Implementing a Clean Energy Improvement Program in the City of Leduc

The City of Leduc, an urban community located outside of Edmonton, is seeking to implement a Clean Energy Improvement Program (CEIP). This Property Assessed Clean Energy (PACE) program is supported by the province’s Bill 10: An Act to Enable Clean Energy Improvements (2018), which authorizes Alberta municipalities to utilize the municipal property tax system to finance energy efficiency and renewable energy improvements to residential and commercial properties. Homeowners can also repay the cost of their home energy projects over time through a CEIP charge added to their property tax bills. The city has secured a revolving line of credit to capitalize the program. Over the first four years of program implementation, the available line of credit for residential projects will be $1,025,700. The city has also partnered with the Alberta Municipal Services Corporation (AMSC), the program administrator for all CEIP initiatives in the province, to support program design, delivery (including application and payment processing) and performance monitoring. If successful, Leduc will be one of the first few municipalities in Alberta to implement a CEIP. The program will be available to homeowners with eligible properties, including detached, semi-detached, row and town houses, as well as multi-unit residential buildings of four stories or less. Participants can select from a variety of improvements, including solar photovoltaic systems and solar water-heating; air-source heat pumps; high-efficiency furnaces, boilers and lighting fixtures; home insulation; air sealing; sun-shading devices; and smart controls. To promote participation, the city will offer rebates for equipment upgrades, home energy evaluations and electric vehicle car chargers. Participants will also benefit from a dedicated CEIP webpage featuring program guidelines and educational materials, assistance from the city and AMSC staff, information sessions, and access to the AMSC’s Trade Ally Network of contractors. This program is supported by the city’s Municipal Development Plan (2020), which sets out to increase energy efficiency and reduce greenhouse gas emissions, and its Environmental Plan (2012), which recommends actions to partner with the Government of Alberta and supporting organizations to help offer incentives to residents to support their home energy improvements. Financing terms extended to homeowners: · Loan amount: The maximum loan amount is $50,000 per property. The anticipated average loan amount in the first year of implementation is $23,250 (excluding municipal rebates). · Loan terms and repayment: The maximum loan term is equal to the lesser of 25 years or the effective useful life (EUL) of the upgrades completed. For projects involving multiple upgrades with differing EULs, a weighted average based on each upgrade’s contribution to the project’s lifetime energy savings will be determined to establish a single EUL for the project. Participants may select a shorter term than the EUL, provided the annual payments towards their CEIP loans do not exceed their existing property tax payments. Participants can also pay their outstanding balances at any time without penalty. · Interest rates: A maximum rate of interest of 5% over the term of the CEIP loan will be offered. · Underwriting criteria: Participants must provide evidence of property ownership, property insurance, good standing on their tax payments, and, possibly, mortgage-lender consent and proof that they are current with their mortgage payments. · Additional fees or charges to participants: An administration fee of up to 5% of project costs may be charged and financed through the program. · Consumer protection measures: Participants must use certified NRCan Home Energy Evaluators. All contractors will be vetted by AMSC and must sign agreements on the CEIP code of conduct and terms and conditions. AMSC will conduct quality-assurance site visits on a percentage of completed projects. · Other: When negotiating the sale of the property, the CEIP can be paid off by the owner or transferred to the purchaser. Capital project financing will flow from the city to the AMSC to the contractor. After each project and post-retrofit home energy evaluation is complete, the AMSC will pay the contractor directly. Municipal rebates for equipment upgrades will be deducted from the total CEIP charge, reducing the loan principal. Environmental benefits: The program is anticipated to reduce energy usage by 4,218 GJ per year and greenhouse gas emissions by 600 tCO2e per year. Social and economic benefits: · Approximately $1.9 million in lifetime energy bill savings for program participants · The creation of 35 job-years through direct and indirect employment, and additional spending money in the economy · AMSC will onboard and provide CEIP training to contractors and NRCan-registered energy advisors · Improved housing affordability as homeowners will spend less on energy and maintenance costs · Increased home values through the adoption of high-efficiency and renewable-energy upgrades · Increased home comfort, including better air quality, humidity control, reduced noise levels and fewer cold-air drafts · Through their participation in home energy evaluations, homeowners will learn how to reduce energy usage in their homes · Marketing campaigns and informational events will increase community awareness of energy retrofits and conservation · Information packages will educate participants and their mortgage lenders on the program and its benefits Innovative aspect(s): · PACE financing is still relatively new to Alberta · The program uses measures and practices that are considered innovative for the community, and it represents a significant improvement over currently available alternatives · Support services offered to participating homeowners will further reduce greenhouse gas emissions and energy-operating costs, improve their homes’ resiliency to climate change and increase property value Replicability: · Under CEIP regulations, AMSC has a mandate for replication across Alberta; the partnership with AMSC makes this program highly replicable for other Alberta municipalities · The municipal collaboration group, established by AMSC, will be a key avenue for sharing details of the program with other Alberta municipalities and improving CEIP programs across the province · AMSC is also working with other PACE administrators across Canada, making replication of program elements more likely across Canada as well (Project description from original funding application)