Piloting Property-Assessed Financing for Home Energy Retrofits

The District of Saanich will implement a three-year pilot project that uses a property-assessed financing model to support energy efficiency upgrades in 50 homes. Saanich will provide zero-interest financing of up to $12,000 per home, to be repaid over 10 years, to replace oil-heating systems with air source heat pumps. The project aims to help lower-income households reduce their energy bills and greenhouse gas (GHG) emissions. It also aims to showcase the use of this innovative financing tool to support a case for provincial legislative amendments that would enable more municipalities to offer such programs. This project aligns with Saanich’s goals of becoming a 100% renewable energy community and achieving net-zero GHG emissions by 2050. Innovative aspects • Retrofit programs available in B.C. are generally based on a rebate model, where homeowners undertake an energy retrofit and are later reimbursed for a portion of the expense. This can prohibit participation for many households. The approach being piloted provides zero-interest financing for some or all of the upfront costs of the retrofit, which homeowners pay back along with their property taxes. It is anticipated that repayment will be offset by reduced household energy costs. • Property-assessed financing means the debt will be tied to the property, as opposed to the individual. • The pilot is designed to simplify the process and decision-points for homeowners. For example, a pre-approved list of contractors will be provided to them. This will ensure the program is easy to navigate and minimizes administration for the homeowner, reducing a significant barrier to participation. • As the financing for the retrofits is repaid to Saanich, there is an opportunity to establish a revolving green fund where money can be made available to new participants and will then be repaid over time, creating a sustainable financing model. Replicability Saanich and surrounding communities have a high proportion of oil tanks, creating a strong business case for replication in the region. Saanich is open to sharing lessons learned and key documents such as homeowner agreements, model bylaws and communications materials with other local governments. Environmental benefits Key anticipated benefits include: • 97% reduction in GHG emissions from home heating in participating homes. The program is expected to directly reduce GHG emissions by 350 tCO2e per year for the 50 homes, with 7,000 tonnes of emissions reduced over the lifetime of the equipment. • 45% reduction in total building energy use from participating homes. On average, participating homes are expected to achieve a 72 GJ reduction in energy use. Saanich will verify GHG and energy reductions through energy evaluations conducted before and after the upgrades, and will provide an EnerGuide Rating System label for each home. • A reduction in the risk of furnace-related oil spills in the community. Economic benefits • If Saanich adopts the program after the pilot period, the estimated ongoing cost to administer it (excluding the financing dollars, which will be repaid) will be about $12/tCO2e. This compares with the BC Carbon Tax which will be $50/tCO2e by 2021. • Energy costs will be reduced by an estimated $180 per month per household, which means homeowners will be able to increase discretionary spending that supports local businesses (whereas energy-related spending is money that generally leaves the community). • Replacing oil-heating systems, thereby reducing the risk of oil spills, reduces financial risk for both Saanich and homeowners. Social benefits • Compared to oil furnaces, heat pumps deliver consistent, comfortable home temperatures and improved air quality. • Energy evaluations and communications materials will help homeowners learn about low-carbon home improvements and increase their overall energy literacy. (Project description from original funding application)