Energy Efficient Retrofit Archives : VCIB

Better Buildings: A Guide to Financing Housing Retrofits for Ontario Non-Profits

Posted on June 20, 2024April 16, 2025 by Priya Prasad

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This piece was originally produced for the Ontario Non-Profit Housing Association in January 2024

Affordable housing and climate change are top concerns for Canadians and, while they are often considered separate issues, the two are deeply intertwined. Retrofitted buildings, which incorporate energy-efficient upgrades into the existing building supply, can address both problems at once by offering significant opportunities to cut energy consumption, lower greenhouse gas emissions, and improve affordable housing conditions for Canadians.

Decarbonizing Ontario’s built environment is crucial for reaching Canada’s commitment of net-zero emissions by 2050, as our buildings contribute 24% of our national emissions — a marked increase of 42% since 19901. This situation is even more critical in urban areas like Toronto where buildings emit 58% of the city’s total emissions2.

VCIB specializes in financing climate sustainability and housing affordability. Our community-first finance model aims to contribute to the decarbonization of Canada’s building sector, while making substantial progress towards our net-zero by 2040 goal.

In 2022, we partnered with the City of Ottawa to support financing for the Better Homes Ottawa Loan Program, which allows residents to borrow funds for home energy improvement projects. The initiative is estimated to reduce individual household greenhouse gas emissions by 30% per year.

Understanding Retrofitting: A Sustainable Solution

Retrofit projects involve making rehabilitations, modifications, or upgrades to an existing building to improve its energy efficiency and reduce its ecological footprint.

Retrofits cover a wide spectrum, ranging from minor modifications such as upgrading lighting and appliances to major changes like replacing window glazing and doors. Then there are deep retrofits that involve an extensive overhaul of the entire building, which may include replacing the roof or swapping out older heating, cooling, and ventilation systems with renewable technology.

In the non-profit housing sector, common building retrofits include structural enhancements, energy efficiency improvements, accessibility upgrades, plumbing and electrical system enhancements, flood protection, earthquake resilience measures, and wildfire protection. As technology evolves, innovative solutions like geoexchange and micro-grids make retrofits the best path forward to reducing building emissions and advancing climate justice.

Energy Efficiency in Affordable Housing: A Wise Investment

Not only can retrofits reduce carbon emissions and protect a building from extreme weather, but upgrades can generate energy savings over time. Natural Resources Canada notes that deep retrofits can save up to 60% in energy costs, allowing for upfront costs to be recovered thanks to lower utility bills. Even more, retrofits can greatly enhance the comfort and desirability of homes for tenants and, ultimately, increase property values.

Overcoming Barriers to Retrofit Projects for Non-Profits

The burgeoning retrofit industry presents unprecedented opportunities for long-term sustainable housing.

“It’s vital that housing providers are able to make upgrades that allow them to continue to offer safe, comfortable and sustainable homes,” says Chloe Wong, a VCIB Commercial Real Estate Account Manager. “However, it can be a struggle for non-profit housing organizations to secure loans from traditional banks and lenders.”

Navigating this complex landscape requires committed partners like VCIB. Our experienced team at VCIB can help housing owners and operators understand what they need to do to prepare for a successful lending application and assist them in leveraging government grants and incentives whenever possible.

“We understand the sector’s retrofit needs and financing challenges,” adds Chloe. “We’re committed to putting in the extra effort to ensure non-profit housing providers get the retrofit financing they need.”

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Learn more about VCIB’s social purpose real estate financing in our website. If interested in chatting with VCIB about your financing needs, get in touch.

Climate-ready homes, empowered owners: SwitchPACE CIC’s winning combo 

Posted on February 27, 2024April 16, 2025 by Cecilia Bermeo

Corey Cadeau double thumbs up with double heat pumps outdoors scaled

The residential sector is a significant source of greenhouse gas emissions, making improving the energy efficiency of Canada’s housing stock crucial for climate change mitigation. However, improving energy efficiency often requires homeowners to invest in expensive retrofit projects, which not everyone can afford.

For SwitchPACE CIC. – a Community Interest Corporation based in Halifax, Nova Scotia – the answer lies in an innovative solution: Property Assessed Clean Energy (PACE) financing.

Often offered by municipalities or non-profit organizations, PACE loans provide flexible, low-cost financing for homeowners to carry out energy efficiency upgrades on their properties with no upfront costs.

“Home energy retrofits go a long way in mitigating the negative effects of climate change, like health concerns stemming from extreme heat,” says Alfred Lee, Climate Finance Manager at Vancity Community Investment Bank (VCIB). “But PACE programs haven’t been implemented at a large scale in Canada yet.”

With a mandate to scale up carbon reductions, SwitchPACE CIC. is turning the tide by becoming a leader in PACE program development and execution.

“The municipal PACE efficiency programming we run really empowers residents in the fight against climate change,” says Julian Boyle, President at SwitchPACE CIC. “Climate is such a large, complex global issue, but bringing it down to the local level to help homeowners save energy and save the planet is really exciting.”

Breaking the entry barrier with values-aligned financing

Earlier this year, Switch Pace CIC. launched a new program with financing support from VCIB – the Switch Program – Switch West Hants.

Through this program, homeowners within Nova Scotia’s West Hants municipality can finance almost any project that saves energy, increases comfort, and reduces greenhouse gas emissions – including geothermal heat pumps, air heat pumps, solar panels, window upgrades, insulation, and air sealing, amongst others.

Solar system installment on a Nova Scotia property. Photo courtesy of SwitchPACE CIC.

“Financing highly collaborative approaches like SwitchPACE CIC’s programs are core to VCIB’s mission,” says Alfred. “Through these programs, SwitchPACE CIC. is making home energy upgrades accessible by covering the upfront cost of the contractors and offering homeowners a 10-year payback period.”

Through PACE, homeowners can also repay the loan through a surcharge via their property tax bills.

A pathway towards a net-zero future

Through deep energy retrofits, SwitchPACE CIC’s municipal programs are reducing an average of 50 to 70% greenhouse gas emissions per year and have a market uptake of 2 to 5% of the housing stock.

“A large portion of all energy consumed in Canada comes from buildings, which creates great economic opportunity to invest in energy efficiency and solar,” adds Julian. “If we are to have a shot in building a net-zero future, we need to mobilize more low-cost private capital to enable 3 to 4 times more energy efficiency investments in buildings.”

With seven active programs across Nova Scotia, SwitchPACE CIC. is looking to launch 20 more programs across Canada within the next 2 years.

“VCIB has been very supportive of our program developments” says Julian. “We are looking forward to working with the climate finance team more in the future to scale efficiency financing across Canada.”

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Learn more about VCIB’s climate financing in our website. If you’re looking to finance a specific project, get in touch.

Unlocking the power of geoexchange: What every developer needs to know  

Geoexchange systems can decrease a building’s energy use by 33%, greenhouse gas (GHG) emissions by 47%, and are as much as 400% more efficient than conventional HVAC systems 

Posted on August 17, 2023April 16, 2025 by Cecilia Bermeo

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Besides transportation and electricity supply, one of the main challenges of decarbonizing a city is the heating and cooling of buildings. Outside of a manufacturing facility, heating and cooling systems are the top contributor to a building’s carbon footprint. In Canada alone, buildings take up nearly 30% of all energy consumed and are responsible for 26% of greenhouse gas (GHG) emissions.

Fortunately, the way buildings are being constructed in Canada is changing for the better. With the strengthening of Municipal building codes, real estate/condo developers have increased their focus on energy efficiency. If a developer is looking to meet (or exceed) city or building energy code requirements, implementing a geoexchange system is one of the best ways to do it.

What is the difference between geothermal and geoexchange?

The term “geothermal energy” points to a wide range of technologies. For example, when people talk about conventional geothermal technology they’re often referring to deep-drilled geothermal systems that extract high-temperature heat from kilometers below the earth’s surface – usually seen in industrial geothermal power plants.

Conversely, geoexchange is a form of shallow geothermal technology typically used to heat and cool commercial and residential buildings and houses.

How does a geoexchange system work?

Geoexchange systems use ground-source heat pumps to tap into temperature differentials just below the earth’s surface, typically at a depth between 45 to 120 meters (150 to 600 feet). During the winter, heat (energy) travels through a series of fluid-circulating pipes in contact with the ground.

The pipes use fluids (like water or glycerol) to carry heat from the Earth to the building, providing warmth through a duct system. In the summer, the heat of the building is transferred to the ground and then dissipated through the system’s loops, generating cool air in the process.

What are the benefits of a geoexchange system?

Geoexchange systems use the earth’s temperature to distribute heating and cooling, therefore they don’t require the burning of fossil fuels or any materials to operate. Once installed, the piping doesn’t need maintenance and the above-ground portions of the system require less maintenance than traditional systems.

These systems offer not only environmental benefits but also ensure safety with their odorless, flameless, and carbon dioxide-free operation, eliminating any fire hazards. The comfort of tenants is also enhanced since they provide a well-balanced distribution of heating and cooling, eliminating the common issue of uneven temperatures experienced with conventional systems.

What’s more, a geoexchange system can decrease a building’s energy use by 33%, greenhouse gas (GHG) emissions by 47%, and are as much as 400% more efficient than conventional HVAC systems – which translates into lower electric bills every month.

Breaking the cost barrier

One of the main reasons why geoexchange systems aren’t more commonly implemented is traditional HVAC systems are cheaper to install. Or at least they are initially; given the energy savings, geoexchange systems pay for themselves over time with demonstrated paybacks of between 5 to 7 years.

Targeted financing from the government and government agencies in Canada can also help pay for geoexchange projects. In Toronto, for example, the Toronto Green Standard Development Charge Rebate is available to projects that achieve higher levels of energy and carbon performance. For developers that want to own and finance their system, the Government of Canada provides business income tax incentives under Classes 43.1 and 43.2 in Schedule II of the Income Tax Regulations.

If developers wish to avoid the cost of installing the system altogether, they can engage clean energy utilities or third-party providers like Subterra Renewables, a leading low-carbon district energy developer, to be the owner/operator of the system.

Partnerships to unlock geoexchange potential

Through a construction financing partnership with Forum Equity Partners and Vancity Community Investment Bank (VCIB), Subterra Renewables has supported multiple geoexchange systems in the Greater Toronto Area.

“Despite the clear benefits, residential-scale geoexchange projects are usually too small to attract infrastructure financing from banks or pension funds who are searching for deals of $20 million or more,” explained Alfred Lee, Manager of Climate Finance at VCIB.

“Specialized suppliers of geothermal energy are essential, and we’re stepping up with the financing to help them succeed.”

After financing a half-dozen geoexchange projects, VCIB is a leading Canadian financier for a maturing market that’s ready to take the spotlight.

Financing for every stage of the geoexchange life cycle

VCIB’s financing covers geoexchange projects across a range of asset classes, types, and geographies — from new builds to refinancing successful projects as they move into the next operational life cycle, and from single-family homes and subdivisions to large condo complexes.

Trish Nixon, Managing Director of Climate Finance at VCIB, comments; “We’re seeing a large growth in interest for residential geoexchange as a way to improve residents’ homes. To reduce construction costs, many developers opt for a third-party financing model where a geo utility owns and operates the system.”

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For more information about geoexchange systems, including common barriers and misconceptions, read this recent study by Urban Equation for Sustainable Buildings Canada. If you’re a real estate developer or clean energy utility looking to finance a geoexchange project, get in touch.