15

Home renovation free ride

Do energy rebates help the environment or fund home makeovers that would have happened anyway?


 
Renovation free ride

Carlos Osorio/Toronto Star

When the federal EcoEnergy retrofit initiative was cancelled on March 31 of last year, the Toronto Environment Office had already been working for several months on designing a home energy retrofit program for low-income owners and renters. Lawson Oates, director of the environment office, says his team expected to piggyback on federal and provincial incentives to offset costs for the program. In particular, they were motivated by EcoEnergy, which had been launched by the Conservatives in April 2007, offering grants of up to $5,000 per home to carry out energy saving improvements and hopefully reduce carbon footprints. But by 2010, after spending $91 million on 85,000 home renovations, the federal government announced the program had been too popular and suspended it a year ahead of schedule. This left the city of Toronto’s scheme in shambles, and short nearly $50,000.

Bureaucratic foul-ups may only be the tip of the iceberg when it comes to troubles with energy rebate programs. With EcoEnergy poised for a revival—an extra $400 million was allocated for the initiative in the Conservatives’ now-defunct 2011 budget—experts across the board are questioning whether the subsidies are any use at all, or simply free money for renovation projects people would do anyway. Still others complain that poor management of the program has wreaked havoc on the entire retrofit industry.

Those who perform energy audits—building experts licensed under the program to assess houses for inefficiencies—say the on-again, off-again approach of the government has put their businesses in limbo. The Toronto-based energy auditing organization GreenSaver says it will experience a sudden reduction in business this week, after the deadline for post-retrofit audits (those who signed on to the program before it expired still had one year to complete a required final audit after their renovations were completed). “Right now, we are busy like crazy because people are trying to get to the deadline in the next two or three days,” says Vladan Veljovic, GreenSaver’s CEO, “but our business is going to drop off to nothing.”

At that point, he also expects that many energy auditors will be skipping town to look for work where their services are in demand. Though, by at least one indicator, the hollowing out of the industry in Ontario has begun already. In Toronto, there’s been nearly a 20 per cent drop in the number of energy advisers working in the city since the announcement that the federal program was being cancelled. “In the long run,” says Veljovic, “once the program is resurrected, there will be a lack of capacity to deliver these programs.”

Others argue that all of this bungling could be avoided by not implementing subsidy programs in the first place. Benjamin Dachis, a policy analyst at the C.D. Howe Institute, says, “There is only a limited amount of money that we can expect to spend on reducing carbon emissions. There are going to be some emissions reductions from these policies, but are these the most cost-effective methods of doing so?” Dachis doesn’t think so. He argues many of the people who receive grants for retrofits are free-riders who would have undertaken renovations regardless of incentives, so the policy doesn’t really change behaviour as it’s supposed to do. In fact, Dachis argues that programs like EcoEnergy perpetuate the “great Canadian myth” that subsidizing conservation is all that’s needed to lower CO2 emissions, when the harder sell—a tax on carbon—is what would do the trick.

According to research by Mark Jaccard, a professor at Simon Fraser University, subsidy programs may have the free-ridership problems, but these are difficult to measure. “The results are all over the map and really depend on the program,” he told Maclean’s. “We are never sure of the amount.” Studies he’s undertaken show free-riders for different programs range between 25 to 75 per cent, which is “admittedly a wide range.”

On the other hand, some say that we should pursue these subsidies because they are better for the environment and green business than nothing at all. Tom Rand, author of Kick the Fossil Fuel Habit and a lead adviser at MaRS Discovery District, an innovation centre that helps fund clean technology firms, notes that buildings account for 40 per cent of our energy use, and making them more efficient is “low-hanging fruit on the carbon tree.” He also sees the program as an effective economic stimulus for the Canadian market for green business.

But Rand agrees with all the people who say the only way to solve the environmental problem is to put a price on carbon. “We’ve been talking about that for 15 years and we’re not going to get it any time soon.” So if passing a carbon tax is a political mission impossible, a different, and some would say wasteful, policy may be as green as it gets for now.


 

Home renovation free ride

  1. And for this, I firmly blame the CPC, for making a carbon tax a political taboo, despite it being the best and easiest way to control emissions, while at the same time being the easiest control on emissions to get rid of as well, should the inactivists ever be proven to be correct. (I doubt that, but if you're one of the climate change inactivists, this is something you should be considering.. it's a hell of a lot easier to get rid of a straight tax than it is to get rid of this idiotic "cap & trade" system that both parties are proposing)

  2. And for this, I firmly blame the CPC, for making a carbon tax a political taboo, despite it being the best and easiest way to control emissions, while at the same time being the easiest control on emissions to get rid of as well, should the inactivists ever be proven to be correct. (I doubt that, but if you're one of the climate change inactivists, this is something you should be considering.. it's a hell of a lot easier to get rid of a straight tax than it is to get rid of this idiotic "cap & trade" system that both parties are proposing)

  3. Eco-refits are for those who have the money on hand and wish to be reimbursed.
    A person or family who rents doesn't have the power generally to refit their space but they will face rent hikes if improvements are made. Those paying a mortgage are often already looking to balance costs of upkeep vs rising energy costs.
    If you really want to help families, give them realistic assistance in improving home energy efficiency. Don't give them a pointless tax credit that they can't afford to achieve.

  4. Interesting. But the way I see it instead of "free-ridership", I think that without these government incentives people take the their home renovation budget and spend it on nice-but-not necessary kitchens or cosmetic home renovations. Or, if they need to replace their furnace, without an incentive they choose the crummier furnace because it's cheaper in the short run and they don't get right advice that convinces them to pay for the more expensive furnace because it's better in the long run. People are kind of short-sighted that way – I know I have been. The thing about these programs is that they get people to be more practical. I would never have draft-proofed and reinsulated without a good grant. Now my gas bill is $40/month in the winter!!! The grants give people a reason to take the unglamorous advice like "fix your leaky house". It's kind of embarrassing that Canadians need such advice but when you look at the kinds of huge results these renovation programs get, you can see we still need it. I needed it.

  5. Interesting. But the way I see it instead of "free-ridership", I think that without these government incentives people take the their home renovation budget and spend it on nice-but-not necessary kitchens or cosmetic home renovations. Or, if they need to replace their furnace, without an incentive they choose the crummier furnace because it's cheaper in the short run and they don't get right advice that convinces them to pay for the more expensive furnace because it's better in the long run. People are kind of short-sighted that way – I know I have been. The thing about these programs is that they get people to be more practical. I would never have draft-proofed and reinsulated without a good grant. Now my gas bill is $40/month in the winter!!! The grants give people a reason to take the unglamorous advice like "fix your leaky house". It's kind of embarrassing that Canadians need such advice but when you look at the kinds of huge results these renovation programs get, you can see we still need it. I needed it.

  6. ecoENERGY Television coverage:
    http://saveecoenergy.ca/videos-save-eco-energy (BC example)

    Dean Stoltz – CHEK TV reporter: It is out with the old and in with the new at this home in Courtenay where a brand new eco-friendly heating system is being installed. A familiar job for companies like Thermotec Mechanical that get noticeably busier when governments handout grants for this kind of eco-upgrade.

    Mike Nelson – Thermotec Mechanical: We saw a drastic increase in requests for quotes when the grants were implemented. The price of fuel, everything going up, Oil replacement has been a large part of what we have been doing.

    Dean Stoltz: Again though they may not have done it if it wasn’t for the grants available.

    Mike Nelson: No, the grants made everyone a lot more aware of it.

  7. ecoENERGY Television coverage:
    http://saveecoenergy.ca/videos-save-eco-energy (BC example)

    Dean Stoltz – CHEK TV reporter: It is out with the old and in with the new at this home in Courtenay where a brand new eco-friendly heating system is being installed. A familiar job for companies like Thermotec Mechanical that get noticeably busier when governments handout grants for this kind of eco-upgrade.

    Mike Nelson – Thermotec Mechanical: We saw a drastic increase in requests for quotes when the grants were implemented. The price of fuel, everything going up, Oil replacement has been a large part of what we have been doing.

    Dean Stoltz: Again though they may not have done it if it wasn’t for the grants available.

    Mike Nelson: No, the grants made everyone a lot more aware of it.

  8. I took full advantage of the $10,000 credit last time around doing work I was already planning to do. The only thing the credit did was make it harder to find quality workmen.

    But I have more work to do in my 80 year old house. the energy savings alone will make it a sensible investment, but if the CPC want to hurl another micro-credit my way I'll take it.

  9. Hi everyone

    The author wrote:
    “In the long run,” says Veljovic, “once the program is resurrected, there will be a lack of capacity to deliver these programs.”

    Let's challenge this potential reality. Please forward this email to your MPs & Candidates:
    (To find your MP's email address enter your postal code at http://www2.parl.gc.ca/parlinfo/comp….aspx?Menu… – You can also find info (Twitter/Facebook/Email) for candidates at http://politwitter.ca/

    THANKS!
    Danny

    Please also send it to the CBC's Leader's Debate Email Address – question@electiondebate2011.ca
    (Include name, address, & daytime phone number when emailing the CBC):

    Hello CBC / Canada Votes,

    I am voicing my support for Danny Vanderbyl's question about ecoENERGY for the leaders' debate. Please see the copy attached below.

    Sincerely,

    Here's an urgent policy issue that needs national clarification from all political leaders.

    "The Federal budget had included a renewal of the ecoEnergy retrofit program. Now, the program sits in limbo.
    By all accounts, the ecoEnergy program is widely supported in public opinion and by all major parties. It helps the economy and the environment. It's a win-win!
    My question to all leaders, is this: With the jobs of Retrofit Testers and renovation contractors presently hung in the balance, will you commit to Canadians that your "ecoENERGY" or "Green Renovation Tax Credit" is open for business TODAY, retroactive to the start of the financial year – (1 April 2011)? …Or will you wait until it is winter, when it's too cold to renovate, to announce the program is ready?"

    Will you put Canadians first and allow them to invest TODAY into the recovering economy, instead of putting Canadians off until the new budget is passed? Will you give Canadians access to the program and the knowledge they need to make informed decisions about whether they should, and how much they should invest into retrofitting their homes – right NOW?

    In summary, as a citizen, I am asking for all politicians from all parties to get together and immediately remove the existing uncertainty regarding the ecoEnergy retrofit program ("Green Renovation Tax Credit.") Please cooperate to make this program active, retroactive to 1 April 2011, and open ended. Allow people to commence their investments right now, instead of waiting until the election is decided. This will be good for the recovering economy. There should not be uncertainty hanging over the program (and people's jobs) until the election is resolved.

    >>Essentially, I'm asking all politicians to make an announcement to this effect:

    "We, as the (re-)elected government, will honour all pre-retrofit inspections commenced as of 1 April 2011. We will direct the staff at NRCAN to accept applications for renovations commenced on or after 1 April, 2011. If you are planning home renovations, do go ahead and get your pre-retrofit evaluation done and invest your dollars into our recovering economy. This will also provide much-neeeded job security to our valued energy-efficiency testers, renovation contractors, and all the spinoff industries until the election is complete and the new budget in place. This is about putting the people of Canada first, ahead of partisan politics. Thank you."

    Background:

    The Liberals announced a "Green Renovation Tax Credit." which is a rebranded ecoENERGY program.

    Families spend $10 on home renovations for every $1 paid in incentives, according to http://saveecoenergy.ca/

    News article on eco testers being out of a job 1 April 2011: http://bit.ly/edtVRS

    People are planning their lives around the program. People are booking time off work, most leases expire during the summertime, and renovations are easier in the summer. Contractors are only available during certain times and delays are expensive. People need a place to live!

    Many familes undoubtedly want to start their renovations with the pre-renovation audit (within the ecoEnergy retrofit program) right NOW! They simply want to get the evaluation done and have it count, regardless of the final details of the incentives of the program, from whichever government is elected.

    In the broader picture, it seems that, at least according to one candidate (Stephen Woodworth – Kitchener Centre), the CPC is already committed to honouring its commitment to ecoEnergy (see https://twitter.com/#!/WoodworthCPC/…5048034644…. The real issue is – can people start retrofitting now and will our new government grandfather in those who begin now with the proper testing today?

  10. I took advantage of the first iteration of the ecoEnergy program: upgrading to low-flow toilets and triple-glazed low-E windows, adding attic insulation and a heat recovery ventilator. Both our water and natural gas consumption have been reduced significantly, and the house stays cooler in the summer so we don't need central air.

    The value of our house has gone up, our energy consumption is down, and the rebates amounted to just under $2,000. This is win for me as a taxpayer and also results in lower CO2 emissions. Strikes me as a win-win for a modest investment.

  11. I took advantage of the first iteration of the ecoEnergy program: upgrading to low-flow toilets and triple-glazed low-E windows, adding attic insulation and a heat recovery ventilator. Both our water and natural gas consumption have been reduced significantly, and the house stays cooler in the summer so we don't need central air.

    The value of our house has gone up, our energy consumption is down, and the rebates amounted to just under $2,000. This is win for me as a taxpayer and also results in lower CO2 emissions. Strikes me as a win-win for a modest investment.

  12. Those that are against the ecoEnergy program are high-tax socialists or idiots, probably both. Bottom line is ordinary people love subsidies for what’s right and hate taxes forwhat’s wrong. Reward, don’t punish. My four year old boy understands this.

  13. Those that are against the ecoEnergy program are high-tax socialists or idiots, probably both. Bottom line is ordinary people love subsidies for what’s right and hate taxes forwhat’s wrong. Reward, don’t punish. My four year old boy understands this.

  14. A push for solar and thermal inground energy sources would help alot

  15. A push for solar and thermal inground energy sources would help alot

Sign in to comment.