Special Report: Climate Change

Climate Change, Rising Energy Prices, and the LIC Solution

Local improvement charges is a financing program that can help us use less energy without compromising our budget, while making our homes more comfortable.

By Joy Liu
Published July 10, 2014

Our hot, humid summers and cold, condemning winters are taking it out on Hamilton's homes-and homeowners' wallets. Older houses especially are always either too hot or too cold, and rarely just right.

These should be struggles of the past! After all, modern technology allows for energy efficiency upgrades to make your old home serve you like new, and contribute less to greenhouse gas emissions.

But meaningful energy efficiency retrofits often have daunting upfront costs. You can't even be sure if it will save you energy or money. So what other options do we have?

Hamilton's residential sector is responsible for 28% of our energy consumption, higher than the provincial average at 24% (Canadian Urban Institute, 2011). The easiest way to lower our high energy use in the residential sector is conservation.

There is a solution that has been proven to work in other progressive cities to lower consumption, and the home owner's utility bills. The idea is the use of local improvement charges, or LICs.

What are local improvement charges?

LICs are long term loans backed by the local government at low interest rates, to finance energy efficiency, and sometimes renewable energy projects. The selling point is that the loan does not affect the owner's personal debt load.

After the construction work is done, the charge is added to the owner's property tax bill and stays with the property should the owner sell it before the LIC is paid off.

The costs of the retrofit are often offset by savings on energy bills. Owners are also left with a more comfortable and higher value home.

Green Venture, a non-profit, community-based organization advocating for sustainability, calculated savings for a hypothetical insulation project for a house in Hamilton:

Savings are calculated assuming that natural gas costs 45 cents per cubic meter, which is what it will likely rise to in a few years. Energy rates are also increasing faster than average wage increases and insulation costs.

If homeowners use LICs to fund their energy conservation project, they may never lose money, even during the payback period.

Working Examples

Typical existing LIC programs offer terms up to 15 years for single-family homes, at interest rates ranging around 3-4%. Toronto has already implemented an LIC pilot program called the Home Energy Loan Program (HELP).

HELP offers 5 to 15 year terms with interest rates from 2.5% - 4.25%. It covers projects from insulation to high efficiency heating/cooling systems and even water saving projects such as toilet replacements.

Other LIC programs such as Solar City in Halifax focus on simplicity; the program there specializes in offering solar water heater installations.

In all cases, experienced energy auditors perform an audit on your home. This procedure helps you make an informed decision on the most cost effective and worthwhile energy retrofit tailored to your home's unique characteristics.

Hamilton does not yet have an energy LIC program in place, but we do have an initiative for home lead pipe replacements that follows the same model. City department officials have already started to investigate the potential for an extensive LIC program that includes energy retrofits.

However, the City needs to see that there is public interest and support in the program before they implement it. Environment Hamilton (EH) and the Hamilton Association for Renewable Energy (HARE) are working together to raise community awareness about the energy conservation and renewable energy potential of an LIC initiative and the huge financial benefits such a program could bring to Hamilton homeowners.

We need your support!

If you think this would benefit you and our city, call your ward councillor and show your support for such a program!

If you want more information, EH and the HARE will be holding an information session on July 16, 7pm, at Laidlaw Memorial United Church (155 Ottawa St. N).

You can also get more information on LICs on our blog.

Joy Liu is a Hamiltonian studying environmental engineering at UWaterloo. She is working as a summer intern at Environment Hamilton working on gaining public support for local improvement charges.


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By Yes (anonymous) | Posted July 10, 2014 at 10:50:48

To slow down climate change, governments need to support LIC's and LRTs!

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By DowntownInHamilton (registered) | Posted July 10, 2014 at 11:56:59

The article appears to be posted twice on the "recent articles" section. Might want to remove the duplicate entry :)

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By JOEY (anonymous) | Posted July 10, 2014 at 12:47:27

I swapped out all of my lights to CFL, installed low flush toilets, put aerators on the faucets. this reduced my consumption of electricity and water. Others did the same, the result was lower usage and the utilities raised the rates to make up for the difference. After spending money to reduce my energy costs they increased. therefore we learned not to conserve.

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By jliu (registered) | Posted July 10, 2014 at 13:01:06 in reply to Comment 103158

Hi Joey, sorry to hear that happened. Unfortunately energy rates are going up, whether someone does energy conservation projects to their home or not. Correct me if I'm wrong, but doesn't that mean that the people who did not do anything to conserve will be paying more, rather than just paying the same amount?

Either way, we know Hamilton has an old housing stock that could use some retrofitting, and if it's a worthwhile project an auditor recommends, I think it will have a huge potential to save money, not to mention all the energy it won't be wasting! And all the carbon that won't be produced.

It would also be nice for LICs to be used not only for conservation projects, but house-scale renewable energy projects too eh?

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By JOEY (anonymous) | Posted July 10, 2014 at 15:05:38 in reply to Comment 103161

What I mean is if we conserve energy companies will increase what they charge in order to maintain their profits. Therefore if we conserve it cost us more. Its stupid by there it is.

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By AnjoMan (registered) | Posted July 10, 2014 at 15:49:10 in reply to Comment 103164

That doesn't really make sense, because energy companies also save money when you use less power (since they don't have to produce it).

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By Noted (anonymous) | Posted July 10, 2014 at 17:31:54 in reply to Comment 103166


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By DowntownInHamilton (registered) | Posted July 10, 2014 at 20:00:29 in reply to Comment 103166

It totally makes sense. An idle power plant still costs money to sit idle. Transmission lines, infrastructure, the cost of building upkeep, taxes, security... all those things continue to accrue even if there is no use. Kind of like what happened at Hilton Works, till they finally pulled the plug.

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By scrap (anonymous) | Posted July 12, 2014 at 23:08:56

Sorry but this article does not go to the root causes.
All I ever seen from green venture and environment Hamilton is little bandaid solutions.

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By Capitalist (anonymous) | Posted July 17, 2014 at 14:44:30

Ahh climate change, don't you mean global warming? or was it global cooling back in the 70s?

Wasn't the environment supposed to be destroyed by the year 2000? Please enviros tell me when the world is going to end?

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By Pxtl (registered) - website | Posted July 17, 2014 at 15:34:06 in reply to Comment 103259

Don't you ever get tired of posting the same things over and over again and then completely ignoring the responses that explain to you in obscene detail all the ways that you're wrong? Seriously you're trotting out the "global cooling back in the 70s"? That's been more thoroughly debunked than Lemuria and Luminiferous aether.

And you already know that.

You just don't care about what's actually true, as long as it fits your narrative.

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By Capitalist (anonymous) | Posted July 18, 2014 at 10:21:02 in reply to Comment 103260

Global cooling debunked? Well if we were back in the 70's you enviros would be falling all over that prediction. All doomster scientists like Paul Ehrlich believed in global cooling. So why should anybody believe the enviros when they now say the world is warming up when just 40 years ago they predicted cooling?

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