energy conservation programs

Alberta rolls out energy conservation programs

First incentives largely focused on rebates for lighting products
Tuesday, May 30, 2017
By Barbara Carss

Alberta’s nascent foray into province-wide energy conservation programs is heavily weighted to rebates on LED lighting and lighting controls. Commercial business operators and broader public sector entities such as health care facilities, schools, universities and colleges can claim for partial refunds of applicable purchases made since March 24 of this year. These include 45 designated lighting or lighting control products and a smaller number of furnace/boilers, water heaters and variable frequency drives for pumps and motors.

Condominium corporations and rental housing landlords could also see some marginal benefits from a smaller selection of free product giveaways for the residential sector. Condo corporations qualify for LED replacements of 60-Watt incandescent bulbs in common areas, while all buildings that are bulk metered for electricity and/or water stand to gain if unit owners or tenants take advantage of the offered LED bulbs and nightlights, advanced power bars, smart thermostats, and water-efficient shower heads and faucet aerators.

Funding for both these initiatives and other elements of the provincial conservation program comes from Alberta’s carbon levy. The coordinating agency, Energy Efficiency Alberta, and its five-year $645-million budget, were among the ameliorating measures the Alberta government promised as it unveiled its carbon pricing strategy in the spring of 2016. Consumers have been paying the levy — currently adding an extra $1.01 per gigajoule (GJ) on natural gas purchases — since January 1. The energy efficiency incentives are now becoming available.

The complete list of eligible products was just posted in mid-May, but commercial and institutional owners/managers were given a broad outline of the pending rebates earlier this year and advised to keep their receipts. Rebates for lighting and controls will be allocated per bulb/fixture/sensor, ranging from $1.50 per bulb for LEDs to replace incandescent bulbs in small general service lamps up to $300 per fixture for outdoor LEDs with an output of 15,000+ lumens. Rebates for heating equipment and variable speed drives are calculated on a $ per installed heating capacity or horsepower basis.

“I think there will be a high take-up for the lighting incentives,” predicts Julien Poirier, a Project Manager with engineering consulting firm, WSP Group. “We’re working with a lot of property managers here in Calgary and elsewhere in Alberta. When we do energy audits and list the measures that will require some capital investment, lighting tends to be at a point either just outside the payback requirements or it’s the case that the tenant, not the property manager, controls the lighting. I think this will be an opening to get lighting upgrades into the capital budget or at least get the conversation going.”

In the absence of incentives, current LED technology typically promises a three- to seven-year payback. “Once we start pushing beyond a five-year payback, the conversation won’t go very far,” he acknowledges.

The array of rebates also presents options for buildings at different stages of their capital programs. Poirier notes that owners/managers who are reluctant to replace lamps and ballasts after a relatively recent upgrade from T12s to T8s may be more open to a straightforward bulb replacement. For once-in-a-generation purchases, the rebates offered for both condensing and near-condensing boilers could help make the business case for a costlier investment that delivers a higher level of efficiency.

Administrative ease and quick paybacks prioritized

Would-be investors may not want to ponder too long before submitting their applications given that there is just $13.3 million in the rebate kitty for the first year of the program — 38 per cent less than what’s been earmarked for product giveaways in the residential sector. It’s expected rebate recipients will kick in approximately $15 million for their share of product costs, and this will deliver nearly $33 million in energy savings over the life of the measures. Program designers foresee somewhat lower returns from the free product giveaways with a $21.5 million year-one investment garnering about $28 million in energy savings.

Rebates are also offered on a range of products for residential households — from low-cost clotheslines and dimmer switches to big-ticket items like insulation, windows and tankless water heaters — to complete Energy Efficiency Alberta’s inaugural trio of programs. As explained in the provincial government’s underpinning strategy document, Getting it Right: A More Energy Efficient Alberta, the product rebates and a related fund to subsidize businesses and homeowners installing small solar photovoltaic systems, have been prioritized for their ability to deliver early results and build momentum.

“Collectively, these four programs have a relatively quick speed to launch and they are considered cost-effective in both reducing emissions and saving consumers’ money,” states the report released in the fall of 2016. “Each program would include significant elements of education and outreach, included as part of the detailed design work prior to launch.”

However, some real estate industry insiders say they’re ready for something a little more sophisticated.

“There’s a built-in incentive to reduce carbon in our industry because landlords are really the ones paying the cost of heating, electricity and water,” asserts David McIlveen, director of community development with Boardwalk Rental Communities, which houses about 45,000 tenants in the province. “In the past three years, we have spent more than $3 million on energy reduction, just in Alberta. We’ve already done most of the things the rebate covers so we’re paying a carbon tax to provide an incentive that we can’t use.”

A more comprehensive selection of incentives has been hinted at for the future, which would likely be similar to those offered in other jurisdictions with funding for energy audits, customized retrofit measures and programs to find savings through operational efficiencies. However, in a province where electricity utilities have previously been statutorily prohibited from offering incentives for energy efficiency, it isn’t necessarily just the consuming public that’s on a learning curve.

“To get to the level of programs you see in British Columbia or Ontario, your staffing levels have to go up and you have to have the knowledge base to meet the demand for services,” Poirier says.

Alternatively, the relative simplicity of Alberta’s initial approach comes with some potentially enviable features. Product giveaways may help ease the perennial dilemma of split incentives in the multi-residential sector, as neither landlords nor tenants will have cause to perceive they are making expenditures largely for the other party’s benefit. Perhaps even more tantalizing from the perspective of building owners/managers in Ontario, Albertans can purchase products and submit applications for reimbursement later — a marked contrast to Ontario’s requirements for approval ahead of action.

“That’s the difference between most electricity ratepayer programs versus taxpayer focused programs,” reflects Andrew Pride, a consultant specializing in energy management and strategic conservation planning. “Alberta’s programs are funded from carbon levies, which operate like taxpayer funding. When utilities deliver ratepayer programs, they typically are required to measure their influence on achieving the savings, which tends to mean more complicated application processes. As carbon programs mature, I would imagine the rigour around influence and attribution of savings will increase.”

Barbara Carss is editor-in-chief of Canadian Property Management.

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