Ontario’s Green Investment Fund is committing $325 million to projects that will reduce emissions, grow the economy and create jobs. In recent weeks, four major announcements have focussed on amping up investment in energy retrofits of homes and social housing, proliferating electric vehicles, and sparking clean tech innovation. Investment in energy efficiency is laudable and essential to reaching our GHG reduction targets, but attention to financial design, accountability and long-term certainty is also needed to maximize value.
Home Energy Retrofits – $100 million
Billed as an interim program, funding will flow through Enbridge Gas Distribution and Union Gas to help about 37,000 homeowners conduct audits to identify energy-saving opportunities and then complete retrofits. Efficiency retrofits, such as replacing furnaces, water heaters and upgrading insulation can save natural gas consumers money on their energy bills. Historically, every dollar invested in natural gas efficiency has resulted in $1.50 to $4 in savings for natural gas consumers. Toronto’s Home Energy Loan Program (HELP) which is sponsored by TAF and won an FCM Sustainable Communities Award this month, can help Toronto homeowners cover the balance of the retrofit costs. Program details including program start date, eligible project details and amounts have not been established, and should include alignment with gas conservation guidelines and accountability established by the Ontario Energy Board.
Making Electric Vehicles More Affordable – $40 million
Right now there are only about 5800 electric vehicles (EVs) in Ontario. That has to change given that transportation emissions are the biggest source of GHGs in the province, accounting for 35% of the total. A previous incentive supported the purchase of 4,800 electric vehicles and about 1,100 home chargers. The new program will increase the incentive range for EVs from $5,000 – $8,500 to $6,000 – $10,000, plus provide additional incentives for larger vehicles, larger battery capacities, and new charging stations. A $20 million fund will support installation of fast-charging public EV charging stations to support city-to-city and in-city EV travel across the province.
Social Housing Retrofits – $92 million
Most of Ontario’s social housing towers were constructed in the 1960s and 1970s and offer opportunities to substantially reduce energy use while improving resident comfort – one of the reasons that TAF’s energy efficiency retrofits have focused on social housing. The province is dedicating $82 million for energy retrofits of high-rise social housing towers (over 150 units) including efficient heating and mechanical systems, insulation and windows, and lighting. A further $10 million will help improve electricity efficiency in approximately 1,300 single-family social housing homes, which are often found in smaller and rural communities. Appropriate program design is key to its success, and TAF has recommended that establishing revolving funds would maximize carbon-reducing potential of these dollars, rather than a one-time capital investment.
Cleantech Innovation – $74 million
The government has made $49 million available to industrial GHG emitters to encourage adoption of leading-edge technologies, while supporting entrepreneurs in developing creative solutions. Another $25 million is available to help small and medium-sized businesses reduce emissions and become more energy efficient. These programs will be delivered by the Ontario Centres of Excellence and Canadian Manufacturers & Exporters respectively on an application basis.
This “down-payment” package shows the government understands the key opportunities for carbon reduction and is committed to acting. But, we know the low carbon transition won’t be accomplished in a single year, and it is important to build certainty and confidence for businesses, institutions and citizens. Some attention to design of these initial programs can help pave the way to ramping up and maximizing the impact of investment in low-carbon solutions.
Image credit: Flickr- Dennis Schroeder NREL