Guelph CIty Council is excited about a potential new program that would allow property owners to borrow money for energy efficient retrofits and then have that loan attached to the property rather than the borrower.
Called Property Assessed Clean Energy (PACE), it sees the loan, plus interest, paid back through the property taxes on the building.
If the building is sold, the loan is also transferred to the new property owner.
One of the attractive elements to the city is that the funding for the program would be supplied through private investors, not the City of Guelph.
“Effectively, the municipality acts as the billing and collections provider,” Our Energy Guelph’s presentation to Guelph City Council at Monday’s Committee of the Whole meeting.
“We’re removing the city as the bank from the equation,” said coun. Dan Gibson, joining others around the horseshoe in praising the concept Monday.
Council unanimously supported a motion that directed city staff to report back with a recommendation regarding the city’s role in the proposed program later this year.
“I honestly hope that we can get the report from our staff done as quickly as possible and I hope that it reports that we are good to go from council’s end,” Mayor Cam Guthrie said.
“My goodness, I hope that this really comes together for everybody and the city as a whole.”
Our Energy Guelph is a community-based not-for-profit that morphed out of a city task force aimed at using less energy and producing fewer greenhouse gases.
While not a City of Guelph entity, it is acknowledged as the “implementer” of the city’s community energy initiative.
Alex Chapman, executive director of Our Energy Guelph, said the program has been very successful in the United States, particularly in California, where it originated.
Chapman said there has been $6.7 billion “mobilized” south of the border,, mostly in California.
“The unique benefit of having the loan moved to the next property owner in the event of sale. This happens in about 50 per cent of sales,” Chapman said.
The property owner reaps the rewards of the energy savings from energy retrofits.
The program, Chapman said, removes the biggest barrier to retrofit, which is capital outlay.
The plan initially would focus on getting multi-residential buildings to sign up.
“If we focus on large-dollar properties … we could potentially avoid some of the game-changing problems” such as administration costs, until the program is up and running on a larger scale.
Under the program the property owner would still select their own contractor to do the work.
“It works. There is a significant track record,” Chapman said, pointing out that homes that have retrofits as part of PACE programs are less likely to see a default on property taxes.
Our Energy Guelph’s next step would be to start seeking potential investors for the program.
The city’s finance department said it has been talking with Our Energy Guelph about this for the last couple of months.
They also said that the Association of Municipalities of Ontario is looking at potentially doing something similar on a provincial basis.
City treasurer Tara Baker noted that PACE is “far more palatable” in terms of risk to the city and not affecting the city’s credit rating because it won’t be at risk for the loans.
The city would be reimbursed for administration costs.