St. Albert’s proposed Clean Energy Improvement bylaw has two out of the three elements it needs to address the problem of buildings and global heating, analysts reached by the Gazette say. But it’s missing the big one: money.
St. Albert city council tabled a draft bylaw April 19 that, if passed, would create a $5 million residential Clean Energy Improvement Program (CEIP) pilot that could roll out as early as this year. City residents will get to speak on the law at a public hearing May 17.
CEIP is Alberta’s version of Property Assessed Clean Energy (PACE) – a financial tool meant to help people pay for upgrades to their properties in order to save energy and address global heating.
It’s a tool sorely needed in St. Albert. The city is on track to miss its 2020 community greenhouse gas reduction target and is light-years away from reaching net-zero emissions by 2050 as called for by the Paris Agreement. St. Albert will have to make significant upgrades to its buildings if it wants to reach these environmental goals, as some 60 per cent of its community carbon footprint is linked to buildings.
Most modern buildings have plenty of room to improve when it comes to energy efficiency, said Cisco DeVries, CEO of California’s OhmConnect and the inventor of PACE. The problem is most of those improvements have high up-front costs that deter people from making them.
PACE solves this problem by letting owners make home improvements for no money down, with the costs of the improvements paid for over many years through a tax levy. Thirty-six American states and about 11 Canadian cities now have PACE programs in operation. U.S. PACE programs have prevented 7.4 megatonnes of emissions and sparked about $16 billion in economic output since their establishment, PACENation reports.
Three to succeed
DeVries said successful PACE programs need three elements: simplicity, protection and scalability.
Simplicity means the program is easy to use when people need it, DeVries said. If a person’s furnace breaks, they need a replacement fast and don’t have time to research technologies or carbon footprints. A good PACE program accounts for this by having online applications, fast approvals and skilled contractors able to teach clients about energy efficiency and walk them through the program.
St. Albert’s proposed pilot, as described in the city's 2021 CEIP market study, does seem simple: you apply, get an energy audit, hire an approved contractor to do your upgrades and pay for them through a tax levy. The study also suggests skipping the audit in some situations (such as emergency replacements or solar panel installations), which could make the process even simpler.
Simplicity has to be balanced with consumer protection, DeVries said. Residents need to be confident the upgrades they get through PACE will actually pay off before they will agree to do them.
St. Albert’s proposed program includes energy audits, which outline the cost and benefits of any proposed improvement, and a requirement for participants to only use certified contractors from an approved list, both of which should shield homeowners from fraud.
St. Albert could boost its consumer protections by publishing guides on common energy efficiency upgrades as the City of Edmonton does through its Change for Climate program. Kevin Boutilier, the clean energy specialist for Halifax’s PACE program (Solar City), advised having a dedicated team available to give residents trustworthy information about PACE and the upgrades they can fund through it.
Scalability is about cash.
“You need to make sure you have a program that’s built to last,” DeVries said, and that means having a ready supply of money behind it.
And you need a whole lot of money. Leigh Bond of the pro-PACE group PACE Alberta has pegged the cost to retrofit St. Albert’s buildings to net-zero standards at about $1 billion based on data from U.S. PACE programs. Likewise, Madi Kennedy of the Pembina Institute has estimated the investment needed to bring all of Canada’s homes to net-zero by 2050 at $13 billion a year.
“People just don’t understand how much money we need ... to hit our target of net-zero by 2050,” Bond said.
St. Albert’s draft bylaw falls short on this front. The draft caps expenditures at $5 million over four years, and restricts them to just residential buildings. The 2021 market study found this would be enough to retrofit 254 homes – just one per cent of the city’s residential building stock.
Bond said there’s no way cities can muster the money needed for wide-scale PACE use on their own. Add private investors and the limitless money of financial markets into the equation, though, and you have all the capital you need. American PACE programs are open to private investors, which is why they’re growing by about 150 per cent a year.
Alberta’s CEIP legislation currently requires all PACE money to come from cities. St. Albert’s draft bylaw can’t change this, but city council could, and should, lobby the province to change its laws to let private money into PACE.
More silver bullets
PACE is just one of several policies cities need to drive down carbon emissions from buildings, Kennedy said. Incentives, carbon taxes, stricter building codes, and home energy efficiency labels all help push property owners to invest in energy efficiency – investments PACE makes easier to make.
“Most of the buildings standing today will still be standing in 2040 and 2050,” Kennedy said, and all of them will need significant upgrades to address global heating.
PACE also acts as an economic boon to cities, with the proposed St. Albert residential pilot projected to add about $17 million to this city’s economy. Halifax had about four solar contractors back when its PACE program started in 2013, Boutilier said – now, it has about 60.
“This is a huge opportunity for the tradespeople,” he said.
St. Albert’s draft CEIP bylaw has some flaws, but with a few tweaks and a whole lot more money, it could help get the city back on track when it comes to climate change.