{"id":229,"date":"2012-02-09T07:28:33","date_gmt":"2012-02-09T12:28:33","guid":{"rendered":"http:\/\/www.napoleon.cc\/tips\/?p=229"},"modified":"2021-02-01T12:25:14","modified_gmt":"2021-02-01T12:25:14","slug":"energy-audits-a-waste-of-energy","status":"publish","type":"post","link":"https:\/\/napoleon.cc\/tips\/energy-audits-a-waste-of-energy\/","title":{"rendered":"Energy audits a waste of energy"},"content":{"rendered":"\n

\t\t\t\tEnergy audits a waste of energy.  Forcing energy audits on sellers is both inefficient and problematic <\/span><\/p>\n\n\n\n

 <\/span> By Vince Brescia <\/span><\/p>\n\n\n\n

To many people, the Ontario government\u2019s recent announcement that all homes must have an energy audit before being sold must sound like a good idea. In fact, the legislation states that an energy audit is required prior to all real property transactions, including leases. So much the better, some may say.<\/span><\/p>\n\n\n\n

The legislation does not actually specify that an independent audit is required. That intention was announced by the government, and would have to be spelled out in regulations. The legislation actually specifies that sellers must provide \u201cinformation, reports or ratings\u201d on \u201cenergy consumption and efficiency.\u201d The government says the audits should cost about $300. However, a province-wide audit infrastructure does not yet exist so the market price for audits once they are in demand is yet to be determined.<\/span><\/p>\n\n\n\n

There are certainly positive aspects to mandatory audits. Everyone who buys a home will get some information on the energy efficiency of the home (property) they are buying. It will increase consumers\u2019 awareness about this aspect of real estate. And it will incent some potential sellers to take steps to improve the energy efficiency of their properties.<\/span><\/p>\n\n\n\n

However, forcing energy audits on sellers is both inefficient and problematic. <\/span><\/p>\n\n\n\n

Firstly, not all purchasers will want or make us of this service, regardless of whether or not some think they should have it. The intent of the legislation is to provide value to purchasers. However, energy efficiency may not be a priority for the purchaser, because they are interested in the property for other reasons. Therefore, the expense will be wasted in many circumstances, making it inefficient.<\/span><\/p>\n\n\n\n

A second problem is that the scheme will create a considerable amount of energy consumption. There are about 460,000 real estate transactions in Ontario every year. Most audits will require a return truck or van trip by auditors to each property, consuming energy. The infrastructure of a bourgeoning home audit industry will also generate significant energy consumption.<\/span><\/p>\n\n\n\n

A third problem is that many homes (properties) do not really need an audit. If they are relatively new homes, they will have had to meet building code standards for energy efficiency, making the information provided of little use to the buyer. Another example is condominiums, where neither buyer nor seller has much control over the energy efficiency of the condominium unit. In condominiums, the main parts of the infrastructure that determine energy efficiency are controlled by the condominium corporation, not the unit owner.<\/span><\/p>\n\n\n\n

Another problem is that information from a standardized system like this often does not provide customers with the information they are interested in, or in a format that meets their needs. <\/span><\/p>\n\n\n\n

Adding to the last problem, the audit will be paid for by the seller, not the buyer, making the seller the client. This introduces moral hazard into the system, where sellers look for auditors who provide favourable audits, and find auditors willing to comply. The legislation does not indicate whether or not there will be standards for, or policing of energy auditors.<\/span><\/p>\n\n\n\n

A final key problem is that the new cost associated with the energy audits must come at the expense of something else. In the language of economists this is the \u201copportunity cost.\u201d The money spent on the audit may come out of capital expenditures on energy efficiency, which already have a high priority with Ontarians. Or it may come out of other important priorities, such as improving the building\u2019s health and safety. The point is that it is not a free new benefit. It comes at the expense of something else. Given that it does so inefficiently, it is not a great idea. <\/span><\/p>\n\n\n\n

In this age of growing consumer awareness and interest in energy conservation, a mandatory audit approach is not necessary. The most efficient option is to let those who value energy audits to pay to have them done. The consumer is the best one to judge when such audits will have value, what specific information they need, and in what format. <\/span><\/p>\n\n\n\n

Given that so many purchasers these days already have independent inspections done before buying, it is clear that consumers are not shy about paying to get the information they value prior to making an important purchasing decision. In fact, purchasers can easily ask their home inspector to opine on energy efficiency, without necessitating a second inspection. <\/span><\/p>\n\n\n\n

Financial Post<\/span>
\nVince Brescia is president & CEO of the Federation of Rental-housing Providers of Ontario<\/span> .\t\t<\/p>\n","protected":false},"excerpt":{"rendered":"

\t\t\t\tNR Can energy audit is another failed government program which only has had limited success due to rebates for audit required to obtain rebates for windows and furnaces etc. Will this become another program like the “emissions testing”, only kept in place because of cost of dismantling program. NR Can has licensed Providers whose only purpose is to “franchise out” or “sub-contract” their business, so if fact they have set up a whole new sub-industry that has nothing to do with engergy but in fact has become a money grab for people “in the know” and “lucky” enough to get a license. License to print money that is.\t\t<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-229","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nEnergy audits a waste of energy<\/title>\n<meta name=\"description\" content=\"Energy audits a waste of energy. To many people, the Ontario government\u2019s recent announcement that all homes must have an energy audit before being sold must sound like a good idea. 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