A reduction of fossil fuel supplied energy and associated carbon emissions in residential buildings can be achieved through insulation improvements to the building envelope (attic, walls, foundation, windows/doors and air leaks), the installation of more efficient equipment for space heating (e.g., replacement of old furnaces with more efficient ones), hot water heating (HWH) (e.g. switch to more efficient HWH equipment, or switch from a natural gas to an electric hot water heater), and appliances (e.g. switch to energy efficient kitchen range, refrigerators, lighting), as well as the use of renewable sources of energy (both thermal and electricity, such as heat pumps and photovoltaics). Form a group (three to five students) and prepare a pre-feasibility study on the financial performance of energy efficiency measures. Consider energy retrofitting alternatives (such as continuous insulation, attic insulation, new windows, change of furnace, upgrading of domestic water heater, switching to heat pumps, etc.) to reduce the buildings energy consumption for the building assigned to your group. Your energy retrofit alternatives and associated financial analysis results should be presented through: 2. Deliverables Your report should include the following: 1. Part 1: Sketch the building based on the data provided. Provide a description of the building and its current energy consumption. Assume a square footprint, flat roof, and use the information provided for the building characteristics. Calculate the heating losses through the building envelope and the associated fuel consumption, carbon emissions, and the buildings energy consumption costs.

Part 2: Identify the energy retrofit measures to reduce the total energy consumption by 50%, or more, through improvements to the building envelope (attic, walls, foundation, windows/doors and air leaks), the replacement of the furnace (e.g., a new furnace has higher efficiency factor and is sized according to the new space heating demand; you may also choose to switch to a heat pump), new hot water heater (with higher efficiency, or switch to an electric one?), etc. Use available market data and internet searches (e.g., websites of Home Depot, RONA, Lowes) to identify materials and their purchase and installation costs. If it is difficult to find data on the installation costs you should assume a value. Calculate the new building energy consumption after the retrofit measures, and the associated energy cost savings, considering an average unit cost of electricity= 0.11 $/kWh and an average unit cost of natural gas (n.g.) = 0.17 $/m3 n.g.

Part 3: Use your energy savings calculations and your knowledge of engineering economy to perform a financial analysis of the proposed retrofit measures and assess the financial performance of the investment (the cost of your energy retrofitting measures). Are the energy retrofitting measures that you have chosen financially viable? (otherwise said: is the initial investment recovered through the annual savings in energy consumption and associated fuels?). 1. Evaluate the financial performance of the proposed energy retrofitting measures based on a Life Cycle Costing (LCC) analysis (in other words: find the NPV or PW of the cash flow). For your inflows consider the savings on natural gas and electricity, using the average unit cost of electricity and natural gas. Do not consider inflation or any natural gas or electricity fuel annual unit price increases.

2. Evaluate the financial performance of the proposed energy retrofitting measures based on a Life Cycle Costing (LCC) analysis, considering the energy costs mentioned previously, and considering an increase on the natural gas unit price and electricity of 3% annually (no inflation). 3. Evaluate the financial performance of the proposed energy retrofitting measures based on a Life Cycle Costing (LCC) analysis, considering the energy costs mentioned previously, and, additionally, an increase on the natural gas unit price and electricity of 3% annually and an inflation rate of 2%. 4. If the retrofit project is financed with a bank loan, what should be the loan interest rate so that the annual energy savings are able to pay back the annual loan payments? Assume an increase on the natural gas unit price and electricity of 3% annually; assume an inflation rate of 0%. (Hint: use an IRR analysis (or RATE), once you transform your inflows (savings) to annualized payments). Carbon emissions reductions through energy retrofitting measures 5. Due to the low cost of energy in Canada, energy retrofitting measures are (usually) not financially profitable. A carbon emissions reduction incentive could provide additional motivation to homeowners to undertake such energy savings measures. a. Evaluate the proposed energy retrofitting measures based on a Life Cycle Costing (LCC) analysis, if for the carbon emissions savings (in tonnes CO2) that were achieved through your energy retrofitting measures an incentive of 50$/ton CO2,saved is available ($50 for every ton CO2 that was saved through the energy retrofitting measures), which is also subject to a 2% increase every year. An increase on the natural gas unit price and electricity of 3% annually and an inflation rate of 2% is expected. (Hint: add the carbon emissions incentive value to the inflows of case 3 previously and find the NPV, or PW). b. It is argued that if the value of the carbon emissions reductions incentive is increased, more homeowners will be willing to undertake energy retrofitting measures. In the case that your NPV under a) previously is negative, what should be the value of the carbon incentive (in $/ton CO2,saved) so that the NPV of your cash flow is zero? (Hint: let x= value of the incentive in $/ton CO2,saved, set the NPV to zero and solve for x). Use the following information for your calculations: Assume 25 years for the lifetime of the retrofitting measures. Use an interest rate of 4% for your calculations. You may use your personal MARR (e.g., an interest rate that you use for your investments). You may (or may not) want to add a salvage value to the insulation (e.g., 10% of the initial value), since insulation upgrades may last up to 40 years

Helpful Information:

The one storey single detached house with a basement is located in Waterloo and was constructed in 1969.

Footprint = 115 m2

Area = 230 (238) m2

Volume = 594 m3

Height = 594/115 = 5.17 m (total building height, 2.58 m above grade main level)

Window to wall ratio (WWR) 20% total of above grade wall area

No ventilation system

Hot water and space heating fuel natural gas

No heat pump

Areas:

Area foundation = 115 m2

Aria attic = 115 m2

Area basement walls = 2.58 x 10.7 x 4 = 110.4 m2

Area above grade walls = 2.58 x 10.7 x 4 20% = 88.32 m2

Area windows+doors = 20 % from 110.4 m2 = 22.08

RSI (R) values:

Insulation foundation = 0.88 (5)

Insulation attic = 3.98 (22.6)

Insulation basement walls = 0.88 (5)

Insulation above grade walls = 1.84 (10.4)

Insulation windows+doors = 0.33 (1.9)

Temperature differences:

Outside (design) = - 19 0C

Inside = + 20 0C

T = 39 0C

T soil = 5 0C

Air leakage:

ACH (50 Pa) = 5.26

ACH average (7.26 Pa) = 1.5