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Can net-zero net the average homebuyer?

The kitchen of Landmark Group’s net-zero home.

An Edmonton house with solar panels selling for less than 10 per cent more than one without signals a possible shift

Dignitaries with pant legs covered in mud splatter huddle in an Edmonton basement as they inspect the water heater of a new home.

What has drawn the representatives of government and industry to this muddy suburban construction site, isn’t just the 1,230-square-foot, three-bedroom, detached house covered with solar panels that is able to produce as much heat and electricity as it uses. It’s the “normal’ price.

A net-zero house built by Landmark Group in Edmonton, which is able to produce as much heat and electricity as it uses.

Landmark, the home builder, is asking just $399,397 for its “net-zero” home, in a city where the average detached home in February sold for $427,726. Some say that’s a milestone, finally bringing what was until now a premium product sold at a considerable markup into the mainstream.

Landmark owner Reza Nasseri says he’s built net-zero homes before but that the electrical-generation technology is cheaper and simpler now, and doesn’t require the buyer to do anything – other than consider their potential cost savings in an otherwise standard, cookie cutter house.

“You know a lot of people, they don’t believe in climate change and who am I to say that they should or they shouldn’t,” he says. “But they believe in economics. So if they have a house and they pay a few dollars extra for it, and they get a payback within 10 years, and after, everything’s for free – they want to buy a house like that.”

Advances by Landmark and other builders to offer net-zero homes at a more regular price are vital, experts say, given the changes that could be coming to the Canadian housing market in just a few decades.

Landmark’s net-zero home is selling for under $400,000.

New stepped building codes could force all new housing to meet the net-zero standard by 2030, rather than the current situation, where the net-zero housing market is dominated by mass-market outliers and million-dollar custom homes.

The federal and British Columbia governments are responding to climate change concerns, and a target set by the American Association of Architects to hit net-zero as the base code by 2030, by contemplating adopting stepped codes to gradually meet the target.

Neither has made this a hard rule yet.

To incentivize the consumer and industry to find the crossover price where net-zero homes make enough sense for enough people, several federal agencies have partnered with larger builders to erect net-zero houses in otherwise normal, greenfield residential suburbs across Canada.

Thomas Green, a senior researcher with the Canadian Mortgage and Housing Corporation, helped manage just such a program, called EQuilibrium, which saw developers build 11 net-zero houses across Canada, starting in 2006, and CMHC monitor the energy performance.

For Green, the stepped codes are the last hurdle to push net-zero to the tipping point of mass market adoption rather than its current situation of builders leading the way in a few provinces. “I think that is going to start levelling out some of the regional differences,” Green says.

Builders in Ontario say public infrastructure remains a hurdle for net-zero housing.

But builders in Ontario see more barriers than the codes before the net-zero house falls over the tipping point in Canada.

Brent Strachan, senior vice-president of Ottawa’s Minto Communities, a residential builder that has erected several net-zero homes as part of federal programs, says Ontario’s price sensitive homebuyer wants net-zero, but with dollars stretched by exploding prices, at the moment wants upgrades such as hardwood floors or granite countertops more.

Indeed, he says Minto offers a $48,000 net-zero upgrade package on its standard, 2,500-square-foot houses that hasn’t exactly been popular. “Not a single person has taken it,” Strachan says.

But beyond the consumer, the major barrier Strachan sees is public infrastructure, rather than within the building industry. “If you have a community of 200 homes and each of them are going to generate energy, our current [electrical] grid isn’t designed to accommodate it,” he says.

Jennifer Weatherston, director of innovation with Guelph-based Reid’s Heritage Homes – which has recently built a community of 18 net-zero homes in Guelph (average asking price, is $1.1-million, she says) – agrees with Strachan about infrastructure limitations, but notes the crucial shift could be generational.

Millennials aren’t buying single-detached houses, yet, she says, but when they do, net-zero will be an expectation, not an upgrade. These buyers “tend to expect [net-zero] to be a feature within the home,” Weatherston says, based on the company’s experience selling town homes to millennial buyers. “They expect it to be standard.”

Weatherston says the market may be forced to respond even before the codes make them.

But for Michael Lio, a leader with the for-profit BuildAbility Corp., in Ontario, which works to create change in the housing industry, the key is electricity and energy prices.

Lio uses Ontario as an example of where net-zero can and can’t make sense to the average consumer. “In Ontario, for instance, given the high price of electricity, if you have a house that’s disconnected from natural gas lines and you’re currently heating with electricity or you choose not to use oil, then it makes a whole lot of sense to go that extra little bit and go to net-zero,” Lio says.

But, thanks to the cheap price of natural gas, “We are absolutely not at the tipping point of moving off it,” he adds.

Nasseri and Landmark are aiming to build about 30 more near-average priced net-zero homes in Edmonton in 2017, and officials say the ultimate goal is for all of them to be at least net-zero ready – meaning they can accept solar panels and other hardware without modification – sooner rather than later.

Is the market responding? “It’s really tough to say,” Mr. Nasseri says. “With this price, we’ll see. We have a lot of people kicking tires.”

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