Designing a Residential Deep Energy Efficiency Retrofit (R-DEER) financing program in the City of Windsor

The City of Windsor will undertake a program design study to develop a Residential Deep Energy Efficiency Retrofit (R-DEER) program to provide financing for home energy retrofits. This initiative builds on the city’s R-DEER Business Case (2019) and is strongly supported by Windsor’s Climate Change Emergency Declaration (2019) and Community Energy Plan (2017). The latter highlights this program as a key strategy to achieving per capita energy use and greenhouse gas emissions reductions of 40% below 2014 levels by 2041. The city will undertake most of the study and will employ external market research, energy, financial and legal consultants to administer a homeowner survey, model environmental benefits, and consult on the financial and legal elements of the program design. The study aims to achieve the following: 1. Engage landlords, energy advisors, contractors, manufacturers, utilities, financial institutions, third-party program administrators and the public to ensure the program design addresses stakeholder needs 2. Finalize the program details and delivery model, as well as the forecasted participation, cost savings, capital budgets, and operating budgets 3. Evaluate the creation of a municipal service corporation to administer the program and its potential structures (municipally-owned, third-party, utility partnership, etc.) 4. Evaluate available financing models (PACE, utility on-bill and third-party lender) and recommend a preferred option In line with the city’s target of retrofitting 80% of homes by 2041, the program aims to support 51,750 retrofits over its 20-year duration. It will be designed to allow for a gradual ramp up of participation, starting with 325 homes per year and increasing to 2,500 homes per year by 2041. If achieved, by 2041 the annual energy and greenhouse gas emissions reductions will be approximately 131,906 GJ/year and 4,942 tCO2e/year, respectively. Community benefits include improved home comfort and occupant health, neighbourhood revitalization, and, potentially, low-income retrofit subsidies to address energy poverty and encourage participation from low-income neighbourhoods. Economic benefits include a total projected $883 million investment in home energy retrofits by 2041, which will support local development of the home energy retrofit sector. Moreover, much of the anticipated home energy cost savings ($383 million by 2041) will be re-invested in the local community. Innovative aspects: · The study will evaluate options to establish a municipal service corporation to administer the program and deliver turnkey retrofits. This would facilitate a more entrepreneurial approach and reduce the city’s liability and financial risk. · The study will also look at developing standardized energy retrofit packages based on home archetypes (defined by age, size, and type). These would be designed to deliver 30–50% energy savings and 20% water savings. Using retrofit packages would facilitate quality control, reduce retrofit costs by about a third, and encourage homeowner, contractor, and third-party lender participation. Replicability: · The study will explore three different financing models, evaluate the establishment of a municipal service corporation and develop an online homeowner engagement tool to program design. Other municipalities would likely be interested in these aspects of the study. · Windsor will share knowledge and lessons learned with other municipalities, including Newmarket, Burlington and Oakville, who are also exploring standardized retrofit packages. This may present an opportunity for partnership. (Project description from original funding application)