Barriers to Innovation and Change: The NRTEE report on Commercial Buildings Energy Efficiency

The National Round Table on the Environment and the Economy published today its long-awaited report on energy efficiency in the commercial sector.

Titled "Geared for Change" the report, which is the result of a partnership with Sustainable Technology Development Canada, presents a comprehensive analysis of the energy use of the commercial building sector Canada and its CO2 emissions, its fragmentation and complexity, as well as a particularly thorough analysis of barriers to the adoption of energy-efficient technologies in that sector.

In our ongoing quest to explore barriers to achieving sustainability, we reproduce in its entirety the summary of these barriers, which can be found in Table 4 on page 29 and 30 of the report:


Barriers to Energy Efficiency Technology Adoption in the Commercial Building Sector

Risk Management
• Market, technical, and financial risk
• Level of positive external/personal recognition for “doing the right thing” by installing the efficiency measure(s)
• Level of perceived risk that the efficient product may not perform as promised

Information Gaps
• Lack of complete data and information
• Lack of public understanding of infrastructure needs and resource constraints, i.e. the functionality, cost, drivers and challenges are unknown to the public
• Skills and labour shortage in the construction industry
• Lack of training resources (time, available education, funding) for building operators, inspectors, and trades
• Lack of interdisciplinary programs to promote integrated design processes between
universities and colleges
• Low awareness of available products and services
• Availability of installation and inspection services
• Low awareness of benefits: cost and co-benefit
• Required technical ability to assess the options
• Consumer preferences that do not value energy efficiency
• Existence of a viable infrastructure of trade allies

Value Chain and Principal-agent Relationship
• Level to which the incentives of the agent charged with purchasing the efficiency measures align with those of the person(s) that would benefit

First-mover Disadvantage
• Lack of enabling tools and techniques to facilitate market adoption of sustainable energy solutions
• Need to foster acceleration of advanced technologies
• Lack of performance monitoring of technology systems
• Access to appropriate financing
• Size of required energy efficiency investment vs. asset base
• Payback ratio – actual vs. required
• Level of effort/hassle required to become informed, select products, choose contractor(s), and install

Market Price Signals
• Energy pricing at levels that do not integrate externalities associated with the whole lifecycle (full-cost accounting)
• Energy pricing signals that do not reflect real-time costs

Institutional and Regulatory
• Codes, standards, and permitting processes that prohibit implementation of innovative energy efficiency technologies
• Constitutional jurisdiction for buildings includes all levels of government and results in different standards across the country
• Lack of long-term policy development due to short-term political agendas
• Limited horizontal cooperation/coordination to integrate policies and implementation
• Disconnect between longevity of infrastructure and short-term horizons on crucial decisions, such as budget allocations for maintenance and rehabilitation and rate structures
• Insurance industry acceptable practice, standards or levels of infrastructure service may lead to liability perceptions for professional designers, municipalities, developers