energy efficiency programs

Alberta won’t rescue energy efficiency programs

Provincial budget confirms no new source of funding forthcoming
Wednesday, October 30, 2019
By Barbara Carss

It’s hard to miss Energy Efficiency Alberta’s message in the wake of last week’s cancellation of provincially funded energy efficiency programs. The move concludes the process begun five months ago when the newly elected United Conservative Party (UCP) government repealed the carbon tax and eliminated the funding source for the incentives, but the provincial agency stressed a critical qualifier as it delivered the news.

“Rebate programs now closed; Energy-saving opportunities still available,” proclaims the announcement, released after the Alberta budget was tabled on October 24.

For some landlords and facility managers with projects in progress, the dictum comes with tighter deadlines for finishing the work or, for those who have hired an on-site energy manager, a diminished subsidy that will cover only one year of his or her salary. Meanwhile, energy efficiency advocates remain hopeful that the savings realized since incentives for residential households, businesses and not-for-profit organizations became available in mid-2017 will help sustain burgeoning momentum in a province that was one of the last jurisdictions in North America to introduce such programs.

“Our continued focus will be to deliver excellent service to Albertans with approved applications and work toward the designing of new programming,” Energy Efficiency Alberta states. “We’re excited about the province’s energy efficiency potential.”

That said, the agency’s response to presumed Frequently Asked Questions arising from the shutdown, notes: “New energy efficiency programs for the commercial and industrial sectors have not been confirmed.”

Focus switches to carbon capture technologies

The Alberta budget reiterates the government’s previously announced intention to focus greenhouse gas (GHG) reduction spending on carbon capture and technologies that can be directly applied in the production of fossil fuels. Research and development initiatives will be supported via the Technology Innovation and Emissions Reduction (TIER) fund, drawn from levies charged to large industrial emitters with an output of more than 100,000 tonnes of carbon dioxide equivalent (CO2e) annually.

“Between 2000 and 2017, the emission intensity of oil sands operations has dropped by 28 per cent. This is the result of made-in-Alberta technologies and is a real outcome in the effort to reduce global emissions,” Alberta Minister of Finance Travis Toews stated, as he introduced the budget. “TIER builds on this success and keeps the focus on large industrial emitters responsible for half (estimated elsewhere in the budget at 48 per cent) of the emissions in Alberta.”

While also offering incentives aimed at curbing the energy intensity of industrial and resource extraction processes, Energy Efficiency Alberta’s distinct but compatible mandate targeted the other 52 per cent. The agency’s 2018-19 annual report, released earlier this year, estimates programs have thus far generated $692 million in energy savings, stimulated $850 million worth of economic growth and resulted in avoidance of 5.7 million tonnes of GHG emissions.

Landlords, facility managers and condominium corporations have made most use of the Business Energy Savings program, which provides up to $25,000 per building annually for the installation of designated energy-efficient products, including lighting, lighting controls, HVAC and domestic hot water equipment and load-sensing plug strips.

“When the incentives were first rolled out, there was such pent-up demand in the market, even for something as simple as light bulb retrofits, because Alberta had really lagged on this front,” says Graham Halsall, Calgary-based manager for the smart building analytics firm, Energy Profiles Limited. “I think the appetite was even better than was initially anticipated.”

Deadlines for in-progress projects

Now the final slate of proponents, pre-approved in late April, must submit proof the work has been completed no later than October 31 in order to claim the rebate. That aligns with the six-month timeline that has always been in the program’s rules.

“This deadline had previously been communicated with all Business Energy Savings participants and represents the natural end of their pre-approval. It was posted on the website as a reminder,” affirms Ameera Shivji, manager of media and public relations with Energy Efficiency Alberta.

A smaller number of commercial and multifamily building owners/managers along with facility managers in the health care and education sectors are navigating the shutdown of the Custom Energy Solutions program, which was introduced later in 2018. Some members of that group now face a November 23 cut-off for completing engineering studies, scoping audits and re/retro-commissioning (RCx) investigations required as a first step for pre-approval. Those already at the next step will have one year from their pre-approval date to submit proof of project completion in order to claim the incentive.

Although more complicated to undertake, custom programs came with a cash injection powerful enough to influence capital spending decisions. Commercial real estate operators, typically falling into the category of emitters producing less than 10,000 tonnes of CO2e annually, could secure up to $250,000 per year for upgrades in a single building or up to $500,000 for upgrades in multiple buildings, based on a dollars per resulting tonne of GHG avoidance formula. Larger emitters (10,000+ tonnes CO2e annually) could obtain up to $1 million for a single facility or up to $2 million for multiple facilities.

Energy management specialists commend the program’s intent — suggesting that it’s in sync with the evolution of strategies elsewhere, which typically begin with measures to capture relatively easy energy savings and then must become more sophisticated and capital-intensive in pursuit of more intractable consumption and emissions. Now, with the program halted at its embryonic stages, it’s difficult to gauge its traction in the market.

“When the rebate programs were announced, that was a no-brainer. You could do the math and figure out that your payback would go from two-to-three years down to one year. From the more conceptual side of things, like incentives tied to emissions reductions, you don’t yet see that metric on a utility bill,” Halsall reflects.

For the proponents who may now be scrambling to make the new deadlines for claiming incentives, Energy Efficiency Alberta suggests they should also consider inherent returns on the investment.

“Scoping audits, engineering studies and RCx investigations provide valuable data to companies to support energy efficiency decision-making,” it advises. “We hope that participants see a value for the benefits of the study outside the program and continue to complete the work.”

Continued advocacy and guidance

The Alberta budget is largely silent about energy efficiency goals, but Schedule 21 in the fiscal tables chapter indicates that 34 staff positions at Energy Efficiency Alberta will be retained for 2019-20. In addition to administering in-progress projects, the agency will continue to promote green loan funds and financing schemes.

That includes urging municipalities to adopt PACE (property assessed clean energy) financing strategies that provide low-cost loans for energy upgrades that are repaid, incrementally, via a surcharge on property tax bills. It will also continue to offer incentives for technical training and guidance for developing skills and strategies that support energy savings.

For now, Albertans who have been thinking about purchasing smart thermostats, energy-efficient clothes washers, refrigerators or furnaces still have a few days to qualify for a rebate. Purchases occurring by November 7 will be honoured if receipts for the designated eligible products are submitted by December 24, 2019.

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

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