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.
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.
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.
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.
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