maximum of 25%. It is common that with an energy conservation retrofit program implemented with Efficiency Engineering Inc. a utility savings of 25% or more can be achieved, resulting in a corresponding reduction of your CMHC insurance premiums of 25%.

Considering a $25M multi-residential building purchased with CMHC financing that can be more attractive than typical conventional financing; mortgaged at 80% LTV with a 35 year amortization period and current posted rates of 1.61%; through this rebate program the insurance premiums would be reduced by up to $6,500 per year. This amount goes to reducing the simple payback period, improving the ROI and going directly to your bottom line.

 

Mike Zongor, P.Eng.