It is easy to get stuck halfway through making your home energy efficient. You’ve done a home energy audit and you have finished the easy stuff, but some of these projects are not cheap — including installing new exterior doors, basement insulation or attic insulation. But energy efficiency financing is fundamentally different than taking a vacation or buying a car. Carrying out the energy efficiency project is going to save you money. In fact, over time, it is going to save you a lot more than what you spent. The problem is that the cost is a lump-sum up front while the savings trickle in over the long life of the upgrade.
Normally money you borrow counts against you, but shouldn’t having an energy efficient house count for you? An energy efficient house should appreciate more than one with a whopping power bill. In order to make our climate goals, we need massive changes in energy efficiency. Here are three options for financing energy: efficiency:
- Green loans through banks and credit unions
- On bill electric utility financing
- PACE: Property Assessed Clean Energy
Let’s look at green loans through banks and credit unions. Nationally the Royal Bank of Canada offers a RBC Energy Saver Loan. This loan is discounted – it has a rate 1% below than their normal loan rates. While neither Valley First or Prospera credit unions have a green loan program, if you live near Vancouver the Vancouver City Credit Union does. The Vancity Home Energy Loan finances energy efficiency renovations at prime + 1%. You can borrow between $3500-50,000 for up to 15 years. (Commercial and nonprofits can apply for a similar Vancity Eco-efficiency loan.)
If you live near Vancouver Vancity offers a Home Energy Loan at prime+1%
The second method of financing energy efficiency is “on bill financing”. This method makes a lot of sense: since the savings shows up on your power bill, the payment could be part of your power bill. The cost will be affordable because the total you pay each month is less than what you are currently paying. Who has access to on bill financing in the Okanagan?
From north to south, Revelstoke, Salmon Arm, Enderby, Armstrong, Vernon, and Lake Country are BC Hydro customers. BC Hydro is currently offering rebates but not financing.
Kelowna, West Bank, and Peachland are Fortis BC customers. Fortis BC customers can borrow up to $6500 at 1.5% interest for a heat pump (you have to choose between the loan or a rebate).
Summerland doesn’t offer any on bill financing but Penticton has an excellent program called Home Energy Loan Program (HELP). The maximum loan amount is $10,000, the rate is prime plus 0.5%, to be repaid over 10 years on your monthly electric utility bill. Unlike the Fortis BC program you can borrow to pay for insulation – it is not just limited to heat pumps.
Down south, Keremeos, OK Falls, Oliver, and Osoyoos are Fortis BC customers and can borrow to purchase a heat pump.
Penticton has an outstanding energy efficiency program that allows residents to borrow up to $10,000 at prime + 0.5% to be repaid over 10 years
The last type of financing shows the most promise: PACE financing. PACE stands for Property Assessed Clean Energy. PACE programs are better than green loans or on bill financing for two reasons: they borrow against the home and they follow the home when you sell.
How does PACE work? PACE allows you to borrow some or all of the costs of energy efficient upgrades and pay them back through your property tax bill over a period of 20-30 years. You may have noticed that the lowest interest rate available to you is a home mortgage. Why is this? Loans against homes are more secure than car loans or credit cards. You cannot drive off in a home and failing to pay a mortgage means you won’t have a place to live.
Banks have failed to create a path to add energy efficiency upgrades to mortgages, but there’s another route, more secure and therefore lower risk: your property taxes.
Not only are property taxes a secure form of loan, they have the distinct advantage of following the house, rather than following the loan-holder. Imagine you have completed an energy audit, invested in a new heat pump and installed solar panels on the roof. Then you find out you need to relocate to Toronto. If you pass these costs on directly to the new owners it will price your house out of the market. However, if these investments lower power bills every month, then passing on your funding and the upgrades can be done through property tax.
You can find more information on PACE funding in BC at https://www.pacebc.ca/
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Kristy Dyer has a background in art and physics and consulted for Silicon Valley clean energy firms before moving (happily!) to sunny Penticton. Comments to Kristy.Dyer+BP@gmail.com
Kristy’s articles are archived at teaspoonenergy.blogspot.com