In pursuit of ambitious emission reduction targets, cities across Canada and the United States are offering residents and businesses low-interest loans to cover the upfront costs of energy efficiency upgrades like heat pumps, solar panels, and insulation.
Repayment installments show up as a small surcharge on property tax bills over a lengthy period, reports CBC News.
For a homeowner like Mike Campbell in Charlottetown, Prince Edward Island, the funding mechanism helped make the decision to replace an old oil boiler with an air-source heat pump “a no-brainer.”
Campbell got a zero-interest loan through Switch Charlottetown, a program administered on behalf of the municipality by Property Assessed Clean Energy (PACE) Atlantic. He will repay the amount over 10 years through his property tax bill, and since loan is attached to the property itself, he can transfer it to the new owner of his property if he decides to sell and move.
Previously, Campbell had been paying heating oil bills as high as C$1,000 per month. He will now only pay a small fraction of that amount, $82 per month, for the next decade.
Green loan programs like Switch Charlottetown’s were initially referred to as Property Assessed Clean Energy programs, explains CBC, but they now go by various other names in a trend that is gaining momentum across North America. Several organizations like PACE Atlantic now help residents obtain retrofit grants and connect them with contractors, who in turn gain customers. Assured that they will be paid upfront, more than 80 contractors are involved in PACE Atlantic programs, with almost 400 new jobs generated, writes CBC.
But the other big win is for climate goals. Households retrofitted under PACE Atlantic’s programs have cut their greenhouse gas emissions by an average of 45% or 5.72 tonnes per year, estimates the organization’s president, Julian Boyle. “This is kind of the scale that we need to get to, to head towards net-zero,” Boyle said.
Such programs will be crucial in the drive for all of Canada to decarbonize, said Jessica McIlroy, senior buildings analyst at the Pembina Institute, noting that 80% of Canada’s 2050 building stock has already been built.
Green Loans Across North America
CBC says Alberta leads the pack on PACE-like initiatives with its Clean Energy Improvement Program running in 11 municipalities, including Edmonton and Calgary.
In Ontario, Toronto’s $10-million Home Energy Loan Program (HELP) has been going strong since 2014. Ottawa has had one in place since 2021, and last month, Guelph launched its Greener Homes Program with zero-interest loans of up to $50,000 for qualifying residents.
Likewise named HELP, Saskatoon’s low-interest retrofit loans program has been running since 2021.
While British Columbia has not yet adopted legislation to officially enable PACE-like programs, several cities have them on the books, including Nelson, where the On-Bill Financing Program lets homeowners borrow up to $16,000 for energy and water efficiency upgrades, reports Energy Hub. “Loans are approved based purely on payment history and property verification—no personal income or credit information is needed.” Penticton also offers on-bill financing to a maximum of $10,000, to be paid back over 10 years.
Launched in October 2022, Yukon’s Better Buildings program offers up to $50,000 in low-interest green retrofit loans to homeowners, and up to $100,000 for commercial building owners throughout the territory, with participants repaying the loans via local improvement charges that are added to their annual property tax bills.
Yukon’s assistance to commercial building owners is a variant of the C-PACE (Commercial Property Assessed Clean Energy) programs now gaining traction in many American cities, including Atlanta, Cincinnati, Dallas, Kansas City, and Orlando.
PACE Atlantic itself runs two programs in PEI, two more in Nova Scotia, and “plans to launch programs in three more Nova Scotia communities later this year,” writes CBC. The organization’s current rota of 1,100 participants represents 2-5% of local homes per year, with participating municipalities reporting zero default or delinquency in payments from homeowners. Boyle said the average payback on homeowners’ investments is less than 5.5 years.
Hugely popular, many of the programs have wait lists.