Financial incentives for home energy upgrades recommended for 2016 Ontario budget

The written submission given to the 2016 Ontario Budget Consultation as part of a presentation by Mary Jane Patterson, Executive Director of REEP Green Solutions held at Kitchener City Hall on February 3, 2016.

You can learn more about current financial incentives for home energy upgrades such as the Union Gas Home Reno Rebate program on other pages of our website.

REEP Green Solutions is an environmental charity that helps people live sustainably. Our current focus is on home energy efficiency and managing storm water.

We are recommending two items for Ontario’s budget that will create jobs and stimulate the economy.

  1. A home energy efficiency incentive to financially reward homeowners who make their homes more energy efficient.
  2. Universal Home Energy Labelling – requiring an energy rating on a home at the time of sale.

I have been with REEP Green Solutions since shortly after it was founded in 1999 to conduct home energy evaluations as a local response to Canada’s obligations under the Kyoto Protocol.  Seventeen years and 14,000 home evaluations later we have made an impact, but much more work needs to be done.

We know that right now most homes are contributing to climate change.  All of them need to be a part of the solution if we are to keep an increase to the earth’s temperature to less than 2 degrees as Canada agreed to in Paris.

According to an inventory undertaken for ClimateActionWR (our local climate action plan), 22% of Waterloo Region’s greenhouse gas emissions are from energy consumption in our homes. Reducing those emissions is essential if Waterloo Region, one of the provinces largest urban areas, is to help the province fulfill its climate change commitments.

Together with our ClimateActionWR partners, we have a plan to reduce our region’s greenhouse gas emissions, including those from our homes. We have set a goal of lowering greenhouse gas emissions to 6% below 2010 levels by 2020. The plan recently received national recognition when the Federation of Canadian Municipalities announced it has won a Sustainable Communities Award.

Turning the plan into action is the tough part, but some key investments from the province can spur action.

When we started performing home energy evaluations, people loved the individualized recommendations for their home. But when we went back a year later, nobody had acted on them. Everyone had great intentions. No one had done anything.

Four years later, we saw what a difference it made when the government created financial incentives to encourage people to implement the recommendations in their home audit. Participation soared.  We estimate that participants who implemented some or all of our recommendations are now saving 26,000 tonnes of greenhouse gas emissions annually through their home energy upgrades.

Now, however, home energy evaluations have stalled without incentives or other supports from the provincial or federal government. At the height of the performance-based EcoEnergy incentives, we evaluated up to 1500 homes a year. That means we used to do 100 or more home energy evaluations every month. Now we do not even do that many in a year.

We request that Ontario implement a home energy retrofit incentive program, verified by independent third party professional energy audits.

We ask that it be for all Ontarians, including those served by a locally owned natural gas utility, as we have in Kitchener, and those who use heating fuels other than natural gas.

We recommend incentives rather than tax credits or financing. Homeowners see quickly receiving a cheque as a real reward for their efforts. A tax credit that only reduces a homeowner’s payable income tax is not perceived as an incentive and will not prompt action.

An audit is necessary because it helps homeowners to prioritize cost-effective, high-impact investments, it verifies the results and it avoids fraud.

Every home renovation that improves energy efficiency stimulates our local economy.  Over the last several years, homeowners we have worked with have spent on average $9,000 per retrofit. We estimate that since the beginning of the first incentive program, our participants’ home renovations have contributed over $40 million to the local economy through the purchase of materials and labour. Across Ontario, that spending was estimated at $1 billion/year. Most importantly, that’s spending that creates jobs in Waterloo Region and across Ontario.

An incentive program will have an even greater impact as the province considers requiring that potential buyers are informed of a home’s energy rating when it is being sold. We expect Universal Home Energy Labelling to encourage people who are selling a house to improve its rating and increase its value before putting it on the market. We also anticipate that people buying houses with lower ratings will be interested in renovating before they move in, to lower its energy costs and make it more comfortable.

When combined with an incentive program, a requirement to share a home’s energy rating at the time of sale makes home improvements prior to a sale or shortly afterwards more likely. The combination is powerful as it multiplies both the reduction of greenhouse gases and the economic impact that are expected from incentives alone.

If the province is interested in a pilot program to confirm the return it can get on its investment in renovations to improve energy efficiency, REEP Green Solutions and Waterloo Region are ready. We have both the experience and the plan (ClimateActionWR).

We look forward to working with the province of Ontario to meet its climate change commitments and to create local jobs and stimulate the economy.

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