Over the past few years, I've noticed a shift in the questions building owners are asking.

Ten years ago, many projects were focused on reducing utility bills.

A few years ago, much of the discussion centered around incentives such as 179D, utility rebates, and LEED certification.

Today, more owners are asking about carbon emissions, electrification, net zero buildings, and long-term decarbonization plans.

That often leads to a term that sounds more complicated than it really is:

Building Decarbonization Roadmap.

So what is a decarbonization roadmap, and does it require an energy model?

What Is a Building Decarbonization Roadmap?

A building decarbonization roadmap is simply a plan for reducing greenhouse gas emissions over time.

In most cases, the roadmap identifies:

• Where the building's emissions come from today
• Which improvements will reduce emissions
• The expected cost of those improvements
• The expected carbon reduction
• A recommended implementation sequence

Think of it as a long-term plan rather than a single project.

A building owner may not replace every system at once. Instead, they may plan improvements over 5, 10, or even 20 years as equipment reaches the end of its useful life.

Where Do Building Emissions Come From?

For most commercial buildings, emissions generally come from:

• Electricity consumption
• Natural gas consumption
• Fuel oil or propane, if applicable
• District heating or cooling systems

The largest contributors often include:

• Heating systems
• Cooling systems
• Ventilation systems
• Lighting

Many projects applying to the FCM Green Municipal Fund include an energy model.

Far fewer include one that actually reflects how the building operates.

On paper, the model may look reasonable. The report is clean. The savings appear solid.

But if the assumptions are off, the results are off. And when funding decisions are based on those results, that becomes a real risk.

What FCM Is Really Looking For

Programs supported by the Federation of Canadian Municipalities (FCM), including the Green Municipal Fund (GMF), are designed to support projects that deliver measurable environmental and energy performance improvements.

At a high level, that means:

• a credible baseline
• realistic energy savings
• defensible assumptions

In most cases, the energy model is the primary tool used to demonstrate all three.

That makes the quality of the model critical.

Where Energy Models Typically Go Wrong

In practice, many models are built to satisfy a requirement, not to reflect actual building performance.

Common issues include:

• models not tied to utility data
• ventilation rates that do not match real operation
• unrealistic occupancy and schedule assumptions
• plug and process loads that distort results
• stacked energy conservation measures that overstate savings

The model runs. The outputs look reasonable.

But the building does not behave that way.

That disconnect is where problems start.

Why This Matters for Funding

Funding decisions rely on projected performance.

When applying for energy funding in Canada, the energy model is often treated as a checkbox.

It gets built, included in the application, and used to estimate savings.

But in reality, the model is not just supporting the project. It is driving the entire financial case.

If the model is wrong, the savings are wrong.

And if the savings are wrong, the funding decision is built on a shaky foundation.

Funding Decisions Are Based on Projected Savings

Programs across Canada, including those supported by the Federation of Canadian Municipalities (FCM), rely on projected energy savings to evaluate projects.

Those projections determine:

• whether a project qualifies
• how much funding is awarded
• whether the investment makes sense

All of that comes back to one thing:

The energy model.

The Problem: Most Energy Models Are Not Built for Accuracy

In practice, many models are created to meet a requirement, not to reflect reality.

They often rely on:

• assumed operating schedules
• estimated plug and process loads
• simplified ventilation assumptions
• default system performance

The model runs. The report looks clean. The savings appear reasonable.

But that does not mean the results are accurate.

Even small differences in assumptions can shift results significantly, especially when evaluating multiple energy conservation measures.

What Happens When the Model Is Off

When a model is not grounded in actual building performance, several things start to break down:

What Is the Investment Tax Credit (ITC) and Why It Matters

The Investment Tax Credit (ITC) is one of the most powerful financial incentives available for energy projects in the United States. It allows building owners and developers to recover a significant percentage of project costs as a direct reduction in federal tax liability.

For projects involving solar, battery storage, geothermal, and other qualifying systems, the ITC can dramatically improve project economics by lowering upfront costs and accelerating payback.

But here’s what most people miss:

➤ The value of the ITC is not fixed. It depends on how the project is designed, documented, and structured.

Small decisions—like how costs are categorized, how systems are defined, or whether certain requirements are met—can change the credit by tens or even hundreds of thousands of dollars.

That’s why the ITC isn’t just a tax benefit. It’s a strategic lever that can make or break the financial viability of a project.

At a high level, the ITC allows you to claim a percentage of your project cost as a tax credit.

• Base credit: typically 30% of eligible costs
• Potential adders: +10% to +40% depending on project conditions (domestic content, location, low-income programs)
• Applies to:
  • Solar PV
  • Battery storage
  • Geothermal systems
  • CHP and other qualifying technologies

Even more important:

➤ The ITC applies to more than just equipment

It can include:

• Engineering and design
• Installation labor
• Interconnection costs
• Permitting and soft costs