6min chapter

Inevitable cover image

Vancouver's Journey to 100% Renewable Energy

Inevitable

CHAPTER

Carrots and Incentives: Shaping Renewable Energy Policy

This chapter explores the role of incentives in driving renewable energy policy in Vancouver, such as the floor area bonus for heat pumps and electrification. It highlights the benefits of these incentives and the importance of transitioning from short-term rebates to long-term policy solutions.

00:00
Speaker 2
We've talked really about the sticks that have been put in place. So mandated things that people have to do via policy. What about the carrots that you're playing with now? And I wonder what role carrots play in helping shape things policy down the road, either at the municipal or provincial or national level.
Speaker 1
Carrots are incredibly important. One really effective carrot that we have in place today is we have an 18% floor area bonus. So a little bit more space in a, whether it's a new house or a new townhouse or small multiplex building. There's an 18% floor area bonus
Speaker 2
that's in place, meaning that if you're building a new lesson three story, dwelling unit, and you install heat pumps, then you have the capacitive build 18% more.
Speaker 1
Yeah, you have to build one of two standards, both of which require electrification for heating and hot water. One's called passive house and one is called CHBA net zero. And with CHBA net zero, we also require that there be no fossil fuel on site. So no gas piped into the home or building. And that floor area bonus really has provided clear direction in terms of like how effective carrots are really, really clear direction. For industry in moving forward and investing in learning to build better homes, being able to present to their clients saying, Hey, if you guys are interested, I talked to a duplex for instance yesterday, the architect from a duplex and they're building duplex for two families. And the 18% floor area bonus means they're able to get an extra bedroom for each side of the duplex. So when you talk about sort of tangible carrots and benefits, I mean, that's huge for a family going like, Oh, yeah, it'd be nice to have an extra bedroom, whether that turns into a den or whether that turns to a bedroom for a child that later if it's needed. That's a really tangible outcome. The duplex was going to be a two bedroom and now it's going to be a three bedroom. Each side, that makes a really big difference. So I'd say that's one of our really effective policies is the floor area bonus that we've had in place, the 18% floor area bonus that we've had in place. Now for a number of years, and we've recently sort of streamlined that offering. That's one example. We also have for larger buildings for five dwellings or more, five percent floor area bonus. It gets smaller as the buildings get bigger, the overall amount of the bonus, but it's also been quite effective in encouraging developers because most developers are profit motivated. And so why would they take on extra cost of building a better building if there's not some kind of reward in being able to say, Oh, wow, I can sell five percent more units. I just have to add some insulation, which is also sellable. They can sort of sell that benefit. But having that extra floor area, having those extra units, those have been really tangible examples of durable policies, policies that we can maintain over the long term because floor area in a city, it's sort of like printing money, you know, in the sense that you don't run out floor area per se, not in a practical sense. Anyway, whereas shorter term incentives, which we also have, like we have rebates for homeowners that want to install a heat pump in their home. We maintained a $6,000 rebate for a number of years. We've now ended that rebate because the market is well on its way. There are many heat pump installers, but it was important. Those rebates were important in helping both citizens take the leap, but also contractors take the leap and go, Okay, like let's invest in this. Let's get this training and let's start installing heat pumps because there is market demand. Because if you looked at heat pumps five years ago, there was very little market demand in Vancouver, whereas now it's very desirable. And it's definitely something many people have considered many homeowners have considered and either have a plan to install a heat pump or have a plan in some way to sort of add the cooling.
Speaker 2
Yeah, the order of operations here seem really important. You have their short term carrots like rebates that really get the market going, get manufacturers and customers aligned and then introducing and turning that into policy and then now using that policy tailwind to build more long term carrots in terms of durable floor space that would last, you know, how our long buildings will last. That's incredible. And I think underlying all of that is economic incentives amongst manufacturers, amongst developers, amongst people are aligned. And that's huge.
Speaker 1
Yeah, agreed. And having a number of different tiers of carrots or incentives that, yeah, create that alignment for manufacturers. Vancouver is not perfect, but I will say the floor space incentive has been as kind of as close as it gets to perfect in that it's not technology specific. It does point to a clear direction, clear decarbonization and creates a really clear value proposition. Again, that's durable over time. So unless council decides to change offering the incentive for political reasons, there's no reason we need to stop it for cost reasons or work world reasons. Yeah, and that's
Speaker 2
not a lot of size changing, right? It's the same lot size. It's just you can build a bigger home on top of the piece of
Speaker 1
land. You can just build a bigger home. Yeah, exactly. And so whether that's single family home or duplex or triplex or foreplex or a townhouse project or a small apartment building, or for the 5% and above, larger buildings, I wouldn't be able to count on my hands, the number of six story apartment buildings, for instance, that are taking advantage of the 5% floor area bonus and pursuing passivos. There's a tremendous number. And under, as you know, under passivos or under CHP net zero, those are homes that are heated by heat pump, cooled by heat pump. The water is either electrically heated or heated by heat pump. They're often buildings that are fully electric. I mean, most cases, occasionally you'll have gas for cooking, but mostly they're fully
Speaker 2
electric buildings.

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