What You Need To Know About Energy Efficiency Ratings

What You Need To Know About Energy Efficiency Ratings

Energy efficiency is a highly desirable quality for residential properties. If your home has energy-efficient upgrades, you could sell it for a higher price. If you’re planning to buy a home, choosing one with efficient systems and appliances offers a number of benefits.

Efficiency ratings can indicate how energy efficient a property is, how much money is being saved on energy bills, and what future upgrades would be useful to improve the home’s performance. Anyone entering the real estate market should understand how energy efficiency ratings work and how they can influence the process of buying or selling a house.

Types of Rating Systems

Types of Rating Systems in Canada

Canada has several energy efficiency rating systems that assess residential properties. Each has slightly different criteria, but all measure how much energy a property uses and how it compares to other homes.

Here are five of the most common energy rating systems in Canada:

Home Energy Score

EnerGuide Rating System

EnerGuide is Canada’s official energy rating and labelling system for homes, administered by Natural Resources Canada (NRCan). It provides homeowners with an energy efficiency score based on a scale that ranges from zero to 100, with higher numbers indicating better efficiency.

EnerGuide ratings are determined by a registered energy advisor during an energy audit. The assessment includes insulation, air leakage, heating and cooling systems, and overall energy consumption. In addition to receiving a rating, homeowners also receive a report detailing recommendations for improvements and their potential cost savings.

Home Energy Rating System

ENERGY STAR® for New Homes

ENERGY STAR® is an internationally recognized certification program that applies to energy-efficient homes, appliances, and other products. In Canada, the ENERGY STAR® for New Homes program is overseen by NRCan.

Homes that receive ENERGY STAR® certification must be at least 20% more energy efficient than those built to standard building codes. The evaluation process considers features such as insulation, high-performance windows, air sealing, and energy-efficient heating and cooling systems. Installing ENERGY STAR® certified appliances can further improve a home’s efficiency.

ENERGY STAR Certified Homes

R-2000 Standard

The R-2000 Standard, developed by NRCan, is a voluntary certification for homes that exceed building code requirements in energy efficiency, indoor air quality, and environmental responsibility. Homes built to R-2000 standards are at least 50% more efficient than conventional new homes.

To achieve R-2000 certification, a home must meet stringent energy performance requirements, undergo an independent evaluation, and pass air-tightness testing. Homeowners who invest in R-2000-certified homes benefit from lower energy costs and improved indoor air quality.

LEED Canada for Homes

The Leadership in Energy and Environmental Design (LEED) certification, managed by the Canada Green Building Council (CaGBC), is a globally recognized standard for sustainable construction. LEED-certified homes are built with energy efficiency, water conservation, and environmentally friendly materials in mind.

The rating system evaluates various aspects of a home’s sustainability, including site selection, water efficiency, energy usage, materials, and indoor environmental quality. LEED homes are awarded certification at different levels: Certified, Silver, Gold, and Platinum, depending on the number of points achieved in the evaluation.

Leadership in Energy and Environmental Design Homes

Net Zero and Net Zero Ready Homes

The Canadian Home Builders’ Association (CHBA) introduced the Net Zero and Net Zero Ready Home Labelling Program to recognize homes that produce as much energy as they consume over the course of a year. Net Zero homes achieve this balance through a combination of energy efficiency and renewable energy systems, such as solar panels.

A Net Zero Ready home is designed and built to Net Zero standards but does not yet include renewable energy systems. Homeowners can add these systems later to achieve full Net Zero status.

Living Building Challenge Homes

How to Use Energy Ratings to Market Your Home

If you’re planning to sell your home, energy ratings can be a valuable marketing tool. Homes with good energy ratings often have higher resale value, so it’s important to communicate this information to potential buyers.

If your home has received an energy efficiency certification or rating, highlight it in your listing. For example, an EnerGuide rating demonstrates that your home consumes less energy, reducing utility costs for future homeowners. Providing past utility bills can further illustrate your home’s efficiency.

If your home has never been assessed but you believe it is energy efficient, consider scheduling an energy audit before listing it for sale. A positive rating can make your home more attractive to environmentally conscious buyers.

Energy audits also provide recommendations for upgrades that could improve your rating. If simple and cost-effective improvements can boost your home’s energy score, it may be worthwhile to complete them before listing your property.

How to Use Energy Ratings to Market Your Home

How to Use Energy Ratings to Inform Your Decisions as a Buyer

Energy-efficient homes are not only better for the environment but also better for your wallet. Lower utility bills can result in significant savings over time, and energy-efficient systems often have a longer lifespan because they don’t have to work as hard to meet a home’s needs.

In Canada, you may also qualify for financial incentives when purchasing an energy-efficient home or upgrading an existing one. Programs such as the Canada Greener Homes Grant (which is ending in 2024) and provincial rebate programs provide funding for energy-efficient renovations and home improvements. Homeowners can still access funding through NRCan’s Greener Homes Loan and various provincial incentives.

Buyers may also be eligible for an Energy-Efficient Mortgage (EEM), which allows for a larger loan amount based on projected energy savings. Some financial institutions offer specialized green mortgage products with incentives for energy-efficient home purchases.

Most energy rating programs provide a detailed energy report in addition to a numerical score. This report can help buyers identify potential improvements and prioritize upgrades after purchasing a home.

How to Use Energy Ratings to Inform Your Decisions as a Buyer

Key Takeaways

  • All major rating systems remain active and relevant in Canada for 2024-2025.
  • The Canada Greener Homes Grant is ending in 2024, but alternative rebate programs exist at the provincial and municipal levels.
  • Net Zero and Net Zero Ready homes remain an industry-leading standard for highly energy-efficient buildings.
  • ENERGY STAR® and R-2000 homes continue to offer high-efficiency options for buyers.
  • Energy-efficient mortgages (EEMs) are still available from select Canadian financial institutions, offering benefits like larger loan approvals or lower rates.

Energy efficiency rating systems help homeowners and buyers make informed decisions about property investments. Whether selling or buying, understanding these ratings can provide valuable insights into a home’s performance and potential cost savings. High ratings and certifications can increase a home’s appeal in the real estate market, making it a more competitive option for eco-conscious buyers. By leveraging energy efficiency ratings, homeowners and buyers alike can make smarter, more sustainable choices.

About the Author
Jen
Whether you’re renting a co-op or buying a mansion, my 26+ years of award-winning experience and my love for this city and it's neighbourhoods can help you make the right decisions.

I can help you to price property, find property, negotiate deals, qualify buyers, acquire financing, prepare your home for sale, market your home, find contractors, and more.