Penticton explores low-cost loans for energy upgrades
Starting sometime in early 2013, Penticton homeowners may be able to draw upon another loan source when making energy efficiency upgrades to their home.
The City of Penticton started looking at the possibility of a low-cost loan program in early 2012, with the dual intention of helping homeowners make home improvements that would reduce energy consumption and greenhouse gas emissions as well as create green jobs in the construction industry.
It’s a concept that could have enormous benefits to the community, according to Penny Cochrane, a senior consultant with Willis Energy Services, who were hired by the city to study the possible program. She estimated residential homeowners could cut energy costs by up to 16 per cent, and, based on a business case of an expected 100 participants over a four-year period, the installations and upgrades could generate 14,500 hours of work, along with the purchase of $870,000 in equipment and materials.
Cochrane based her estimate on $10,000 loans from the city, combined with participation in ongoing incentive programs from LiveSmartBC and FortisBC. The $1 million cost for the loans in her business case would be drawn from either the city’s electric reserve or community works fund reserve.
The program, however, is expected to be cost neutral to the city, with the loans being registered against the property title and repaid over a three to 10-year period at three per cent interest. That, said Cochrane, is the amount necessary to cover most of the costs of the loan program.
“We want to make sure there is no cost to the city,” said Cochrane. “The three per cent interest rate was derived from looking at the cost to borrow replacement funds in the interim … or at least that the interest that would have been earned, is in fact replaced for city hall.”
Coun. Gary Litke hopes they will get more participation than just 100 homeowners.
“I am hoping that we can go to 200 or 300 over time,” said Litke, who reinforced that the intent has always been to make the program pay for itself.
“The intent from the climate action committee was to make this cost neutral for the city,” said Litke. “Potentially, 100 homeowners will benefit and it will benefit their homes and energy bills, but it shouldn’t be at a cost to the residents of Penticton.”
While the program is aimed at creating jobs, it doesn’t contain any way of ensuring that those work hours remain local under the preliminary guidelines discussed at council, homeowners could employ contractors, suppliers or services from anywhere. Mitch Moroziuk, director of operations said they are still planning the details.
“We have not got to that part yet,” said Moroziuk. “We were looking at implementing this near the end of the first quarter of 2013.”
Mayor Dan Ashton, however, said he expects the local industry to rise to the challenge.
“Competition is your best customer and I am quite sure that the people of Penticton have not only the skill set but the opportunity to be competitive,” said Ashton. “We hope they will ensure that transpires.”