Roundtable airs ideas for greener Ottawa

Plan allows retrofit loans to be paid for on city tax bill

The next frontier in creating a greener Ottawa could be a plan that lets homeowners essentially take out a loan to improve energy efficiency and pay for it on their city tax bill.

The idea was aired by several speakers Saturday at a greenhouse gas roundtable at city hall.

The roundtable, which attracted municipal bureaucrats, consultants, community groups and the public, was aimed at refreshing Ottawa’s 2004 Air Quality and Climate Change Management Plan. The plan is out of date, and the city has failed to achieve targets on both a corporate and a community level.

“Not only are we going to set the goals, we are going to meet and exceed the goals,” Ottawa Mayor Jim Watson told participants.

Climate change can’t be addressed without solutions from the municipal sector, said Alex Wood, senior director of policy and markets at Sustainable Prosperity, a University of Ottawa-based green economics think tank.

“Later this year, the International Panel on Climate Change will release an update on the status of climate change. This report will tell us that the issue is more serious than ever,” said Wood.

He predicts the report from the respected international scientific panel will generate a call for action from the public.

Energy upgrade loans are known by various names, including Pay-as-You-Save and Property- Assessed Clean Energy, but most commonly as “Property Assessment Payments for Entry Retrofits,” or PAPER.

They have been introduced in the Yukon, Halifax, San Francisco and other California cities, and are being considered in Vancouver, Hamilton and Windsor.

Recent changes to Ontario provincial law had removed legal barriers that have existed in the past, said Wood.

PAPER works like this: Homeowners finance retrofits such as high-efficiency furnaces and energy-efficient windows with the city, with the goal of creating energy savings that exceed the cost of the retrofit. The loans are repaid through property taxes.

For homeowners, it’s appealing because the “loan” is attached to the home and not the homeowner, says sustainability consultant and Capital Ward Coun. David Chernushenko. When a house is sold, the new homeowner adopts the repayment.

A Toronto study showed that 82 per cent of homeowners paid for retrofits with cash or savings.

Chernushenko said homeowners are often hesitant to take on a loan to retrofit because they think they will move before they recoup their investments. Some homeowners shy away from adding to debt load, or argue that cosmetic improvements are a better investment because they pay back more when a house is up for sale.

There are other benefits to a program like PAPER. A municipally-funded program would help assure homeowners of the quality of the work and would also save homeowners money because of economies of scale.

In San Francisco, which introduced the program in April 2010, homeowners can borrow between $5,000 and $50,000, and have up to 20 years to repay the municipality. The project’s total budget was $150 million.

The PAPER concept is particularly popular in California, where the state has provided a grant that acts as a revolving loan fund, says Wood.

“The biggest impediment to getting retrofits is that people are worried about paying back the money,” he says.

“This is something Ottawa is in a position to adopt. It could be the next big step.”