There are two things that are clear about high rises:
One is that Toronto has a staggering number of these residential and commercial buildings and development shows no sign of stopping. The other, is that these buildings present unique energy management challenges and opportunities. Taken together, these towers are racking up sky-high costs in terms of lost efficiency; meanwhile the latent demand for energy retrofits focused on conservation and co-generation likely reaches into the hundreds of millions of dollars.
Toronto – at or near the top in North America in terms of total number of towers and the number of towers per capita – has no choice but to address these energy challenges, head-on. And if the city applies some foresight and thoughtful planning, there’s no reason why Toronto can’t become a leader in the urban green energy sector. The alternative is to wait for some other region or municipality to take the lead and then to import their ideas, products, and services at a much higher cost, and with far less economic growth for the city. The choice seems obvious.
Imagine an urban green energy incubator that focuses on the business opportunities presented by Toronto’s aging inventory of high rise towers. Imagine the spillover of expertise and services into the design of newer high-rise buildings and low-rise buildings in the future. Hundreds of full time jobs will result, hundreds of millions of dollars will be invested here in Toronto, and the other markets will look to Toronto companies to solve their high-rise energy challenges. It’s an exciting prospect, but it the advantage has to be seized soon.
The snag is that founding and funding such an incubator and the businesses that it spawns requires capital on terms that traditional lenders are reluctant to accept. But fix the problem of financing, and Toronto could release an avalanche of innovation and entrepreneurial activity.
One such approach to financing is to seek regulatory or policy changes from national institutions like the Ministry of Finance, the Canada Mortgage and Housing Corporation, or the big banks themselves. A shorter route to the same end might be found in the example of Nelson, British Columbia, where the local hydro utility lends energy retrofit capital and recovers it through its regular billing system. While energy usage declines after the retrofit, the hydro utility simply bills at the same rate as before until it has recovered the money it loaned to its customer. During that time, customers live and work in greater comfort, and at the end of the repayment term, building owners have a more modern and valuable property.
Toronto has a hydro utility with nearly 700,000 customers. With a little imagination, or just imitation, Toronto Hydro could provide the incentive for a massive amount of entrepreneurial activity, resulting in investment and jobs, exports of goods and services, and a better quality of life for Torontonians.
But in the end, it takes more than money to stimulate regional economic growth. It takes people, organized into companies, led by competent entrepreneurs to exploit the combination of latent demand and available capital. And that’s where incubators come in. If we don’t unleash demand by providing access to capital, and we don’t accelerate the growth and competence of companies through business incubation, we’ll wind up buying our solutions from somewhere else, and paying a hefty premium for it.
Toronto has the means and the motive to take the lead on this important initiative. Are we up to the challenge?