Home Energy Loan Program Lessons & Advice CUSP Webinar - - PowerPoint PPT Presentation

Home Energy Loan Program

Lessons & Advice CUSP Webinar October 9, 2019

Marco Iacampo Environment & Energy City of Toronto

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GGHG reduction

Toronto’s Climate Action Strategy

8 0 %

2050

X

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Mind the 9 MT Gap

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TransformTO Goals

• Regulation enables the assessment
• f special charges on benefitting

properties for energy and water improvements

• Exclusive to municipalities
• Loan is not a personal debt, attached

to property, transfers at time of sale

• Repaid via surcharge on property tax

bill

• Priority lien status  High-level of

security

Local Improvement Charges

Participation & Uptake to date

Since 2014

Home Energy Loan Program

Applications 944 Completed Projects 203 Average Loan Value $20,000 Total Capital Expenditure $4.5 million

Lessons Learned Key Considerations

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One-window service adds value

80% of participants would recommend HELP to family and friends

• Simplified pathway to completing a home energy retrofit
• Stacking of complementary incentives and grants
• Promotes all available energy and water conservation, and more
• Customer-focused program is critical
• Streamline to avoid process disconnects/duplication
• Compliance with local regulations may frustrate an ‘ideal’

administration

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Lesson Learned Key Consideration

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Continuous program enhancement

Regular updates to program offering is critical to address market needs Increased max loan amount, initial disbursement and eligible measures resulting in a doubling of applications

• Regular dialogue with program stakeholders and participants to

understand pain points and emerging needs

• Build-in flexibility into program by-law, ideally without having to

seek City Council resolution

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Lesson Learned Key Consideration

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Low volume of projects undertaken

1 in 4 applicants complete a home energy retrofit and access financing Half of homeowners with a mortgage drop out

• Mortgage lender consent, mandatory EnerGuide pre/post assessment,

contract, invoice submittals are all required of a participant.

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Lesson Learned Key Consideration

• Greater volume can be achieved with less requirements
• Understand the market segment you are trying to serve and tailor

your marketing and outreach accordingly

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High quality, deep retrofits completed

HELP enables deep, multi-measure retrofits that encouraged homeowners to do more, sooner

• Average of 64 GJ of energy savings per project, $560 in energy savings

HELP outperforms typical EnerGuide results (44GJ)

• Longer term payback measures (e.g. windows)
• 7-8 months to complete renovations

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Lesson Learned Key Consideration

• Offer options for matching payment term to asset useful life
• Extend financing to also support non-energy improvements (i.e.

demolition, environmental remediation)

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EnerGuide Home Rating System

• Standardized home energy assessment works
• Provides a robust M&V data set for results reporting
• Support from NR Can (e.g. audits) is appreciated
• Don’t reinvent the wheel!
• Homeowners find high value in pre/post assessment and

consultation with energy advisor

• De-risks capital deployed to energy efficiency improvements

Lesson Learned Key Consideration

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Achieving a cost-neutral administration is tricky

‘User-pay’ model is attractive to garnering support from senior management and City Council

• Administrative charge (2% of capital) was insufficient in generating

enough revenues to cover program costs

• Unsure participants ‘sensitivity’ to higher pricing
• Understand fixed and variable costs and set an appropriate

administrative charge to recover those expenditures

Lesson Learned Key Consideration

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Soup-to-nuts delivery model is labour intensive

All aspects of program delivery - marketing and promotions, applications processing, contracting, tax assessments - are managed by City staff

• City staff across 5 Divisions have an administration role
• City maintains control and oversight

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Lesson Learned Key Consideration

• Minimum role for a municipality involves passing property-

specific by-laws to impose the local improvement charge and tax billings

• Consider the role of a delivery agent and channel partners to

manage elements of program implementation

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Sustainable capital funding source

Utilized a $10 million reserve fund for initial funding tranche

• long term solution that is scalable and flexible is needed to re-capitalize HELP

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Lesson Learned Key Consideration

• Green bond issuances, revolving funds, FCM’s Green Municipal

Fund, infrastructure banks are potential sources of capital

• Consider approaches that crowd-in private capital
• Conscious of municipal debt limit and credit rating

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Getting the marketing and promotions right

Community-based approaches are effective, but difficult to maintain ongoing momentum

• City Councillors and gas utility most effective channels
• Digital media more effective than traditional
• Contractor engagement and training workshops
• Modest budgets and lack of expertise

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Lesson Learned Key Consideration

• Leverage channel partners for promotions: contractors, utility

companies, equipment manufacturers, community groups

• Geo-target a neighbourhood primed for action (i.e. homes using
• il for space heating).

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Financing Alone is not a Silver Bullet

A low-interest, longer pay back loan is not a enough to compel action

• A more supportive regulatory context is needed, with enabling strategies

such as: Home energy reporting and disclosure, mandatory energy/ carbon intensity standards, carbon price on fossil fuels

• What additional carrots and sticks can transform the market and

drive scale-up?

• Building energy literacy with homeowners is an important first

step

Lesson Learned Key Consideration

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Helpful Resources

https://www.cleanairpartnership.org/projects/cheerio/

• LIC Primers and FAQs
• Legal Opinion
• Program Design Guidance
• M&V Framework

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Thank You Merci

Marco Iacampo

Program Manager Environment & Energy City of Toronto Marco.Iacampo@toronto.ca