Return on investment of high performance building, what to expect.

How much extra can I afford monthly in better house construction without increasing my monthly housing expenses?

When considering building an energy efficient house we often face the harsh reality of cost disparities from building to Code or to a Passive House standard. Costs from one methodology to the other may increase significantly in many different stages of the project and the average increase is of 26% as mentioned on our previous post “From code to passive house building, learn more about performance standards.”

However, we should take a deeper look into how we could evaluate and afford such an increase in investment to go from a standard building to a very efficient one, such as the Passive House.

For instance, if a detached home of 300 m2 is built up to code, and has no air-conditioning or pool/spa, it will consume an average of 22,000KWh/year, estimated on Hydro Quebec website*. If a 300 m2 house is built to Passive House standard, it will consume 4,500KWh/year. 

Based on the Hydro Quebec consumption cost, the Passive House building would have a daily consumption of 12.32 KW/day, and would therefore be within the 1st tier, $0.06159 per KW, and a daily total of $0.759. The code building would have an average daily consumption of 60.27 KWh/day, and would therefore be in both tiers, resulting in a total of $4.389 per day.

As seen on the table below, the total average energy consumption of a detached home built to code is $1601.98 and a Passive House would be $277.15, almost ⅙  of the consumption of a house built to code.

The difference in the total annual consumption from a code building to a Passive House Building is of at least $1324.83.

Now, let's consider that you are using a mortgage to pay for the new house, how much extra could you afford, considering the future savings in energy? We can use the Present Value of Future Cash Flow ** formula to calculate the total:

In other words, you could take an extra $23,000 added to your initial mortgage, without going over your monthly budget for house expenses, since the extra amount to be paid in mortgage will come from the savings in energy bill. 

However, when we compare the cost to build a house from code to a Passive House standard, we notice a difference of about  $86000 compared to the $23000 savings in energy, and this is mainly due to the low price of electricity in Quebec. Another important aspect to consider is that Passive House components tend to last much longer and therefore, the costs with repairs and maintenance will also be much lower in the future if compared to a built to Code house.

High performance building are not all about savings

Building an energy efficient house is not only about financial savings, even though they tend to break even in the long run. An energy efficient house will consume less electricity, produced by natural resources. The selection of its components can be very environmentally friendly by selecting local suppliers or by simply choosing less pollutant, but still very energy efficient components. Besides all the global warming aspects that should drive someone to choose an energy efficient house over a built to code one, there is also the high level of comfort of these houses. They are better built and better insulated offering high comfort during all seasons. 

For all these reasons, is it really worth it investing in a Passive House construction then? Yes.

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