The Best Value Guide to Exterior Home Retrofits

Why New Siding is a HUGE Missed Opportunity in Residential Energy Retrofits

So let’s talk about exterior insulation retrofits and how they are a relatively easy project to add into a job where it’s time to replace the cladding, but we can’t track how many jobs have insulation added, or how much/how well it’s installed.

Right off the bat, it’s most cost effective to add exterior wall insulation to the outside of the house and to replace windows at the same time as recladding.

Adding exterior insulation does have financial implications and practical considerations. Evaluating the cost versus the benefits of incorporating continuous insulation to improve energy efficiency is easily done. If siding or cladding is storm damaged, or at the end of it's useful lifespan, then the house is already a great candidate.

This is the point at which we can make the biggest difference in the long-term durability, comfort and energy performance for the homeowner. As incentive programs are often based on single measures, these two integral upgrades are often disconnected. And that’s a whole ‘nuther blog post/case study for ya.

I wrote about the value of an exterior insulation retrofit in this blog article.

Here's a wee video from the Pacific Northwest National Lab in the US, agreeing with me.

Missing this opportunity locks in energy use rates and carbon loads for a whole generation or longer, depending on the cladding materials. That’s 30 plus years. At some point in the not too distant future, all existing houses on the market will have to compete with more recently built houses that comply with Step 3 of BC’s Energy Step Code or the 2020 Tiered NBCC.

What is a Deep Energy Retrofit?

Definition and Benefits of a Deep Energy Retrofit

A deep energy retrofit is a transformative approach to enhancing the energy efficiency of existing homes. Unlike standard retrofits that might focus on one or two aspects, a deep energy retrofit involves a comprehensive suite of measures designed to drastically reduce energy consumption—often by 50-90%.

This includes upgrading insulation, implementing air sealing techniques, and modernizing HVAC systems. The benefits are substantial: not only do homeowners enjoy lower utility bills and a more comfortable living environment, but they also contribute to reducing greenhouse gas emissions. Additionally, these retrofits can significantly improve indoor air quality, providing a healthier home environment.

By focusing on the building envelope, homeowners can achieve consistent, even temperatures throughout the house, eliminating the unpredictability of utility costs.

Importance of Energy Efficiency in Renovation Work

Energy efficiency is the cornerstone of any deep energy retrofit. By significantly reducing energy consumption, homeowners can achieve substantial savings on their utility bills while making a positive impact on the environment.

A deep retrofit can transform an older home into a near net zero energy building, or even a net zero home where the energy produced on-site (often through renewable sources like solar panels) equals or exceeds the energy consumed. This not only slashes greenhouse gas emissions but also boosts the home’s overall energy efficiency by 70 to 80%.

Carefully planned projects with added insulation under new cladding as part of an exterior retrofit that includes new windows save money. Not only is there a minimal increase in installation costs, but the energy upgrades shine when it comes to cost-effectiveness: minimal increase in costs, minimal energy use, maximum occupant comfort, and minimal maintenance for decades.

And, depending on the house type, the home’s original character and charm can be maintained. In other cases, a modern facelift.

Integrating rigid foam insulation can significantly reduce heat transfer and improve energy performance, making it a valuable addition during renovations or new constructions. But it's not the only game in town. Rigid foam insulation is a common new insulation option when it comes to an exterior retrofit.

Mineral wool semi-rigid insulation is a great option where wildfires are common, or in high rainfall areas. It can work in these two extremes because it's fire-resistant and it drains water better than many other materials.

Business as Usual: Suppressed Value, Longer Sales Cycle

That means that a house built and/or renovated to older standards - 2x4 with R12 nominal cavity insulation, or 2x6 with R20 nominal exterior wall insulation will have a 20-30% energy penalty compared to new houses with 2x6 and outboard insulation or double stud construction.

There’s a good chance that the discrepancy in energy use will suppress the market value and lengthen the sales cycle for the older house.

Under our current housing market, this is kind of irrelevant, as purchase prices are still blasting past asking prices regardless of house condition and energy use.

Higher Effective Insulation Values are Energy Efficient = More Future Value

However. The market will change. It always does. And there are other factors that could influence how people purchase their house. For example: mandatory energy labelling means we’ve got a different playing field.

While mandatory labelling might be a longtime pie-in-the-sky dream for this gal, it doesn’t really matter if/when it is instigated, because the performance path for both the BC Energy Step Code and the National Tiered Code leans towards an ERS label, with energy performance verified by an Energy Advisor.

If the bulk of homebuyers can be educated to look for that label, or require it as a condition of sale, then whether it’s mandatory under code or not is moot. Yes, I have that dream too.

Point being, the investment people make now, today, this year and going forward in their existing homes is going to be impacted by new performance-based code compliance houses that go up for resale.

Non Energy Benefits From Retrofits Add Up for Energy Efficiency, Too

Let’s take a moment to frame up how we look at whole house energy or deep energy retrofits. It’s not just about saving energy and it’s not just about reducing our CO2 emissions. It’s about people who live in houses, buildings, and neighbourhoods, the infrastructure that surrounds them, and the associated societal benefits that come from energy security.

A successful retrofit provides many non-energy benefits like lower financial burdens, extended lifespan of the investment, improved value, stable tax base, increased resiliency and decreased carbon footprint. You can extrapolate broader societal benefits from each of these, especially what it means to have a healthier indoor environment and how that impacts people’s quality of life in general and reduces health care costs overall.

But I digress.

Back to exterior retrofits. You can reduce air leakage and improve the thermal performance of a house dramatically by adding the equivalent of a windproof, breathable parka to it. This creates an air seal that stops air movement into and out of walls, making the home more energy-efficient and comfortable. We’ve got the technical know how, this is not rocket science, it’s building science. We need to get to whole house energy retrofits.

Deep Energy Retrofit Process

Steps Involved in a Deep Energy Retrofit

Embarking on a deep energy retrofit involves a series of well-planned steps to ensure maximum energy efficiency and comfort. Here’s a breakdown of the process:

1. Assessment: The journey begins with a thorough assessment of the building’s current energy efficiency. This step identifies areas where improvements are needed, such as insulation gaps, air leaks, and outdated HVAC systems.

2. Air Sealing: Sealing air leaks is the next critical step. Preventing unwanted air movement reduces heat loss and gain, and also improves indoor air quality.

3. Insulation: Upgrading insulation in exterior walls, attics, and floors is crucial. This step reduces heat loss in the winter and heat gain in the summer, making the home more energy-efficient and comfortable.
   
   

4. HVAC Upgrades: Modernizing the heating, ventilation, and air conditioning systems ensures that the home’s climate control is as energy-efficient as possible.

5. Renewable Energy: Installing solar panels or other renewable energy systems can further reduce carbon loads and fossil fuel use, pushing the home closer to net-zero energy status.

6. Commissioning: The final step involves testing and commissioning the upgraded systems to ensure they are operating efficiently and effectively.

By following these steps, renovators, contractors, and homeowners can achieve a deep energy retrofit that not only enhances energy efficiency but also reduces greenhouse gas emissions and provides a healthier, more comfortable living environment.

Net Zero Renovation Shines A Light on Exterior Wall Insulation

My favourite pushing the envelope (absolutely, yes, pun intended) case study:

Peter Darlington (Solar Homes) did his first CHBA-labelled Net Zero Renovation on his own house. Fairly standard issue for residential construction for its vintage, R12 walls, R12 in the foundation and R40 in the ceiling. The blower door test was 4.55 air changes per hour.

He added R16 to the exterior main walls, under a stucco finish, the ceiling was increased to R60, and the foundation walls were bumped to R20. The final blower door test showed the house, at 1.27 air changes, to be more airtight than the R2000 standard.

I chatted with Peter in Episode 9 of my podcast, This Must Be The Place, back in 2021 about his project and what it was like building his own energy efficient home-the first home in Canada to be labeled under the Canadian Home Builders Association Net zero Renovation Pilot Program.

Foam Insulation: Increase Thermal Resistance and Decrease Air Leakage

The house started out at 167 gigajoules per year for space conditioning and water heating, and ended up at zero, with a cold climate air source heat pump and 15.6 kW of PV that offsets all of the energy use of the house on an annual basis. Peter is now providing this exact same package at a price point that is keeping him booked solid in a market with very inexpensive gas.

Here’s the thing: you don’t have to go that hard with a big budget project to get great energy improvements with exterior wall insulation when you’re dealing with a straightforward cladding job. Using rigid foam insulation - creating that continuous thermal blanket - can significantly reduce heat transfer and improve indoor temperature consistency.

You can add a couple of inches of rigid or semi-rigid board, create an exterior air barrier and walk away with a 20-30% annual energy savings, starting right now and running for the duration, for a 15-20% premium, depending on the amount and type of insulation used. The math isn’t hard, it’s absolutely a winner for the homeowner.

When it comes to Retrofits, What's Being Left on the Table?

So why isn’t this happening? Well, it might be, but unless someone includes it in their incentive/rebate package under the ERS program, we’ll never know about it. Why? Because recladding (and/or replacing windows) doesn’t require a building permit.

Data from Natural Resources Canada’s EnerGuide for Houses database includes more than 1 million Canadian homes. Only 4% of recorded energy efficiency renovations includes exterior wall insulation when tens or maybe hundreds of thousands of homes get new vinyl siding over existing walls every year. 

This speaks volumes about the need to develop comprehensive packages for homeowners that take the guesswork out of their renovation projects, coupled with the need to enlist siding installers in energy conservation programs. These packages should include the right insulation products to ensure durability, energy efficiency, and moisture management.

I can't point it out enough times: Adding continuous insulation during these renovations is essential for improving a home's energy efficiency and thermal performance.

Value-Add Services: Rigid Foam Insulation Reduces Thermal Bridging

What’s that you say? Cooperation, collaboration, value add? Across heavily buttressed siloes of the building industry?!?!

Hear me out.

NRCan’s database includes about 40,000 documented exterior insulation retrofits over 23 years. That’s about 1800 houses a year.

Not only is there an energy efficient improvement due to more insulation reducing thermal bridging, NRCan’s database shows that there’s about a 15% improvement in air tightness associated with an existing wall retrofit. Energy cost savings makes the value-add a near no-brainer.

There are 14 million houses in Canada. How many don’t get an energy assessment or consider energy conservation measures because they’re just replacing the siding?

More than 1800, is my guess.

You can't manage what you can't, or don't, measure.

There are 3500 siding and cladding firms that make up an industry worth about 14 billion dollars annually. If only 0.1% (that’s point one percent) annual spend comes from recladding existing houses (just a wild-ass guess from me, no readily available market intelligence), and an average recladding job costs $40,000, that accounts for 350,000 houses a year.

I have NO idea if that’s close to reality.

Even if only 100,000 houses a year that get resided in Canada, if we insulate exterior walls, it’s a significant dent in upgrading a large portion of the housing stock, quickly. Heck, if we can get 18,000/year with a few inches of exterior wall insulation acting as exterior air barriers, that’s 10x the number in the NRCan database over a quarter of a century’s worth of energy modelling.

You can't influence what you can't, or don't, measure.

We’ve got the know-how to change this quickly - the technical part of it is well in hand and we’ve got a network of strong resources to help us out across the country. That network includes insulation manufacturers and distributors who employ technical directors and their teams, all of whom are well-versed in building science and high performance new house construction.

Some even have code-ready registration for their exterior wall insulation systems. We have the expertise to ensure a good regional solution when we add insulation to wall systems, whether it's insulation panels of foam board (closed cell foam, open cell foam insulation) or semi-rigid mineral wool, spray foam, or even loose fill insulation.

Building Science Meets Building Codes Meets Best Practices In Exterior Home Retrofits

Building science is key here: the whole wall assembly must work to reduce heat loss, air leaks and thermal bridges with a continuous layer that is installed properly under new siding that ties into windows and doors. Board insulation often requires strapping to create a rainscreen or drainage plane behind the new siding. Each insulation product and installation method is a little different, and regional requirements like fire resistance will impact what additional insulation is the best choice.

Does it make sense to improve the R-value in the wall cavities at the same time?

We also need to ensure that this work comes under some form of regulation. Remember that in most parts of Canada, replacing siding or cladding is a non-permit project. That means there’s no requirement to meet building codes, or to have an energy assessment done. It’s considered a straight replacement, which doesn't account for the impact of the current air and vapour barrier configuration.

This important upgrade, installed properly, gives homeowners a huge reduction in heating bills and cooling costs. Minimizing the thermal bridging and air sealing at window frames and door frames will improve the performance significantly. Done improperly, it's going to cause moisture issues in the wall cavities as a result of conflicts between the air and vapour barrier and the outside insulation layer.

You can't understand what you can't, or don't, measure.

When you add insulation to the outside, there are 3 key building science related issues:

1. The wall insulation for the whole wall system must meet the minimum inboard/outboard insulation ratios for the climate zone to ensure there’s minimal potential for condensation inside the wall cavities.
2. Each wall assembly must be evaluated for permeability - does the wall system dry to the exterior or to the interior? Where is the air barrier?
3. Airtightness testing to show thermal bypasses (different than thermal bridges) in outside walls and into attic spaces and confirm mechanical ventilation requirements.

Additionally, it is crucial to know the interactions between your new air and vapour barrier when adding insulation to the existing walls of a house. This ensures proper moisture management and prevents condensation issues within the wall assembly.

Find out more about exterior insulation and retrofits in the Whole House Energy Retrofit course.

The Scaffolding is in Place for Exterior Siding Retrofits, Now Use It!

There are billions of dollars to be saved, millions of tons of carbon to be kept out of the atmosphere, and hundreds of thousands of households to be lifted out of energy poverty. And this can happen right now.

Siding firms are the logical partner here, they’re putting up scaffolding for their primary purpose, after all. Energy advisors can advise homeowners and siding companies on how much foam insulation, the appropriate materials and assemblies, and what the savings are for this value add.

Exterior Walls are a Solid, Permanent Investment

There are a lot of ways we could approach this. There’s already a mechanism in place, it’s called an incentive program that requires an EnerGuide for Houses Rating Label (which means a pre- and post blower door test and documentation of the recommended and carried out energy improvements, therefore sidestepping the gap for permits and code compliance).

Here’s a few:

• Municipalities using FCM Green Municipal funding to drive retrofits
• PACE or LIC programs outside FCM funding
• Most regional incentive programs
• Any new nationally-driven retrofit funding program for building envelope improvements
  

Building Code Changes Are Coming

In 2025, Part 10 of the building code (Alterations to Existing Buildings) will change the retrofit world. A crucial point to make now is this: how will Part 10 be applied to exterior retrofits?

The thing is, we don’t have to wait for a stick to be applied to improve thousands of houses a year, immediately.

We’ve got the number crunching skills and the building science to back it up.

We need the marketing and promotional chops to make a big change, now.

Also, very high on my personal wish list: a national energy strategy for lower income households that’s tied to provincial low-income programs for deferred maintenance so they can benefit from lower energy costs. Couple that with free heat pumps that are right sized and installed to provide comfort throughout the house.