BC Energy Step Code Guide for Realtors: New Construction Efficiency, EnerGuide & Net Zero
BC's Energy Step Code is reshaping new home construction across the province — setting progressively stricter energy efficiency requirements with a target of net-zero energy ready homes by 2032. As a realtor working with new construction buyers or pre-sale listings, understanding the Step Code framework, EnerGuide ratings, and municipal adoption levels helps you provide better advisory and avoid misrepresentation.
Key Takeaway for Realtors
The BC Energy Step Code is a 5-level framework — Step 1 is the BC Building Code baseline; Steps 4–5 are net-zero ready. Municipalities can require any step level for new construction. Vancouver, Burnaby, North Vancouver, and Victoria require Step 3+ for most projects. Step Code compliance is verified by a registered Energy Advisor using the EnerGuide rating system. Higher steps add $5,000–$50,000 to construction cost but lower lifetime energy bills. Pre-sale contracts should specify the Step Code level the developer is targeting.
Background: Why BC Introduced the Energy Step Code
BC's CleanBC Roadmapcommits the province to achieving net-zero greenhouse gas emissions by 2050. Buildings account for approximately 12% of BC's total emissions — and new homes built today will still be standing in 2075. The Energy Step Code was introduced in 2017 as a tool to progressively raise the floor on energy performance for new buildings, giving builders and municipalities a clear path toward net-zero construction.
Unlike prescriptive building code requirements (which specify what components to use — insulation R-value, window U-value), the Energy Step Code uses a performance-based approach. Builders must demonstrate that the completed home will achieve a specified energy performance level — measured through energy modelling — rather than just meeting a checklist of component specifications.
This gives builders flexibility to choose how to achieve the target: better windows, more insulation, high-efficiency heating systems, heat recovery ventilation, or a combination. The result is a diverse range of high-performance homes that all meet the same energy standard.
2017
Energy Step Code introduced in BC — world-first performance-based code for new construction
2032
Target year for net-zero energy ready (Step 4+) to become the BC Building Code baseline
5
Step levels: Step 1 = code minimum; Step 5 = net-zero (generates as much energy as it uses)
The 5 Energy Step Code Levels Explained
The Step Code defines performance thresholds using two key metrics:
- →TEDI (Thermal Energy Demand Intensity) — the amount of energy needed to heat and cool the building, measured in kWh/m²/year. Lower = better.
- →TEUI (Total Energy Use Intensity) — total energy consumed by the building for all purposes (heating, cooling, lighting, hot water, appliances), in kWh/m²/year. Lower = better.
- →EnerGuide Rating — an overall score from 0–100 derived from energy modelling.
BC Building Code Baseline
Meets minimum BC Building Code requirements. No energy modelling required in most cases. This is the default if a municipality has not adopted a higher step.
TEDI
No TEDI limit
TEUI
No TEUI limit
Better Than Code
Requires energy modelling and demonstrates improved performance over Step 1. Builder has full flexibility in how to achieve it — typically better windows, more insulation, or a more efficient heating system.
TEDI
Climate zone dependent
TEUI
Climate zone dependent
Advanced Energy Efficiency
Common municipal requirement in Metro Vancouver, Victoria, and other larger BC cities. Requires meaningful envelope improvements: triple-pane windows, high-performance insulation, airtight construction with heat recovery ventilation.
TEDI
Significantly lower than Step 2
TEUI
Reduced vs. Step 2
Near Net-Zero Energy Ready
The 2032 provincial target for all new residential construction. The building is designed to achieve net-zero energy balance if solar panels are added (though panels are not required). Requires exceptional envelope, HVAC, and ventilation systems.
TEDI
Very low thermal demand
TEUI
Near net-zero ready
Net-Zero Energy
True net-zero energy: the home generates as much energy as it consumes annually, typically through solar photovoltaic panels combined with an ultra-efficient building envelope and HVAC. Requires energy storage or grid tie-in to balance seasonal variation.
TEDI
Ultra-low thermal demand
TEUI
Net-zero — generates as much as it uses
Municipal Adoption: Who Requires What?
The BC Energy Step Code is optional for municipalities — each local government decides whether to adopt it and at what level. Here is the adoption status for major BC municipalities as of 2026:
| Municipality | Required Step (Residential) | Notes |
|---|---|---|
| City of Vancouver | Step 4 | Net-zero ready required for new single-family, semi-detached, and multi-unit residential |
| Burnaby | Step 3 | Step 3 required for all new residential; working toward Step 4 pathway |
| North Vancouver (District & City) | Step 3 | Step 3 for most residential; Step 4 for larger multi-unit projects in some areas |
| Victoria | Step 3 | Step 3 required; Victoria Climate Leadership Plan targets Step 4 by 2027 |
| Richmond | Step 2 | Step 2 for residential; planning update underway toward Step 3 |
| Surrey | Step 2 | Step 2 required; larger developments may face Step 3 requirements under rezoning conditions |
| Kelowna | Step 2 | Step 2 for new residential; Interior climate zone has different TEDI thresholds than Coast |
| Whistler | Step 3 | Step 3 required; higher heating demands in alpine climate make TEDI compliance challenging |
| Smaller municipalities (general) | Step 1 (BC Building Code) | Many rural and smaller municipalities have not adopted Step Code; only BC Building Code applies |
Practice Tip: Always Verify with the Builder
Municipal adoption levels change regularly. Before representing a new construction buyer, confirm the required Step Code level with the builder or the local building department. Some developers voluntarily build to a higher step than required — this can be a selling feature worth highlighting.
EnerGuide Ratings: What They Mean for Buyers
The EnerGuide rating system, administered by Natural Resources Canada (NRCan), is the measurement tool for BC Energy Step Code compliance. All new homes seeking Step Code compliance must be evaluated by a Registered Energy Advisor (REA) — an NRCan-certified professional who performs energy modelling and on-site testing.
The EnerGuide Process for New Homes
Pre-Construction Energy Model
The Energy Advisor creates a detailed computer model of the proposed home using the builder's plans — specifying insulation levels, window specifications, HVAC systems, ventilation, and airtightness targets. This generates the pre-construction EnerGuide rating.
Mid-Construction Site Visit
For higher step levels, the Energy Advisor typically visits during framing to verify insulation installation, window specs, and other envelope details. Deficiencies identified at this stage are easier and cheaper to correct than after drywalling.
Airtightness Testing (Blower Door Test)
After construction is complete but before occupancy, a blower door test measures how airtight the building is — expressed as air changes per hour at 50 Pascals (ACH50). Higher steps require tighter construction: Step 3 typically requires less than 3 ACH50; Step 4 requires less than 1.5 ACH50.
Final EnerGuide Label
The Energy Advisor issues a final EnerGuide label showing the home's energy performance rating (0–100 scale), estimated annual energy consumption in gigajoules (GJ), and the Step Code compliance level achieved. This label should be provided to the buyer at closing.
EnerGuide Score Benchmarks
| EnerGuide Score | Performance Level | Step Code Equivalent | Estimated Annual Energy Cost* |
|---|---|---|---|
| Below 76 | Poor / Below code | Pre-Step Code | $3,000–$5,000+/yr |
| 76–82 | Code minimum (Step 1) | Step 1 | $2,200–$3,500/yr |
| 83–86 | Better than code | Step 2 | $1,800–$2,800/yr |
| 87–91 | Advanced efficiency | Step 3 | $1,200–$2,000/yr |
| 92–96 | Near net-zero ready | Step 4 | $600–$1,400/yr |
| 97–100 | Net-zero energy | Step 5 | Net producer (utility credits possible) |
*Estimates for a 2,000 sq ft home in Greater Vancouver climate zone. Costs vary by home size, occupant behaviour, and energy prices.
How Step Code Affects New Home Prices and Value
| Step Level | Typical Construction Premium (vs. Step 1) | Annual Energy Savings | Simple Payback Period |
|---|---|---|---|
| Step 1 | Baseline ($0 premium) | — | — |
| Step 2 | $3,000–$8,000 | $400–$800/yr | 5–12 years |
| Step 3 | $8,000–$18,000 | $900–$1,800/yr | 8–15 years |
| Step 4 | $20,000–$50,000 | $1,500–$3,000/yr | 12–25 years |
| Step 5 (with solar) | $40,000–$90,000 | $2,500–$5,000+/yr (net credits possible) | 15–30 years |
Financing Advantages for High Step Code Homes
CMHC Energy-Efficient Mortgage (Eco Plus)
CMHC's Eco Plus program offers a 25% refund on default insurance premiums for homes with an EnerGuide rating of 90+. On a $750,000 insured mortgage, the premium refund can exceed $4,500 — a meaningful incentive for Step 4+ buyers.
BC Hydro CleanBC Rebates
BC Hydro and FortisBC offer rebates for high-efficiency HVAC equipment, heat pumps, and insulation upgrades that contribute to Step Code compliance. Rebates range from $500 for a heat pump water heater to $6,000+ for a new home meeting specific efficiency targets.
Canada Greener Homes Grant
Homeowners who commission an EnerGuide evaluation and implement energy upgrades can access federal Canada Greener Homes grants of up to $5,000, plus interest-free loans of up to $40,000 for major retrofits. Primarily for existing homes, but useful context for resale buyers considering improvements.
Mortgage Qualification Advantage
Some lenders (RBC, TD, BMO) now offer green mortgage products with slightly preferred rates for Step 3+ homes. Energy savings also reduce effective monthly housing costs — useful context when helping buyers determine affordability on a Step 4 home with a higher purchase price.
Pre-Sale Condos and New Construction: Step Code Disclosure
When representing buyers of pre-sale condos or new construction homes, the Energy Step Code level is a material disclosure that affects long-term operating costs. Builders must disclose the targeted Step Code level in the Disclosure Statement filed with BC Financial Services Authority (BCFSA) for any presale offering of 5 or more units.
However, the targeted step at time of disclosure may differ from what is ultimately achieved — particularly if the builder is targeting a specific step but energy modelling shows it cannot be met without design changes. Buyers should:
Request the energy model summary or EnerGuide pre-construction rating letter from the developer
Confirm which Step Code level is required by the municipality for this project type
Ask whether the developer is building to the required step or voluntarily targeting a higher step
Verify the EnerGuide label will be provided at possession/closing — add this as a contract term if not already in the purchase agreement
For Step 4 homes: confirm whether solar panels are included or whether the roof/electrical is solar-ready (roughed-in)
For high-rise condos: note that individual unit EnerGuide ratings may vary from the whole-building Step Code compliance certificate
Advisory Scripts for Energy Step Code Conversations
Buyer Comparing Step 2 vs. Step 3 New Home
“"The Step 3 home will cost you about $12,000 more upfront — but you're looking at saving roughly $900–$1,500 a year in energy costs. Over 10 years, that's $9,000–$15,000 in savings. And as energy prices rise, that gap gets bigger. There's also a CMHC mortgage insurance premium refund if your EnerGuide score is 90+ — that could be another $2,000–$4,000 back at closing. The Step 3 home is likely the better long-term value."”
Buyer Asks Why the Pre-Sale Condo Is 'More Expensive Than the Resale Next Door'
“"Part of what you're paying for is the Step 3 energy compliance built into this building. The resale unit next door was built in 2015 to lower efficiency standards — it probably costs $1,200–$1,500 more per year to heat and cool. The new unit also has a heat pump instead of a gas furnace, which means lower operating costs and less exposure to natural gas price increases. You're paying more upfront for lower running costs over the life of the home."”
Listing Agent for New Construction Builder
“"We should highlight the Step 3 EnerGuide rating prominently in the marketing. First-time buyers may not know what it means, so let's frame it as '35% lower energy costs than a standard new home, plus $3,500 CMHC premium refund eligible.' That's a compelling number. We should also mention the heat recovery ventilation — buyers care about indoor air quality now more than ever."”
Buyer Asks About the EnerGuide Certificate
“"Your contract should include a provision that the builder provides the completed EnerGuide evaluation and Step Code compliance certificate at or before possession. This isn't always standard — let me check the purchase agreement. If it's not there, I'll add it as a term before you sign. The certificate confirms what you're actually getting — it's basically the energy performance warranty for your new home."”
Frequently Asked Questions
What is the BC Energy Step Code?▼
The BC Energy Step Code is a series of five progressively more stringent energy efficiency standards for new residential and commercial construction in BC. Introduced in 2017 and updated in 2023, the Step Code allows municipalities to require higher efficiency levels beyond the BC Building Code baseline. Steps 1–3 focus on reducing energy use intensity; Steps 4–5 target net-zero energy ready performance. The provincial target is net-zero energy ready (Step 4 or 5) for all new residential construction by 2032.
How does the BC Energy Step Code affect new home prices?▼
Higher Energy Step Code requirements add to new home construction costs. Industry estimates suggest Step 3 adds approximately $5,000–$15,000 per unit over the BC Building Code baseline, while Step 4 (near-net-zero) adds $20,000–$50,000 depending on home size, climate zone, and building type. However, buyers typically recoup these costs over time through lower energy bills — Step 4 homes can save $1,500–$3,000 annually in energy costs compared to minimum code homes.
What is an EnerGuide rating and how does it relate to the Energy Step Code?▼
An EnerGuide rating is a standardized measure of a home's energy performance, expressed as a number between 0 and 100. Higher numbers indicate better performance (100 = net-zero energy). BC's Energy Step Code uses EnerGuide ratings to define compliance thresholds for Steps 1–5. A Step 2 home might have an EnerGuide rating of 83–86 depending on climate zone, while a Step 4 (net-zero ready) home would score 90+. Builders must commission an EnerGuide evaluation — performed by a NRCan-registered Energy Advisor — to demonstrate Step Code compliance.
Do all BC municipalities require the Energy Step Code?▼
No. While all BC municipalities have access to the Energy Step Code, adoption and the required step level varies by community. Vancouver, Burnaby, North Vancouver, and Victoria require Step 3 or higher for most new residential construction. Smaller municipalities may require only Step 1 (BC Building Code baseline) or have not yet adopted Energy Step Code requirements. Realtors and buyers should check the specific requirements with the local building department or confirm the step level with the builder.
Does the Energy Step Code apply to renovations or only new construction?▼
The BC Energy Step Code primarily applies to new construction. However, additions over a certain size threshold may need to meet current code requirements. Major renovations that trigger a building permit may need to comply with certain energy efficiency provisions under the BC Building Code, but they do not automatically require full Step Code compliance. Some municipalities have introduced incentive programs (rebates, permit fee reductions) for voluntary Step Code upgrades in renovations.
Key Resources
| Resource | What It Provides | Access |
|---|---|---|
| BC Energy Step Code Council | Technical resources, training, municipal adoption map | energystepcode.ca (free) |
| NRCan EnerGuide for New Homes | Find registered Energy Advisors; EnerGuide explanation | nrcan.gc.ca (free) |
| BC Hydro CleanBC | Rebate programs for energy-efficient homes and equipment | bchydro.com/rebates (free) |
| CMHC Eco Plus Program | 25% mortgage insurance premium refund for EnerGuide 90+ homes | cmhc-schl.gc.ca (free) |
| Municipal Building Department | Confirm current Step Code requirements for specific projects | Varies by municipality |
Track new construction listings with Step Code compliance notes
Magnate360 lets you attach EnerGuide certificates and energy disclosures to listings — and flag Step Code compliance levels for buyer advisory.