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

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

Shawna HendersonNovember 20, 2023

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 insulation to the outside of the house and to replace windows at the same time as recladding. 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.

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 upcoming Tiered NBCC. 

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 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. 

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, 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. 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. 

Net Zero Renovation Shines A Light

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 main walls R16 to the exterior 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. 

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 insulation when you’re dealing with a straightforward cladding job.

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 an exterior insulation retrofit when tens or maybe hundreds of thousands of homes get new siding every year 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. 

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 improvement in the building performance due to increased insulation and reduced thermal bridging, NRCan’s database shows that there’s about a 15% improvement in air tightness associated with a 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, influence, or understand 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, it’s a significant dent in upgrading a large portion of the housing stock, quickly. Heck, if we can get 18,000/year with decent outboard insulation and exterior air barrier, that’s 10x the number in the NRCan database over a quarter of a century’s worth of energy modelling. 

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. 

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 the building code, or to have an energy assessment done. It’s considered a straight replacement.

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

  1. Each house must meet the minimum inboard/outboard insulation ratios for the climate zone to ensure there’s minimal potential for condensation inside the cavity.
  2. Each assembly must be evaluated for permeability - does the wall system dry to the exterior or to the interior? 
  3. Airtightness testing to show thermal bypasses and confirm mechanical ventilation requirements

Find out more about exterior insulation and retrofits in
the Whole House Energy Retrofit course.
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The Scaffolding is in Place for Exterior 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 insulation, the appropriate materials and assemblies, and what the savings are for this value add. 

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
  • The national Greener Homes Initiative (yes I know funding will run out by March 2024)
  • Any new nationally-driven retrofit funding program for building envelope improvements will require an ERS rating

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.

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