Energy Efficiency to Improve Affordability

We are exploring solutions for reducing the energy affordability burden where it is highest in Canada. 

Solution: Energy Efficiency 

A key solution to energy affordability lies in energy efficiency. We did not highlight this as our first solution because it is more challenging to quantify and involves greater policy complexity. For now, we are focusing on the basics of energy efficiency—better insulation, better windows, and efficient heating and appliances. In future posts, we will discuss more complex solutions, like virtual power plants. 

While reducing energy consumption sounds straightforward, many households either can’t afford the upfront cost of energy efficiency upgrades or, if they rent, they can’t make changes to their premises. To address this, policy changes must ensure that energy efficiency becomes a requirement for all new builds and that retrofits are supported. However, currently, there is a policy trend to favour lower construction costs over more stringent efficiency building codes. Over the longer term, that approach could exacerbate the housing affordability problem rather than fix it. 

We can learn from other jurisdictions on the policy front and quantify what is possible in energy efficiency gains. In this context, we have chosen to compare Canada to Sweden due to their similar climates. According to IEA data, an average Swedish household consumed about 17,000 kWh of energy in 2021 for both electricity and heating. In comparison, the average Canadian household used approximately 26,000 kWh in 2021 – 38% more. 

Sweden has long been at the forefront of establishing ambitious energy efficiency standards, investing in retrofits, and developing energy-efficient technology. The country's stringent building regulations ensure that new construction is highly energy-efficient. Sweden's commitment to sustainability is evident in its widespread adoption of nearly zero-energy buildings (NZEBs) and comprehensive energy performance certificates for homes. 

There is also a strong culture of conservation in Sweden, where homeowners typically demonstrate environmental awareness and a commitment to sustainability. This cultural emphasis on energy conservation drives demand for efficient homes and supports policy initiatives. 

While significant progress is being made in Canada, the landscape is more varied. Energy efficiency standards and regulations can differ widely across provinces and territories. Initiatives like the new Greener Homes Affordability policy aim to unify efforts and set more aggressive targets for reducing greenhouse gas emissions and enhancing energy efficiency. 

Canada has some promising initiatives and an increasing focus on innovation and education, but we still have a long way to go. We can learn from Sweden’s approach of implementing comprehensive policies, substantial investments in retrofitting, and its strong cultural emphasis on sustainability.