Innovative financing mechanisms for efficient municipalities (FIME)

In partnership with the cities of Plessisville, Varennes and Verchères, the not-for-profit Plessisville industrial promotion committee plans to conduct a pilot project offering a financial mechanism along with personalized coaching services for residential energy retrofits. The Financement innovateur pour des Municipalités Efficaces (FIME), or the Innovative financing mechanism for efficient municipalities program, demonstrates the value of providing municipal funding for energy projects in Quebec and the rest of Canada. FIME is supported by the Association Québécoise pour la Maitrise de l’Énergie (AQME), participating cities, and other private and government organizations. It is based on the US Property Assessed Clean Energy (PACE) model, which has been adapted for the Quebec context. The pilot project identifies guaranteed residential energy efficiency solutions (e.g., heating, lighting and insulation) to be implemented via an investment attached to the property rather than the property owner. The project is therefore based on eight essential steps: - a preliminary evaluation of the property; - personalized coaching on energy retrofits; - submission of renovation plan by property owner to the city; - the city to provide property owner with a maximum amount of $20,000 in the form of a loan; - property owner follows through on the recommendations; - final assessment of energy savings; - questionnaire sent to property owner regarding the work undertaken (e.g., equipment installed, materials used and amounts invested); and - property owner repays loan through municipal property taxes. Repayment terms are based on the useful life of the applied measures (15 to 25 years). The proposed method will include an exchange of data between Natural Resources Canada’s Office of Energy Efficiency and Quebec’s Ministry of Energy and Natural Resources’ Bureau de l’Efficacité et de l’Innovation Énergétiques (BEIE). In addition, the pilot will link to existing programs (e.g., Rénoclimat and EnerGuide). FIME is also aligned with the municipalities’ sustainable development polices, such as Varennes’ action plan, Plessisville’s 2015 – 2025 strategic plan and Verchères’ urban plan. The repayment of the cost of energy-efficiency measures via property taxes facilitates access to financing for climate change mitigation. Based on the anticipated participation by residents, the project is expected to generate energy savings of 1,680 GJ (a reduction of approximately 30%). The average loan under FIME will be $10,000 per property, with a maximum amount of $20,000. Interim and final reports will be prepared to evaluate the project’s environmental results and outline the financial viability of the program on a large scale. The project is expected to lead to the development of similar projects that support the evaluation and implementation of measures aimed at reducing greenhouse gas emissions in the residential sector throughout the province. This project takes an innovative approach to financing combined with personalized coaching for the selection of energy efficient measures with significant environmental benefits. By linking the loan to properties and not the property owners, the municipality decreases the risk of default while increasing property values and municipal tax revenues. This project is the first of its kind in the province of Quebec, and is aimed at creating a precedent for the province and the rest of the country. (Project description from original funding application)