Designing a utility on-bill financing program for home energy retrofits in Calgary and Edmonton

Alberta Ecotrust Foundation, a Low Carbon Cities Canada partner for both the City of Calgary and the City of Edmonton, will lead a program design study to develop a utility on-bill financing program to complement the province’s PACE-style (Property Assessed Clean Energy) Clean Energy Improvement Program (CEIP). If successful, the shared program design could see Calgary adopt a clean energy improvement program with on-bill financing, and Edmonton adopt on-bill financing alongside its recent FCM-funded CEIP launch. The study will be completed by the Social Innovation Academy (SIA), a non-profit consultant with more than a decade of research and investment experience mobilizing capital for environmental initiatives. In close collaboration with Alberta Ecotrust and the cities of Calgary and Edmonton, SIA will do the following: collect information from the cities to develop a preliminary program design; lead a comprehensive engagement plan to solicit feedback from stakeholders, including utilities, financial institutions, contractors and homeowners; and refine the program design for presentation to both cities. Based on earlier study work, the target will be to finance 500 home energy retrofits per year across both cities through the clean energy improvement and on-bill financing programs. Over five years, the programs would support 2,500 home energy retrofits. This is anticipated to result in energy savings of 12,716 GJ per year and greenhouse gas emissions reductions of 1,452 tCO2e per year. Both cities are seeking to re-invigorate their economies in response to the expected long-term trends in the oil and gas sector and the acute impacts of the COVID-19 pandemic. If the targeted homeowner participation is achieved, the economic benefits would include $10 million in annual spending on home energy upgrades, creating 70 to 100 job-years annually. Participants will also benefit from energy bill savings, improved home comfort and indoor air quality, and increased resilience to climate change. This initiative is supported by Calgary’s Climate Resilience Strategy (2018), which identifies innovative financing approaches and funding opportunities for its aging building stock as being critical to achieving sustainable prosperity, and the city’s commitment to reducing community greenhouse gas emissions to 80% below 2005 levels by 2050. The initiative is also supported by Edmonton’s Community Energy Transition Strategy (2014), which states that 40% of city emissions originate from buildings, calls for establishing a green renovation program for existing homes and sets a goal for the city to become carbon-neutral by 2050. Innovative aspect(s): Past study work conducted by the City of Edmonton outlines the challenges of scaling CEIP in Alberta, and specifically the high administrative costs and difficulty accessing capital markets. By undertaking this study collectively and developing a framework for shared program administration, Calgary and Edmonton will magnify impacts for the same amount of work, expand the capital available for home energy retrofits in both cities and accelerate market transformation. The adoption of two distinct financing programs may serve as an invaluable case study for municipalities seeking to drastically transform the home energy financing market in their regions. Replicability: · The joint study approach could be replicated by municipal cohorts seeking to achieve efficiencies and adopt multiple financing programs in their regions · The City of Toronto, which has an established PACE-type Home Energy Loan Program (HELP), will provide in-kind support to collaborate on the program design, as this initiative aligns with Toronto’s goal to explore new third-party financing mechanisms for energy efficiency upgrades (Project description from original funding application)