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Energy
| 04/07/16

Ontario, Nova Scotia blaze a path to fund energy efficient retrofits

TCE

Energy-efficient home retrofits have taken off in Ontario and Nova Scotia as a result of small tweaks to legislation in the last five years.

The two provinces amended local improvement charge (LIC) legislation to allow municipalities to launch their own retrofit programmes that let homeowners pay for renovations such as insulation, solar hot water, heat pumps and draft-proofing via their property taxes. Instead of paying sometimes tens of thousands of dollars up front, or via sometimes hard-to-access bank loans, households can pay back the sums over time to their town or city government.

In 2011, as Halifax was first launching an LIC retrofit pilot programme, Vancouver’s Columbia Institute, a centre-left think-tank, issued a first study of the concept. Last month, the institute issued a second report, This Green House II, outlining how since then the two provinces have seen the concept take off. Toronto has established a Home Energy Loan Program, Guelph passed a by-law last fall to replicate the scheme, and 18 other governments in the province are now exploring similar efforts. In Nova Scotia, beyond the provincial capital, Bridgewater, Shelburne, Berwick and Guysborough have all passed similar by-laws to establish LIC programmes.

The PICS-supported study concludes that key to success is simplicity – specifically, offering a one-stop-shop to process applications for financing, building permits, inspections, retrofit evaluation and matching grants and rebate programmes, which often are administered by other levels of government.

The report also references the findings of PICS research performed in 2015 on a similar mechanism known as on-bill financing, whereby instead of the municipality, energy utilities are the ones that underwrite loans to homeowners or commercial building owners to pay for the improvements. Akin to the property-tax mechanism, loan payments are then added to a household’s utility bill. In the latter case, the decreased energy demand as a result of the retrofit lowers energy costs so that there’s little to no net change in utility bills until the loan is paid off.

While energy efficiency building retrofits may not seem as sexy as solar farms or electric vehicles, in Canada, they are a large piece of the clean economy puzzle. Energy use in buildings accounts for a major part of the country’s emissions, largely as a result of how cold Canada can be in the winter, even in some of the warmer regions. In British Columbia, residential and commercial buildings account for some 20 per cent of energy use and 12 per cent of greenhouse gas (GHG) emissions. In some communities such as Saanich, BC, heating and cooling are responsible for 30 per cent of greenhouse gas emissions. According to the green house report, widespread energy efficiency investments in the residential sector could reduce Canada’s entire GHG emissions by four percent, as well as make homes healthier and cheaper to run.

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