The Interview: Energy Retrofits Can Drive Economic Recovery, But Financing and Logistics Are Key, Torrie Says

Ralph Torrie is a senior associate with the Sustainability Solutions Group, partner in Torrie Smith Associates, and one of Canada’s leading energy and carbon modellers. He’s been focusing on mass, deep energy retrofits as a cornerstone of a green economic recovery, the financing, training, and logistical approaches that will get the job done, and a “very human response” that might be the catalyst for action.

The Energy Mix: We finally seem to be in a moment when everyone is paying attention to energy efficiency. How ever did that happen?

Torrie: It’s happening on a number of different levels. One is that, just in terms of short- and medium-term job creation, it’s pretty hard to beat. The investments are very well distributed, obviously—they’re going to occur wherever people live, so it isn’t like a megaproject, where the jobs all get concentrated in one spot. They’re also spread over a very wide range of skills, from architects and building science engineers, to skilled and semi-skilled tradespeople on the job sites, to managers and inspectors and auditors, the concierge-type jobs that will be necessary to shepherd this all along. So it’s perfectly matched to what will have to be done to get the economy running again after this terrible hiatus.

The Mix: Why hasn’t it happened yet?

Torrie: Part of the bottleneck when it comes to energy efficiency, part of the reason we haven’t done more building retrofits more quickly, has been the lack of effective business strategies and public policies directed at the financing and logistics end of the problem.

It makes no sense that we ask homeowners to be the contractor, come up with the capital cost, or even shoulder the credit burden of borrowing the money, for an energy retrofit. When we build energy supply infrastructure, whether it’s more oil and gas production or more power plants, we have finance and business models that do not require any participation by the consumer, even though they still pay for it over the long run. We need that kind of system for energy efficiency.

But the COVID recovery is going to be a period when the public investor, is going to be quite actively involved. That’s a game-changer: it means lower interest rates, and governments can also play a convening or leadership role in getting an industry moving that seems to have been stuck on one-by-one projects when this problem really needs an industrialized approach.

The Mix: Do you see the experience of the pandemic driving public appetite for a more ambitious approach to energy retrofits?

Torrie: If you’ve ever been really sick, one of the things you think about is how you’ll do things differently if you do recover. It’s a very human response. And I think something like that is happening right now at the society level that makes people more open to ideas for doing things differently when we get through this. 

So big ideas like, for example, getting all the fossil fuels out of our electricity system, or improving the efficiency of all the buildings in the country, or converting the entire vehicle fleet to efficient electric vehicles, don’t seem like quite so much of a stretch as they might have before. The pandemic has been a bit of a reset in the way we think about the future, what’s possible, and what’s desirable.

That points to another factor that makes efficiency and green energy options so appealing in the post-COVID recovery. People understand that we’ve got to have a more sustainable basis for the way we live. We’ve got ourselves into a corner where we’re vulnerable to all kinds of things, including pandemics, and some of the systems we’ve created for our own benefit are quite fragile and open to disruption. So the idea of introducing systems that are more resilient and forgiving, and less polluting and destructive, resonates with a desire to try and make the post-COVID economy cleaner, healthier, and more sustainable.

The Mix: Is this moment also being driven by the 62% of Canadians who voted last fall for parties that promised faster climate action and deeper carbon cuts?

Torrie: I don’t know about that. One possible response is, not to a great extent at all. This crisis has softened partisanship in the country, and we’re seeing a greater willingness to cooperate across party lines to rebuild the economy. Governments that were predisposed to address climate change will be doubly motivated now, and they’ve got a stronger basis to move forward. Governments of different political persuasions are declaring that the post-COVID recovery must be a green recovery, and it doesn’t seem to be something people are arguing about the way they used to.

This is all being fueled by the reality that the options we’ve been talking about for years now are really starting to prove themselves. Even Michael Moore can’t counter the reality that everyone knows wind power works. Everyone knows solar power works. People are aware of the benefits these new technologies can bring. That includes a business community that now understands this is one of the big growth sectors of the 21st century, and they’re totally into it. You may not like that if you don’t like big business, but it’s going to result in a lot more wind and solar being built faster than if it were all being done by community co-ops.

So there’s a convergence that was already happening before COVID on the view that a post-fossil fuel economy had to be the priority for this century. A pretty impressive room full of multi-billionaires had already figured it out, and were already influencing their colleagues. Combine that with the effectiveness of the divestment and corporate accountability movements, and things were really starting to change.  In the post-COVID recovery, the sectors that had momentum before the crisis will be restarting from strength, and the sectors that were already losing inertia will have a more difficult time coming back.

The Mix: What will it take to get at the full potential in what ‘deep retrofits’ mean and how mass retrofits happen?

Torrie: We’ve got to figure out how to do this on an industrial basis, so we’re going to need innovation in the very short term on the logistics, training, and financing, because there isn’t a well-established formula for doing it. Without losing any more time than necessary, we’ll probably have to try a few things and see what works, and we may find that different combinations of strategies work in different places.

But some of the must-haves are: The homeowner needs to be relieved of the risk and the up-front cost and logistics of the project. The retrofits must be deep enough to get an overall improvement of 50% in the thermal efficiency of buildings. The conversion to electric heat pumps is an absolute must-have—because if all we do is make the houses more efficient and keep heating them with fossil fuels, we won’t get the climate benefits we need.

So we’re not just talking about retrofits. We’re talking about do-overs that involve electrification, switching to heat pumps, getting the air-to-air heat exchangers and air quality management right, in addition to whatever energy efficiency work needs to be done on the building shells. Modular wall and exterior insulated fabricating systems will pay a strong role. Plus the climate-proofing.

It’s like we’re getting a house ready for the next 100 years. It’s not just an efficiency clean-up. It’s a habitat reset.

And the retrofits have to be quick. When people think of a major renovation, they get this image in their heads that contractors will be traipsing through their home for weeks. That’s not acceptable. We should set an aspirational goal for the actual intervention in the household of being in and out in two days. So whatever innovative strategies it takes to get it done and financed, they have to be quick, they have to be deep, they have to include electrification, and they have to be industrialized, so that we’re doing hundreds of houses in a single project.

We’ve been talking about single-family homes, but we need to do this in condominium and apartment buildings, too. In fact, on a per capita basis, their size and shape makes them easier and relatively less expensive to retrofit.

Follow-up: @ralphtorrie, https://www.linkedin.com/in/ralphtorrie/