It just became easier to save money and help the planet

If you’re a homeowner in Ontario, it just became easier to save money. Oh, and it also became easier to help the planet and to support your local economy.

Late last week, without fanfare, the Ontario government amended a couple pieces of legislation. In short, the amendments allow municipalities to lend homeowners money for home improvements, like adding renewable energy systems or energy efficiency upgrades. And these loans can be tied to the property, rather than the homeowner.

This may not sound like a big deal, but climate change wonks and green economy nerds have been asking for this type of mechanism for a long time.

Energy efficiency upgrades are known to be the cheapest way to cut greenhouse gas emissions. According to global consultancy, McKinsey and Company, massive emissions cuts can be made at negative $35 per tonne, meaning they save, rather than cost, money.

Yes, you read that right.  Energy efficiency upgrades save you money because lower energy bills more than offset the costs of the upgrades. Energy efficiency retrofits are also known green job creators, and a key component of any plan to cut climate-changing emissions.

One hitch is that although in the long run these retrofits save homeowners money, there are often high upfront costs and it takes time, many years in fact, to break even and realize a net financial gain. As a result, homeowners who are unsure about how long they’ll remain in their current house are often reluctant to undertake these projects for fear that they will shoulder the costs while the next owner will enjoy the benefits.

Tying the loans to the property, rather than individuals, is an elegant way around this problem.

The loans don’t require people to cough up the cash upfront. And because they have long terms and low interest rates (municipalities can borrow at lower rates than individuals and pass these savings onto us), the monthly payments can be set at an amount that is less than the expected monthly savings on energy bills, meaning the person doing the work starts saving on day one. Of course, they also get to enjoy a more comfortable home.

The long payback period is widely recognized as a deterrent, which is why loans like this are core components of energy efficiency initiatives in several jurisdictions. For example, this type of financing, with loans tied to properties rather than people, is central to New York State’s “Green Jobs, Green New York” initiative. Similar programs are being rolled out in 27 other states. Long term, low-interest financing is also central to the U.K.’s ambitious, “Green Deal.” And similar mechanisms are being rolled out here in Canada, in B.C. and Manitoba.

This change isn’t only good for Ontario homeowners.  It’s good news for everyone concerned about Ontario’s environment and economy.

Ontario’s housing stock uses about 21 per cent of the province’s energy, which means that improving the efficiency of our houses could dramatically cut our green house gas emissions.

Furthermore, energy efficiency retrofits create local green jobs, yielding about 20 jobs for every $1 million of increased economic output. And with our economy still struggling, more jobs is exactly what we need. Spending on efficiency can also help boost the GDP.

Sometimes, it’s the little things that make all the difference. A seemingly minor amendment, passed quietly, has set the stage for people to save money, cut emissions, and create local jobs.