SuperGreen Vs. R-2000

In recent discussion with some folks, the question was asked "Isn't Super Green a bit much? Isn't R2000 / GreenHome (Energuide 80 rated houses) good enough? Is it worth the extra effort?"

So, to assess the difference between doing a SuperGreen building vs. a regular R2000/GreenHome, I built an example building to run through HOT2000, NRCAN's residential energy analysis software.

Example House:
The example building modeled is actually a 4-plex building consisting of two apts up and two down. The building is basically a large residential building, 40'x52' in Whitehorse, with full basement. I modeled it as half a duplex and then doubled some of the inputs (occupants, baseloads, etc.) to simulate two families. HOT200o doesn't explicitly model apartments, but since this building really is just a big "house", this is how I tricked HOT2000.

R2000/GreenHome Model
The base case is a building with basic "R2000" building design: 2x6 w/ 2x4 interior strapping, 2" under slab, ICF basement, all triple-glaze, low-e, argon filled windows, R50 in ceiling, high-efficiency HRV, electric baseboard heating. Under this model, the building take a total of 82,712 kWh of heat a year, or $3,370 in heating each year ($840 /yr / apt unit).


SuperGreen Model
In the SuperGreen model, the base case building was upgraded to R60 wall, R100 in the ceiling (where possible based on the building design - some cathedral ceilings), 4" under the slab, and R60 effective in the basement walls. Under this model, the building take a total of 46,012 kWh of heat a year, or $1,876 in heating each year ($469 /yr / apt unit).

Comparative Return on Investment Savings:
Because the base case model is relatively energy efficient by today's standards, the SuperGreen savings, although significant, seem somewhat modest. However, if we look at this from the building owners' perspective while owning and operating the building for 20-years, a clearer picture emerges.

1) Energy Cost Escalation
Modeling energy cost savings at a fixed energy cost is not reasonable. We know that energy costs are rising, especially fossil fuels which are rising much more than the cost of inflation. In fact, in the Yukon fossil fuel costs are rising at some 10% / year and have doubled in the past 8 to 10 years, even with the recent drop in prices. Electrical rates have been relatively stable in the Yukon, however are scheduled to rise. As people switch to using more electricity for heating, we can expect our electrical rates to rise in response. So, for the purposes of this analysis, I've assumed a electrical cost escalation rates of 5% going forward, which is more than inflation, but less than fossil fuel cost escalation.


2) Cumulative Savings
The second way to look at the relative effect of going SuperGreen over the building ownership period is cumulative savings. If we assume the incremental cost to go SuperGreen is $8000 on this building, the cumulative cash flow is as follows:


So, over the ownership period, going SuperGreen with this building will save the owners almost $50,000! Even if the initial investment was $10,000, this is a 16% return on investment. Can't find an investment that pays those kind of returns these days.


Follow-up Comment (March 15, 2009):
Juergen Korn at Yukon Housing Corp called me last week to tell me he was doing almost the same analysis on cost implications of SuperGreen. However, he had one important observation: In the cash flow model, you are not dropping the cash at the start of the project, as I have suggest in my cumulative savings figure. Rather, you are mortgaging that cost, and as the incremental mortgage payment is much-much-much less than the energy savings, in fact SuperGreen is cash flow positive, right from the start!