CIQS - Construction Economist Publication

Article written by Angela Lai - Fall 2017

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We may all have heard of Passive House; however, a clear understanding of what it really means may not be apparent. A few things to note are that Passive House is not new, with the concept of  ‘superinsulation’ dating back to the energy crisis of the 1970s, and it does not relate only to houses, but also encompasses  a wide category of building types including commercial offices and schools. So, what is the function of Passive House? The term and standard evolved from Europe, in particular from Germany, and is presently a voluntary standard, i.e., not yet promulgated by law or by any building codes. Thestandard will tremendously reduce energy consumption for heating and cooling. Essentially, Passive House must meet the following design requirements:  
  • The Space Heating Energy Demand is not to exceed 15kWh/m2/per annum
  • The Primary Energy Demand must not exceed 60kWk/m2/per annum
  • Airtightness must achieve a maximum of 0.6 air changes per hour at 50 Pascals
  • Thermal comfort must be met for all living areas during both winter and summer with not more than 10% of the hours in a given year over 25 degrees Celsius  (Source: Passive House Institute)
The common perception and initial reaction may be that it is just another environmental assessment method grouped in with LEED, the Living Building Challenge, etc.; however, there are clear differences, which result in tangible benefits to both the comfort and economic impact of occupants. Passive House is an energy efficient standard—energy usage is reduced with accompanying cost impacts but it is also a comfort standard that through rigorous design and quality controls, a building is free from drafts, cold spots, overheating, yet has a constant supply of outside filtered air. From personal experience of being in buildings that are either too hot or too cold, and stuffy, knowing that we can build better buildings for enhanced comfort levels cost effectively would be a desirable consideration for all buildings.  
Angela Lai, FRICS, PQS, LEED AP O+M is a Partner with Core Two, a property and construction cost consultancy locally based in Vancouver, BC and is on the instructing team for Passive House Canada. Angela has over 17 years’ experience in the construction and development industry spanning South Africa, the UK and Canada. Angela's experience is diverse; she has worked as a cost manager, loan monitor and a management consultant, and she has specialist expertise in sustainability, life cycle and FM costing. She is the current past President of CIQS-BC, past Director for the CIQS National Board and Vice Chair of RICS-BC. In addition, Angela teaches part-time at BCIT and is the instructor for the newly launched QS in Americas Foundation course.
Government ‘gets it’ and is endorsing the use of Passive House. However, with developers and the private sector, this may be a different story. Where Passive House design excels is that the economics and numbers do work, although both capital and life cycle costs need to be considered.

First, considering capital costs, research has found that incremental capital costs are approximately 2% to 8% with Passive House buildings.  These studies were undertaken Europe where Passive House building is more mature. In Canada, the incremental costs would vary depending on several factors including climate, the type of building and the availability of materials. Passive House Canada reports that the incremental costs are typically 10%, which are attributable in the main to increased insulation, better quality windows, air tightness and ventilation systems. This high incremental cost is expected considering that the first Passive House in Canada (the Austrian Olympic Passive House) was only completed in Canada 7 years ago. It is expected that this number will reduce as familiarity with the standard increases. The key factor influencing building would be the learning curve premium—capital costs should reduce as builders become more familiar with, and faster at, building to Passive house design.

Second, an important consideration in establishing the economic case are the life cycle costs of Passive House designs, in particular the energy savings over a determined assessment period, which could be an owner’s mortgage payment period. Passive House Canada has reported that there is an approximately 80-90% reduction in annual heating/cooling, with the energy savings offsetting most of the increased capital costs. There may also be further reduction in life cycle costs through the use of approved Passive House materials, which may prove more robust and have longer life spans than conventional materials.

The unquantifiable consideration is increased comfort levels, an absolute in Passive House buildings. Lastly, convincing clients and builders of why it is best to build to Passive House standards is to future-proof against rising energy prices. Energy is the basis of the modern world that fuels both households and the economy. Access to cheap energy is essential as it affects economic stability, which ultimately affects us. Another key justification is that reduced energy use means reduced greenhouse gas emissions, which have a tangible effect on climate change,
The City of Vancouver has recognized the benefits of Passive House and is endorsing it. Starting in 2020, the City is targeting all new civic buildings to be carbon neutral, and has made processes available to projects pursuing certification. As part of the City’s ongoing Green Action Plan, it is helping home builders to attain certification under the Passive House Standard by:
  • publishing a study quantifying the extra costs and benefits from efficient construction methods,
  • assembling a climate specific reference guide for architects and designers supporting the attainment of required performance levels,
  • having had more than 100 of its staff attend training offered by Passive House Canada, and
  • amending and developing bylaws that had posed additional challenges for builders trying to reach Passive House standards. (Source: Ecohome, March 2017.)
BC Housing has also added Passive House to its recommended third party-rating systems for Green Building standards. BC Housing also was one of the industry partners supporting the new High- Performance Lab Building (HPBL) at BCIT for the purpose of training technology students in the construction of energy efficient buildings, including envelope wall assembly, air-tightness testing and heat recovery ventilation systems.
You may be asking why there is yet another green building standard when there is LEED. LEED is the leader in certification of green buildings and is more readily recognized; however, there is a common misconception that all green buildings use less energy. It will depend on the credits rating sought and it has been found that some certifications do not actually reduce energy usage to any significant amount whereas Passive House has consistent data showing lower energy use. (Source: Passivscience.)
The number of projects seeking Passive Accreditation is on the increase in Canada. Clients are often not convinced to incorporate sustainable options unless savings can be demonstrated. We are best placed to support clients in making an informed decision through establishing an economic case. We know that capital costs are increasing (for now), so it will be important demonstrate to them what the savings would be in the long term. To offset increased capital costs, there is the opportunity to value engineer less critical components that do not support Passive House functionality.
It is anticipated that code changes will  eventually meet the Passive House standard, but at this time whilst the industry to getting to grips with the new standard, there will be incremental capital costs, but also tangible cost savings which would need to be demonstrated to the industry. With increasing energy costs, it would be essential to future-proof against this with reduced energy use. As quantity surveyors, we can ride on the crest of the wave and ensure that we are well placed to advise clients on the financial benefits of building to Passive House standards.

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