Upfront costs pose barrier for low-income householders to tap into energy retrofit incentives

Upfront costs hinder access to energy savings

Monday, February 22, 2021

The upfront costs to tap into Canada’s new incentives for home energy upgrades could pose an economic barrier for those who would most benefit from the resulting savings. More than 110 industry associations, building service/product providers and public advocacy and community development groups are voicing support for a separate program targeted to low-income households.

Efficiency Canada, a national research group promoting the dual economic and environmental benefits of energy and water efficiency, is leading a campaign to urge the Canadian government to invest $2 to $3 billion in no-cost energy efficiency improvements for qualifying low-income recipients. That would match funds that have already been pledged for commercial and residential retrofits.

An open letter to Finance Minister Chrystia Freeland and four other federal Ministers, which 113 supporters have now endorsed, argues that offering incentives to trigger further spending — a stated tactic to stimulate post-pandemic economic recovery — overlooks the roughly 16 per cent of renter households and 22 per cent of homeowners currently paying at least 6 per cent of their after-tax income on energy costs. That’s more than double the national median and above the threshold considered to be energy poverty, based on the common formula that consumers should pay no more than 30 per cent of income on housing and no more than 20 per cent of housing costs on energy.

“Low-income homeowners and market renters cannot reasonably be expected to pay the upfront costs required to access federal grants or to take on additional debts from the planned federal low-interest loan. Supporting low-income households requires a separate approach,” the letter submits.

In keeping with Efficiency Canada’s twin economic and environmental interests, it foresees returns in reduced energy costs, which would make room in low-income householders’ budgets for other kinds of spending, and reduced greenhouse gas (GHG) emissions. It also suggests funds could be further leveraged for skills and economic development if low-income, rural and racialized recruits were trained to deliver energy management services and outreach programs.

As part of the campaign, Efficiency Canada will host an online rally March 4, bringing together energy policy activists and program delivery agents from across Canada.

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