Last week’s BC Federation of Labour convention kicked off with the announcement that the BC Fed’s No. 1 priority was job creation. The BC Liberals are saying the same thing. Finally, a political goal everyone agrees on!
Both groups would also probably agree that jobs are most desperately needed outside the Lower Mainland, where traditional sources of employment are shrinking.
All that only adds to the timeliness of new plans on the threshold to energize the home retrofit job market. This is an industry that can create jobs in every community in B.C. The colder the community, the stronger the business case. For every home that is retrofitted, the public costs of providing new energy infrastructure go down (think of new dams), so there’s a wider economic benefit in addition to the immediate jobs created.
Best of all, there’s a guaranteed return on the money invested if the work is done properly and homeowners don’t leave their windows open. All that’s needed are the financial tools to unlock the value in every leaky window and door.
Enter a new financing concept called PACE – property assessed clean energy (see At Large, “Revolutionary breakthrough in home energy retrofit financing applauded” – issue 1080; June 6-12). Pioneered in San Francisco, it’s a way for a homeowner to finance energy efficiency retrofits with long-term loans paid back through city property tax bills.
The key is that these loans are secured against the title on the property rather than the homeowner. Energy savings can be scaled to be more than the monthly payments, so the homeowner’s cash flow is improved.
The president of the BC Sustainable Energy Association, Guy Dauncey, calls this “incredibly significant, a huge breakthrough,” predicting it will be standard practice in cities everywhere in 20 years.
The City of Vancouver is expected to launch a 500-home PACE pilot project in January, following up on similar initiatives in California, Washington, D.C., and elsewhere.
Unfortunately, the U.S. programs got stuck in the starting gate when Fannie Mae and Freddie Mac, the two quasi-government mortgage backers feeding on bailout billions, torpedoed PACE in California, prompting the state to sue the federal agencies. Fannie and Freddie don’t want PACE loans to get top priority if homeowners default on their mortgages.
Also on the drawing board here is a Green Landlords joint project with the city, BC Apartment Managers and Owners Association, the BC Sustainable Energy Association, BC Hydro and Terasen that will use a similar approach to retrofit 10 apartment buildings. Once they figure that out, commercial buildings will be next.
The relatively low amount of the loans, between $8,000 and $15,000 for basic energy retrofits, is a small portion of the value of most homes in the province.
What’s still being worked out is how to make this program seamless and simple for homeowners. The city is looking for some organization that can work with homeowners, contractors and financial institutions to co-ordinate the initial energy audit, baseline energy data, the retrofit work, inspections, calculations of savings and payments back to the lending agency.
To be successful, a PACE program has to be aligned with parallel initiatives like the LiveSmart BC: Efficiency Incentive Program, which provides provincial financial support to households for energy assessments and its own list of acceptable energy efficiency building retrofits in partnership with Terasen Gas, BC Hydro, and FortisBC.
Ironically, Metro Vancouver’s green-ness mutes the benefits of PACE.
The mild weather that keeps us green all year – as well as our cheap electricity rates – lowers savings, lengthening payback times.
The good news is that if Vancouver can make it work, it can be rolled out across the province where the weather is more extreme, and where new jobs are most desperately needed. We’re very close.