Trying to understand the federal government’s Greener Homes Grant (GHG) initiative is like trying to do a jigsaw puzzle without any border pieces—you have no idea where to start. After some high-level research and discussions, we hope we can help you understand it a little better.
First, let us figure out what it is NOT, it is not about the $5,000 grant, only for people who live in the country, about finding a system that will meet the criteria for the grant, about trying to make you mad because the products that are near impossible to find, something we should brush under the mat because it will go away, nor is it in our best interest to continue replacing furnaces and air conditioners with like-for-like.
The GHG initiative IS about getting us to think about the whole home as a system, an opportunity to educate consumers on what the cost of heating and cooling will be, an opportunity to partner with those product providers, a responsibility to carbon proof homes against large penalties in the near future, and lastly, an opportunity to reduce each home to near zero carbon production.
NRCan continues to struggle to understand the resistance from HVAC companies to provide whole-home solutions such as windows, doors, insulation, and air sealing.
As heating and cooling contractors, we often feel that the grant money is ours and that we are competing against every HVAC contractor to get a hold of that money.
Well, we are here to tell you that your competition is NOT “Joe’s heat-em and cheat-em” but rather the people who supply insulation, doors and windows, and air sealing. The consumer spends much less to gain access to the money. To capture a part of the grant, our industry comes with a very high price tag and very limited access to the equipment!
Do not give up
There is a lot we can do to help the consumer gain access to the grant money and create lots of work for us too. The initiative is not about a one-time grant but an incentive to get consumers thinking about and absorbing the news while gradually upgrading the whole home as a system. The upgrading or, better stated, the tightening of the home’s energy envelope will drive equipment replacement regardless of age or condition by simply making the current system obsolete by size and comfort alone.
If we envision the initiative as a target with the grant being the bullseye, and we all compete for the center, HVAC contractors will lose all the time; however, if we think about the rest of the target as being fair game, we can claim victory!
The paradigm shift
The carbon tax is real and we can only assume that most people, you included, have no idea what has been happening to you and your household expenses. When was the last time you looked at your energy bill, I mean REALLY looked at your bill? Did you notice the extra tax? The additional $10 to $30 added to your total, by way of a carbon tax, I did not think so!
If we do not change our paradigm and we continue to offer like-for-like heating and air conditioning systems, we are going to set our customers up for disappointed and avoidable expenses.
Remember the system you sell today should last 12 to 15 years. Promoting low-cost system replacement will create post-purchase pain later on for consumers who opted for and were recommended the lowest installed cost option today. Currently, the federal carbon tax sits at $0.0783/m3 of natural gas and will increase to $0.3324/m3 in 2030. If everything else stays the same, it will cost four times as much to heat your home with natural gas in 2030 as it did in 2018. The average homeowner will pay over $1,000 in a carbon tax for their home heating if they are heating with natural gas.
For HVAC contractors, the challenge is explaining to customers that what looks like the best option today will cost them way more money overall. If we can make a fact-based rational argument that resonates with consumers, we will hopefully save them disappointment down the road.
Money talks
Indeed, the best first move is to make the highest return on investment (ROI) improvements to the building envelope to reduce the heat loss. Upgrading the attic insulation to R-60 and doing air-sealing is cheap, maintenance-free, and minimizes the draftiness of the house by eliminating the chimney effect. A Manual J calculation, or better yet, an F280-12 calculation backed by a blower-door test, will show you the effectiveness of these changes on heat loss. Even if the homeowner is only thinking of taking advantage of the Greener Homes Grant to make insulation, windows, and doors improvements, what you are likely to find is that the existing HVAC equipment is grossly oversized.
So, now that improvements have been made to the envelope, we can look at correctly sizing the equipment and going with a hybrid-heat system utilizing an air-source heat pump (ASHP) with a natural gas furnace. The by-product of such upgrades could reduce the consumer carbon tax by up to 50 per cent or even more. But we need to show them the money. There are carbon tax calculators available online much like the one pictured here.
Carbon tax calculator
Using this tool will allow you to show them their actual spending and savings opportunities. The theory is that we let the grant money fund the tightening of the envelope, and the energy savings combined with carbon tax savings will fund the system replacement. A typical home will save over $5,000 in tax savings and $6,500 in energy savings. Talk about an impressive ROI!
Now that you have shifted the way you see the initiative, pass those thoughts along and help your customer take full advantage of what the GHG was meant to accomplish. We can do it with currently stocked equipment. Every time you get a call for a split system air conditioner, think ASHP!
Of course, we can supply a heat pump water heater and capture $1,000 in GHG money! As Benjamin Franklin said, “The bitterness of poor quality remains long after the sweetness of low price is forgotten.” The modern equivalent may be that “the bitterness of the carbon tax will remain long after the sweetness of the cheapest installed option is forgotten.”
Five years from now, your customers will be sending you flowers to thank you for changing their paradigm!