Heat pumps can cut costs while cooling tenants

This article was written by John Lorinc and was published in the Globe & Mail on June 24, 2022.

Low-carbon HVAC systems can provide a greener alternative to baseboard heaters, window-mounted ACs

When it comes to reducing carbon from buildings, the best solutions are the two-for-one deals – those design choices or retrofits that deliver twinned benefits for the price of one.

With Passive House architecture, for example, buildings that are constructed or renovated with extra-thick insulation and triple-glaze windows, to minimize energy loss, also require highly effective ventilation, meaning these structures use far less energy and are also filled with fresh air.

In the case of design that relies on tall timber or natural finishes, the use of materials such as wood means not only sequestering carbon, but also reducing the socalled off-gassing associated with synthetics, that causes poor indoor air quality, headaches and drowsiness.

A Toronto firm, Bondi Energy, has developed another variation on the theme – a straightforward and relatively inexpensive approach to retrofitting older multiunit residential buildings with technology that both improves energy efficiency while also providing cooling to un-air-conditioned dwellings – a fix that has become critically important at a time when the rising incidence of extreme summer heat can prove to be deadly, as happened in B.C. last year, when 619 people, many of them seniors, died during the so-called heat dome.

The three-year-old company – founded by an apartment building investor and a mechanical engineer specializing in low-carbon HVAC systems – swaps out aging baseboard heaters and windowmounted air-conditioners for airsource heat pumps, which are located on balconies. These devices provide both heating and cooling, and use a quarter to a third of the electricity of baseboards, thus reducing utility costs at a time when hydro rates are rising rapidly. (The company also replaces gas-fired boilers with centralized electrical HVAC systems.)

As Bondi co-founder and president Belinda Gilbey points out, the increasing use of electricity is forcing even relatively green utilities, such as Ontario Power Generation, to rely more heavily on gas-fired generation during peak periods, especially on hot summer days when the loads associated with air-conditioning use spike.

“We know that in North America, the burning of natural gas is the second biggest contributor to greenhouse gas emissions behind transportation,” Ms. Gilbey says, noting that there are about 400,000 apartments in Ontario that currently use electric resistance baseboard heaters. “So heat pumps are a solution to that problem. If you can get buildings off gas and put in heat pumps for heating and cooling, you’re going to save a ton of gas.”

Aaron Graben, Bondi’s other co-founder and vice-president, adds that landlords and property managers are increasingly thinking about mitigating the longterm financial risk associated with rising energy prices. And, as he says, “it trickles down to the context of the actual tenant and affordability. Now there’s a conversation about energy justice.”

To date, the company is targeting older rental buildings, condos and long-term-care facilities. It has completed 283 units on a pair of apartment buildings in Mississauga and is working on another 177 in the same complex. Another project is under way in downtown Toronto, with 94 apartments. Ms. Gilbey says the capital cost is $1,000 to $2,000 a suite.

Bondi lists nine projects in all on its website, with estimated annual electricity savings from $340 to $1,300 for each completed suite, with increases in the cap rate (a valuation metric used by asset managers that divides net operating income of the property by the current market value or purchase price) running from $7,250 to more than $32,000 a unit.

Yet, while the benefits appear to be broad-ranging, the business case for this kind of retrofit still doesn’t meet the pay-back timelines that most apartment building owners (and condo corporations) want from such investments. Some of Bondi’s projects relied on time-limited federal retrofit grants as well as financing from The Atmospheric Fund (TAF), a non-profit that underwrites clean building projects. The two Mississauga buildings, for example, qualified for a $2.5million assist.

Those subsidies represented about a quarter of the cost, says Bryan Purcell, TAF’s vice-president of policy and programs. “We’re not quite there without subsidies for a typical owner.”

Ms. Gilbey says Bondi’s goal is to develop a business model that stands on its own, and makes sense for property managers. The firm offers to set up pilot projects in a handful of units within a building so landlords can do sideby-side comparisons.

But Mr. Purcell points out that municipalities may soon begin to impose air-conditioning requirements on landlords, which represents a future regulatory-compliance expense on top of structural shifts in the price of energy. As well, public sector energy agencies, such as the Independent Energy Systems Operator, are beginning to think about providing incentives to encourage this kind of retrofit, as is done with gas utilities that provide residential customers with grants to swap out older furnaces with high-efficiency models.

For landlords and condo corporations, Mr. Purcell adds, the best time to begin exploring this kind of retrofit is toward the end of the life-cycle of existing HVAC systems, which typically need to be replaced after 25 years. “We encourage people to take that longterm perspective.”

Author: Ray Nakano

Ray is a retired, third generation Japanese Canadian born and raised in Hamilton, Ontario along with his 4 younger sisters. He resides in Toronto where he worked for the Ontario Government for 28 years. Ray currently practises in 2 Buddhist traditions: Jodo Shinshu and that of Thich Nhat Hanh. Ray is passionate about climate action and very concerned about our Climate Crisis. He has been actively involved in the ClimateFast group (https://climatefast.ca) for the past 3 years. He works to bring awareness of our Climate Crisis to others. He has created the myclimatechange.home.blog website, for tracking climate-related news articles, reports, and organizations. He is always looking for opportunities through the work of ClimateFast to reach out to communities, politicians, and governments to communicate about our Climate Crisis. He is married and has 2 daughters and 2 grandchildren. He says: “Our world is in dire straits. Doing nothing is not an option. We must do everything we can to create a liveable future for our children, our grandchildren, and all future generations.”

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