Rod Oram: Going green really cuts your energy bills

In his weekly column for Newsroom, Rod Oram looks at moves afoot in commercial property to get serious about energy efficiency - and gives a personal tale of saving money by converting his home and cars.

Two recent initiatives suggest the commercial property sector is getting serious at last about the energy efficiency of its buildings and the health and productivity of the people working in them.

This is welcome progress. But we still have a long way to go in New Zealand before all our commercial properties and homes are good places to work and live. The standards to which we build and renovate are below those of leading countries, the knowledge about how to build and run such properties is still patchy, and the benefits of doing so are not widely appreciated.

“We’re decades behind most of the OECD,” Andrew Eagles, chief executive of the New Zealand Green Building Council, said last week when it and a coalition of 20 leading commercial property organisations launched their commitment to push energy efficiency. They also called on the new government to do likewise with the buildings it owns or leases. They estimated the government could save $50m a year on its electricity bill while raising the productivity of its staff.

The commercial property sector uses about 20 percent of the country’s electricity. But this new focus on healthy buildings goes far beyond saving electricity. It embraces such factors as steady and comfortable temperatures, and the quality of the air, light, space, materials and design that contribute to the productivity of people working in them.

Evidence of the benefits is accumulating rapidly, such as in a study published last year by researchers at Harvard. They analysed workers in certified green buildings in five US cities and compared them with other workers in the same cities employed in different offices owned by the same companies. Those in certified buildings were more productive in terms of their ability to plan and execute work, and were healthier and slept better than their colleagues in non-certified buildings.

In the second initiative last week, the NZ Green Building Council launched a tool with which property owners and tenants can measure the energy efficiency, health and environmental performance of buildings. Called Green Star Performance, it is aimed at the existing 41,000 commercial buildings in the country, some 80 percent of which are more than 10 years old. It complements the Council’s existing Green Star rating system for new buildings and its NABERSNZ tool for energy efficiency of existing buildings.

Green Star Performance will help align the interests of building owners and tenants, and thus improve the quality of accommodation and the value of commercial properties, Connal Townsend, chief executive of the Property Council, said at the launch.

But that still leaves the massive problem of our housing stock. Our energy efficiency standards are still low by comparison with many countries. Moreover, the high cost of new builds and renovations has lessened the appetite of many developers and owners for investing in superior design, materials and equipment to lift houses’ performance and comfort.

The rental housing market is far worse. Landlords have little incentive to invest in saving energy because it is almost always the tenants who pay the electricity and gas bills. A push by the previous government saw some 350,000 homes, owned and rented, get better insulation. But many homes could be improved much further.

The Healthy Homes Guarantee Act passed by parliament last week will put more insulation and heating requirements on landlords for all new tenancies after July 1, 2019 and on all tenancies by July 1, 2024. But the exact requirements have yet to be drawn up. Grants of up to $2,000 per property will be available to eligible landlords.

The legislation had a tortuous history. It started out in 2013 as a private members’ bill by Labour’s Phil Twyford. When it failed its first reading, Labour Leader Andrew Little tabled an amended version which made it through the second reading with the votes of all parties except ACT and National. Once Labour took the government benches, parliament approved a modified version by 63 votes to 57, with National and ACT still opposed to it.

Meanwhile at home...

At this point in the column, I should declare my own great interest in the liveability of homes. Over the past decade, my family have invested heavily in our place, deriving great savings in energy and great gains in comfort.

When you read the details, you might consider us a little obsessive. But we hope it might give you an idea of what’s possible.

We’ve lived in the house since 1997, and greatly enjoy it and its location. It was one of the first houses in our neighbourhood built in the early 1940s. So rather than bowl it, we wanted to enhance its liveability while keeping its character.

Moreover, as a citizen on the journey to deep sustainability I wanted to be an early adopter of the new technologies that are radically changing the way we generate and use electricity in homes and transport; and as a business journalist, I wanted to see if we could do this in practical and financially prudent ways.

We took the first step in 2008. We were replumbing the house, making it a good time to install solar hot water heating. Our plumbers said the technology was more trouble than it was worth. But I insisted and found a company that equipped dairy sheds. If it was good enough for farmers, I reckoned it would work fine for us townies. It does. An investment of $7,500 cut our electricity use by 25 percent.

I knew the next, and biggest, step was to generate electricity with photovoltaic panels on the roof. I bided my time, though, until the cost was close to competitive with electricity from the grid. By 2013, I figured the moment had come – perfect timing, given a weather bomb had just blitzed our old roof, flooding the house.

Designing a new roof that was watertight, highly efficient thermally, compatible for PVs and sympathetic to the character of the house was a bit of a challenge to our architect, our energy efficiency expert, our builders and PV supplier. But we got there eventually.

We installed 5.2 kw of PVs, at a cost of $24,500. There were substantial building costs on top of that but we’ve allotted those to the necessary roof replacement and other renovations.

To make the most of the solar-power, we significantly cut our energy use. The main investments were in an LED lighting system in our main living areas ($8,700), double glazing retrofits in the existing aluminium joinery ($22,500), and a heat pump plus four slave units for warmth ($13,000).

The new heating is delivering the biggest energy saving. Our old system was a gas furnace ducting hot air around the house. In a typical July it would burn through gas equivalent of 2,000 kwh of power, at a cost then of $265. All up in a year, we’d use some 6,000 kwh equivalent of gas for heating and cooking at a cost of $795.

We’ve enjoyed four cozy winters since our PVs and heat pump went live in March 2014. Typically, we spend only $3 a day to heat the house in the depths of winter. All up the house is using less than half the energy it did before we began working on it in 2008.

We’ve also upgraded cars. In 2007, we had a pair of 10-year-old V6s. In 2007-8, we bought a Prius and a Jazz, which were then both three-years olds. In 2014, we converted the Prius to a plug-in by buying an electronics kit from California for $7,000. Here, I paid an additional $6,500 for 10kwh of batteries that fit under the floor of the boot, with a friend doing the conversion.

With the help of the extra batteries, my 13-year-old Prius runs around town at about 50km per litre of petrol. Once the batteries have discharged after some 70 km, the car reverts to its normal 20 km per litre hybrid mode.

All up so far this year including out-of-town trips when I don’t have a chance to recharge along the way, the car has averaged 35 km per litre. So far this year, I’ve driven 8,000 km, spending some $420 on 230 litres of petrol, plus some $50 on 500 kWh of electricity for a total of $470.

Two years ago, we traded in the Jazz for an electric 2012 Nissan Leaf. In 12,000 km so far this year, it’s used 1,600 kwh of electricity at a cost of $160.

Why only 10c per kwh? Well, most of the electricity for it and the Prius come from the PVs on the roof of our house. We’re often able to charge them during the day, rather than selling the electricity into the grid at 8c per kwh via our retailer, Ecotricity and its generation partner, Pioneer Energy. So, adding in some additional but pricier electric from the grid overnight, I get to a blended rate of 10c per kwh.

Thus, for 20,000 km between the two cars so far this year, we’ve spent $210 on electricity and $420 on petrol, for a total of $630. If we were still running a pair of V6s, say 2013 Hondas, we’d have spent $4,000 on petrol.

In the first 11 months of this year, we spent $2,229 running the house and two cars, emitting only some 500 kg of CO2, all from the Prius. If we’d made no improvements in the technology of either, we estimate we would have spent some $9,000, and emitted some 6 tonnes of CO2.

And, yes, there is the crucial question of the capital cost for all this. Last year, I asked Mercury Energy if one of its financial analysts could crunch the numbers for me. Geoff calculated the Leaf was a clear winner. Adding in the cost of converting the Prius pushed the pay back on the “electrification” of our vehicle “fleet” out to eight years. But I reckon that was a bargain because when I had the car converted three years ago even second-hand plug-in hybrids were well out of my budget.

As for the house, the paybacks on solar water heating, energy efficiency and PVs were all much longer. But the calculations don’t measure how much warmer, drier, draught-free, better-lit and all round more delightful our home is, or the fact the house is carbon zero – which are all attributes that mean a lot to us.

The very good news is such improvements to energy efficiency, liveability and environmental impact are getting easier and more cost-effective all the time.

But we need government and the private sector to fast-forward their own innovation so more people can join the revolution.

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