Science & Environment

Upgrades to old buildings can help with Northwest climate goals, but at a high cost

By ANDREW ENGELSON (InvestigateWest)
Oct. 25, 2021 12 p.m.

Retrofitting programs make a difference in the Northwest, but the results are not enough to meet climate goals

Pumping insulation into walls and scrapping gas furnaces aren’t the most glamorous ways to attack climate change. Renovating old buildings seems downright mundane compared to fast-charging electric cars or efficient high-rise buildings. But for Francisco Ramos, upgrading his Northeast Portland home made a huge difference.

The 1944 house in Portland’s Cully neighborhood had no insulation, and the family had to plug in numerous space heaters to stay warm in winter. And relying on a window air conditioning unit in summer drove the family’s electric bills to between $300 and $400 per month.


With funding from the Energy Trust of Oregon, a nonprofit funded by Oregon taxpayers, the Ramos’ home was upgraded with an electric heat pump and weatherization last year at no cost to the family. The improvement cut the Ramos’ monthly electric bills by half and improved their lives.

A new Portland program, the Portland Clean Energy Community Benefits Fund (PCEF), is one of several efforts to accelerate improvements to existing homes and businesses that generate a growing share of climate-warming pollution in Oregon, Washington and British Columbia. The fund, which awarded its first grants this year, focuses on equity for low-income residents and communities of color.

Grants, rebates and other incentives help to upgrade individual homes and buildings on a case-by-case basis. But can programs like the one that assisted Ramos significantly reduce the region’s carbon emissions? It is a question of scope, money and pace.

Making buildings efficient is crucial to Cascadia’s goal of getting off fossil. Buildings are second only to transportation as a source of greenhouse gases in Washington, Oregon and British Columbia. Residential and commercial buildings account for about 27% of carbon emissions in Washington, and about 21% of Oregon’s total carbon pollution. British Columbia reports that “buildings and community” produce about 21% of the province’s climate emissions.

Largely because natural gas is popular for heating and cooking, building emissions are increasing rapidly; in Washington, emissions from buildings were up 51% from 1990 to 2015. And it is estimated that buildings in Vancouver, B.C., release nearly 60% of that city’s carbon pollution.

In Washington, regulators are setting standards to clean up commercial buildings. A program, rolling out under the state's 2019 Clean Buildings Standards law, sets standards to drive businesses to make efficient upgrades that should pay for themselves. While some cities, such as New York City, have mandatory energy efficiency standards, Washington's is the first statewide program of its kind in the United States.

For Washington to be on track for its net-zero climate goal — a vow to release no more greenhouse gas in 2050 than it captures — natural gas use in buildings must decline 14% by 2030. Today, however, residential gas use is actually increasing.

In March, British Columbia announced sector-based targets needed to meet its 2030 climate goals, with “buildings and community” requiring the largest reductions: emission levels 59%–64% less than in 2007.

These targets require tens of billions of dollars. Bruce Manclark, an energy consultant with Austin, Texas–based consulting firm CLEAResult, estimates that converting Seattle’s gas-heated homes to electric would cost more than $3.2 billion.

To achieve that scale of investment, says Manclark, Cascadia must move beyond a “piecemeal” approach that relies primarily on utility-based incentives and rebates to spur change. “Most of them have been well-managed and have solid results. But that’s kind of going the onesie-twosie approach,” says Manclark. (asterisk)

Home upgrades that make a difference

The Portland Clean Energy Community Benefits Fund was approved by voters in November 2018. Funded by a retail tax, expected to generate between $40 million and $60 million, it pays for projects focused on communities of color and low-income households.

This year, 45 projects totaling $8.6 million were funded, and the next cycle should be much larger. “Our next round of solicitation will be around $60 million,” says Sam Baraso, spokesperson for PCEF. “It should be even higher in the next three years.”

Portland funnels its energy upgrade dollars through community organizations and businesses. One recipient is Verde Builds, the contracting offshoot of a nonprofit created to bring environmental restoration to the predominantly Latino Cully neighborhood.

Verde Builds began a program to install electric heat pumps in 2019. And with a $165,000 Portland grant and additional funds from the Energy Trust of Oregon, Verde Builds plans to install 200 heat pumps in low-income homes. The Energy Trust of Oregon, founded in 2002, is a nonprofit funded by a 3% surcharge on utility bills in Oregon.

Recently, however, the trust has shifted toward equity-based assistance to low-income homeowners, although programs like its solar power incentives program only fund up to 50% of the total project cost.

Themba Mutepfa, Verde’s project coordinator, says his organization is seeing strong interest in heat pumps. “Especially since the heat wave, people have been very adamant about getting ductless heat pump systems in their homes.”

Another recipient of Portland’s inaugural round of clean energy funds is the Community Energy Project (CEP), which has helped low-income residents and people of color in Portland renovate their homes for more than 40 years. Recently, it has been working on roughly 200 homes each year. This year’s $890,000 grant will allow CEP to retrofit 20 Black-owned homes in Portland, according to executive director Charity Fain.

Many of these homes, heated by oil, will get heat pumps and a thorough renovation to their exterior, including insulation and new windows. Five will get rooftop solar panels. CEP estimates that overall, owners will see utility bills cut by one-third.

Portland’s program will “allow us to go in and do the whole home,” says Fain, something she says hasn’t been possible in the past. “We’re going to go into a smaller number of homes, but we’re going to go much deeper.”

Baraso, the PCEF spokesperson, notes that requirements for cost-effectiveness — maximizing the emissions reduction achieved for every dollar spent — has been a barrier for projects in communities of color, limiting them to the cheapest upgrades. He says the program’s mission is to ensure that often-marginalized communities get what they need: “This is beyond light bulb replacements. Other programs can go shallow, but we’ll go deeper.”


Washington launches a statewide effort

A novel program, Washington’s Clean Buildings Standards, is gearing up this year to inspire — and ultimately require — businesses to make upgrades that promise reasonably quick returns on investment.

The first phase of mandates will start in 2026, when owners of commercial buildings larger than 200,000 square feet will be required to perform assessments and make needed upgrades. The program will expand to cover buildings more than 90,000 square feet in 2027, and to buildings covering more than 50,000 square feet in 2028.

Emily Salzberg, managing director of the Buildings Unit at the Washington State Department of Commerce, says owners will be required to assess their buildings’ energy efficiency, completing so-called “benchmark assessments.” Because the process is complex, owners need to get started early, especially those who will be required to comply in less than five years.

Once those assessments are made, a building will be rated according to a standard set by an industry group, the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE).

Finally, the building’s energy-use intensity rating, which relates energy use to building size, is com-pared against a state average for different building types, taking the building’s particular energy requirements into account. “The energy use intensity for an average office building might be 60,” says Salzberg. “It might be 250 for a hospital, which has really high process loads.”

Buildings that aren’t at least 15% more efficient than the statewide average ASHRAE score for their building type must be upgraded, but only if the anticipated savings exceed the cost of the retrofit. For example, if an office needs a new $10,000 heating and cooling system to meet the standard, and the system will last 10 years, its owners must make the investment only if the upgrade saves them $1,000 per year in utility costs.

Many buildings can achieve significant savings and even comply with the standard simply by making smarter use of existing equipment, says Julia Weigel, a project manager at McKinstry, a Seattle consulting and construction firm.

Weigel predicts common upgrades will likely be to lighting, as converting to LED systems often achieves significant savings. Only buildings with significantly lower scores, she says, will have to take on costlier projects, like upgrading control systems or replacing boilers.

Even projects that pay off will often require a push from the state, says Weigel, because building owners must pay for them up front. “It requires significant funding that most are not prepared for,” says Weigel.

Meeting climate goals is a megaproject

Manclark, the energy consultant with CLEAResult, started adding up the cost of retrofitting homes in 2019 after the city of Seattle resolved to zero out its carbon emissions by 2050.

In 2016, the Seattle-based consulting firm Ecotope calculated that for Seattle to meet its target, homes would have to reduce their carbon emissions by 82% overall. Based on that figure, Manclark arrived at a $3.2 billion estimate for converting 80,000 Seattle homes that use natural gas in some form (heating, water heating, cooktops) to electric.

Manclark’s estimate didn’t include project administration and overhead. And since he made that calculation, equipment and installation costs have risen by roughly one-fifth. Tack those onto added costs and the price tag for electrifying Seattle’s homes to meet its 2050 climate goal will easily top $4 billion, says Manclark.

This spring, he repeated the exercise for Oregon and found that the cost of converting natural gas heating and water heaters in homes across that state would cost $16.1 billion.

Still, Manclark says, it’s not an impossible job. He says upgrading Cascadia’s buildings needs to be thought of as a megaproject like the $3.3 billion SR 99 tunnel, or the Climate Pledge Arena built for Seattle’s new professional hockey franchise. “It’s going to be like we pay for any other major project: We sell bonds, and we raise taxes.”

The scale of investment must be well beyond Portland’s $60 million-per-year clean energy fund or the $75 million assistance program to help businesses comply with Washington’s Clean Buildings Performance Standards, say such experts as Manclark and Weigel.

How could the region raise the billions required? Options are growing, but each comes with strings attached.

This fall the B.C. government and provincial utility BC Hydro announced a five-year, CA$260 million “electrification plan” that includes money to boost for heat pump rebates. Critics estimate, however, that the plan will trim provincial emissions by no more than 1.3%.

Washington state's carbon cap-and-trade system, approved by the Legislature in May, is projected to bring in hundreds of millions in revenue, though much of that is designated for roads, highways and transit. British Columbia's carbon tax, first implemented in 2008, generates revenue of about CA$1 billion each year, but the revenue-neutral tax is largely refunded to residents or used to offset other taxes.

Green bonds, like Oregon's Sustainability Bonds program, are an option if they are scaled up; Oregon's bonds raise about $40 million per year. During Washington's 2021 legislative session, some Democrats pushed the Washington Strong Act, which would have authorized the sale of $16 billion worth of green bonds, but that measure was set aside in favor of the cap-and-trade bill.

Federal dollars may also be on the table. The $1 trillion bipartisan infrastructure bill approved by the U.S. Senate last month has multiple provisions for improving buildings, including $3.5 billion for weatherization assistance and $500 million in grants to help make schools more energy efficient.

Canada's federal budget, approved in April, includes a $4.4 billion, five-year effort to assist home-owners in weatherizing and electrification.


This report is part of Getting to Zero, InvestigateWest’s yearlong reporting initiative on reducing carbon in the Cascadia region. InvestigateWest’s work is supported in part by the Fund for Investigative Journalism.