In-Depth
The Road to 2030 – Trade contractors are encouraged get ahead of the curve

May 26, 2022 – Across Canada, buildings of all sizes account for 12% of the greenhouse gas (GHG) emissions released into the atmosphere; the fuel we burn to heat our homes and office towers make them prolific polluters, behind only the oil & gas (26%) and transportation (25%) sectors. And that’s why programs are being drafted to encourage change.

This past March, the federal government released its 2030 Emissions Reduction Plan—a 271-page document that includes $9.1 billion in new investments to ensure Canada reaches an emissions reduction target of 40% to 45% below our 2005 levels by 2030. This target is designed to put the country on a path toward achieving net zero emissions by 2050—a commitment made by countries around the world as part of the Paris Agreement.

Among the spending announced in the 2030 Plan is $150 million for the Canada Green Buildings Strategy, which is a nation-wide game plan to develop new policy incentives and standards that will drive new building construction and the retrofit of existing building stock toward zero carbon standards.

Modern Niagara is a national mechanical and electrical commercial contracting company. According to Kevin Spencer, the company’s vice-president, Energy Solutions, the demand for decarbonization among new building projects has already started.

“Especially for government projects, there is certainly a focus on GHG targets that must be met by the team that is designing and building the facility, and it has to operate that way as well,” said Spencer during a live, online panel discussion hosted by Electrical Business and HPAC magazines on April 25.

“The Road to 2030: Trades Contractors and the Federal 2030 Emissions Reduction Plan” featured three other industry experts, all addressing what mechanical and electrical contractors need to know so they can get ahead of the changes that are coming to the building industry.

When it comes to the retrofit of commercial buildings, Spencer sees two different approaches among existing building owners. There are companies that have articulated their own climate-reduction goals and have started down the emissions-reduction path, and then there are those owners who are in a wait-and-see mode.

“We have an energy solutions group with a number of energy engineers and HVAC technicians that are looking for better ways to improve not just the energy efficiency of buildings, but now we’re also switching over to help our clients decarbonize and electrify,” says Spencer.

And while he’s seeing progressive companies that are in the planning stages, he foresees the actual transition to lower-emissions technology will begin happening between now and 2030.

For residential contractors, the most significant push toward decarbonizing homes is the transition from natural gas and toward electric heat pump technology for heating and cooling—a solution that’s being heavily promoted in jurisdictions across Canada.

Jeremy Sager, a senior HVAC and renewables research engineer with CanmetENERGY (Natural Resources Canada), addressed some obstacles of which contractors need to be aware to get themselves and homeowners on board with electrification.

“We need to get past the assumption that heat pumps don’t work in cold climates,” says Sager. “We’ve done testing on this technology in our lab… and we’ve seen that the systems do perform well, even in cold temperatures. Some systems performed down to -30 Celsius.”

A range of heat pump technologies exist today, and Sager explains that there are options for those who want to fully electrify their homes or those looking to begin with a dual-fuel (a.k.a. hybrid system) by adding a heat pump to an existing gas furnace, or even those with electric baseboards who could incorporate heat pumps to displace some of their load with more-efficient solutions.

Contractors not taking the time to properly size and select the right system is a challenge, Sager says. “I think calculating proper design—including a heat loss and heat gain calculation—is something that needs to be done to make sure we’re getting [the right-sized] system. We don’t want to oversize, and we don’t want to undersize.”

While he sees heat gain/loss calculations being more common for new builds, they’re not always performed for retrofit projects… and that’s a problem.

Industry acceptance

Martin Luymes, vice-president, Government & Stakeholder Relations with the Heating, Refrigeration & Air-Conditioning Institute of Canada (HRAI), is seeing a range of attitudes among members when it comes to transitioning heating and cooling away from fossil fuels. “Among the contractors, it’s a very small percentage of people who are very eager to get into this but, on the other hand, we have people who remain skeptical.”

Over the years, industry veterans have lived through different governments committing to a variety of low-carbon programs and policies, only to see them subsequently withdrawn.

“That creates a bit of an uncertainty around where we’re going,” says Luymes, adding that for contractors to invest in the future of their businesses—product mix, employee training, etc.—they will need “clear signals from government”. That said, Luymes believes his membership is increasingly “getting the sense that this is an inevitability, and they need to start preparing”.

Some concerns about decarbonization and a mass migration to all-electric solutions for heating buildings revolve around the additional load that will be placed on our existing, aging electrical grid.

Canada’s electricity grid is among the cleanest in the world, with over 80% of our electricity produced by non-emitting sources (hydropower, nuclear, wind, solar), and the government’s 2030 Plan includes transitioning the remaining 20% (coal, oil, gas). Although other “clean” alternatives for heating are being explored, such as hydrogen and biomass, electricity remains the leading solution.

“When it comes to clean energy, or reducing carbon emissions, electricity has—and will play—an important role in achieving those goals,” says Gurvinder Chopra, vice-president, Standards & Regulations, Electro-Federation Canada. “Our research and development teams are spearheading their product designs in that direction.”

Electrical grids and electrical products are all undergoing transformation as technology and innovation disrupt the traditional models, notes Chopra, who points to three key trends leading the disruption: the electrification of the transportation sector; decentralization or distributed energy resources (DERs), where local energy generation and storage deliver demand flexibility and energy efficiency; and the digitalization of the grid, including smart metering and sensors, and more transformations behind the meter.

With respect to concerns about grid capacity, Chopra says many studies have shown that the current power system is capable of absorbing additional loads—at least in the short term—but not if there is a sudden, massive upsurge.

“There is certainly a need for investments and operational adjustments, which would help in meeting the new consumption patterns,” Chopra says. “This may require, for example, high-capacity distribution transformers, smart charging systems, maybe better energy management systems [and] replacing aging, inefficient electrical infrastructure and, of course, using energy-efficient products.”

Retrofit opportunity

The transition of buildings away from fossil fuels to electricity for heating and cooling does provide a “massive opportunity” for contractors, suggests Spencer. And although he admits the government messaging with respect to incentives doesn’t seem to be uniform across the across the country right now, he is confident that the traditional course of action for life cycle replacement—swapping out fuel-burning equipment for the same thing—is going to be disrupted.

Sager sees a huge opportunity on the residential side with air-conditioner replacements.

“Let’s look for ways to swap out [the AC unit] for an equivalent-capacity heat pump, if that’s what the homeowner is looking for,” he says. “Our research has shown that, if you go this route, you can still generate 25% to 30% GHG reductions when you swap an air-conditioner with a like-for-like heat pump.”

“I think the more we can get heat pumps into people’s houses, the more costs are going to come down, and the more heat pumps are going to become a commoditized item—like a furnace—for the average homeowner,” Sager says.

Contractors can also offer solutions to homeowners that optimize their heating systems, making them lower-cost and/or emit fewer GHGs. In jurisdictions with time-of-use pricing, like Ontario, Sager suggests incorporating switching controls with hybrid (dual-fuel) heating systems (i.e. electric heat pump in tandem with a gas-fuelled furnace). The controls automatically ensure the homeowner is operating the least-cost heating system at all times.

“I would encourage contractors and distributors to ask for these kinds of capabilities from their equipment suppliers,” says Sager, who also suggested making homeowners more aware of ground-source heat pump systems, as well as air-source heat pump options.

Taking charge

As different levels of government continue to develop new plans and directives to drive Canadians toward emissions-free ways to heat and cool their homes and businesses, both Luymes and Chopra agree that industry needs to be at the table helping to set the agenda.

“One of the things we need to do as a sector—across the board—is to send a signal to utilities and governments at the provincial, federal and even municipal level that we have solutions; we have ideas about leading the way in the drive to low-carbon technologies,” says Luymes.

For example, HRAI conducted research which shows that, rather than relying 100% on air-source heat pumps, an increased adoption of ground-source heat pumps could provide great benefits to managing the grid because they don’t peak anywhere close to the same level on the coldest days of the year.

Luymes points to this research being helpful to the electrification policy discussion. “It doesn’t really say one technology is better than the other—it’s more about showing there are considerations that need to be thought through when we’re talking about electrification.”

According to Chopra, almost every member of Electro-Federation Canada is aligning with climate change objectives. “They have to be… there’s no other option. They’re all helping customers and suppliers to implement sustainable practices across the value chain and throughout the life cycle of their products and solutions.”

Chopra mentioned that one of EFC’s manufacturer members was involved with two apartment buildings in Switzerland that featured no-cost electricity or heating for the tenants because of the installed carbon-neutral energy production: solar photovoltaic modules were installed on the front and on the roofs, supported by two wind turbines.

“The production covers energy demand for heating and cooling, and the production of hot water for all residents. The system also manages switching from one source to another at optimal times, switching power on and off to manage efficiencies and costs. So all this is happening as we speak and, as Martin mentioned, we need to have proper policies in place which would help these going forward.”

Selling the life cycle

The panelists all agreed that where the greatest gap exists in the industry today is in the number of properly trained technicians, plus the lack of long-term thinking when it comes to selling HVAC systems.

“When you’re dealing with a building owner, and whether it’s HVAC equipment or whatever it may be, the focus is typically always on installed price,” says Spencer. “And yet there’s so much more that goes into it… there’s the energy consumption and the air-tightness of the building. And it doesn’t really matter if it’s a residential building or a commercial building. We really are lacking the skilled expertise to look at a building—and the systems in that building—and come up with solutions for that client where we can say, ‘Here’s what the financial cost over the life cycle of that equipment will look like for you. Today, if you put in a heat pump—whether it’s ground-source or air-source—it will absolutely under its life cycle be more cost-effective than fossil fuel-based natural gas”.

“The selling is short-sighted; selling for today where the cost of replacing a gas appliance for the same is familiar, but carbon pricing is escalating. So when you look out even eight years, pricing will change. So now is the time to be presenting other options with longer-term benefits for clients.”

The concept of selling against the rising carbon price is seen as a shortcoming for the industry. “If you’re not thinking about that, and presenting the alternatives to your customers, you’re really doing a disservice,” suggests Luymes.

HRAI has been working on a plan of training programs for a low-carbon future. It includes re-training programs for existing HVAC technicians, as well as developing a new pathway to attract technicians for the residential heat pump trade.

But by far the biggest need, says Luymes, is to get people to understand how to sell the solutions. “There’s all kinds of new technologies and people have to technically understand how to install and service them, but also, how do you sell them? Particularly when the price point is a bit higher than what people are used to?”

Sager and Luymes also see opportunity in the market for existing contractors to join forces to provide a broader suite of services to address energy retrofit solutions for businesses and homeowners. HVAC contractors can take the lead on the mechanical room, while electricians manage solar solutions and smart controls, while another contractor takes care of the windows, insulation, weatherstripping, etc. Very few companies are in a position to offer that whole suite of services. This could lead to a whole new business model.

“And I would suggest that contractors who think about leading with their own expertise and broaden into some of those other services will be doing themselves a favour,” says Luymes. “They’ll also be doing their customers a favour and will be positioning themselves for long-term success.”

Did you miss the discussion? Watch the recording here:

Doug Picklyk is the editor of HPAC Magazine, a member of Annex Business Media.

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