Appetite for environmentally-friendly homes is expected to surge
Neil Sharma
REP
Appetite for environmentally-friendly homes is expected to surge in the years ahead, but incorporating green technologies still requires outside-of-the-box thinking.
“The next generation of buyers will flock to it,” said Tom Storey of The Storey Team with Royal LePage Signature. “The average buyer in Canada is 32 years old and the next generation is coming soon and it’s more focused on the environment than previous generations. For them, environmentally-sustainable developments will be attractive.”
But the problem is that eco-friendly developments have yet to proliferate the real estate market and, because of their cutting-edge technologies, existing ones are more expensive than standard builds.
However, Subterra Renewables is a thermal energy company that pays developers to install its technology in their buildings in lieu of conventional equipment, like natural gas boilers. In doing so, developers reduce both their greenhouse gas output and capital costs, and save residents money.
“The incentive is for developers to spend as little as possible when they’re building these things,” said Lane Theriault, president of Subterra Renewables. “We look for a way to make it a net benefit for the developer. The way to do that is, rather than putting in conventional equipment, they forego the expense of putting that in because we’re the ones who pay for our system. And because our system is so efficient, we can sell energy back to the residents at a price that’s comparable to what they would have paid if they’d used a conventional system, so everybody wins.”
Incorporating green technologies could also buy developers some grace with city planners, which could positively impact their bottom lines.
“They don’t have to spend money putting in boilers and cooling towers, so right away that expense comes off the project budget,” he said. “If the building code gets tighter, this is a way to meet the code, which is often measured in an energy efficiency number of greenhouse gas per square foot, and you spend our money to do it instead.
“The last one is around zoning and density: If you eliminate the mechanical penthouse for the conventional equipment, the city oftentimes looks very favourably on the use of renewables in the building and they’ll let you repurpose that space for an additional sellable area. In Toronto, some of these places are getting up to $1,500 per square foot, so if you can recover that 2,500 square feet of mechanical penthouse space, that’s a few million bucks.”
While Subterra pays developers to use its technology, it makes its money back on 30-year amortization payments from residents.
“We sell energy back to residents with a fixed payment, so they perfectly hedge their energy costs and know all their payments going into the future,” said Theriault. “The total cost is about equal to what they would have paid in a conventional situation.”
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