My Clean Break column in the Toronto Star this weekend takes a closer look at “local improvement charge” models for financing deep residential energy-efficiency retrofits. Subsidy/rebate programs help address the low-hanging fruit, but it’s time to move beyond light bulbs and shower heads and into programs that go after more substantial efficiency gains. To a large extent, this isn’t about handing out more subsidy dollars as much as enabling municipal financing models that are revenue-neutral to taxpayers and impose little (or zero) additional burden on ratepayers.

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Tyler Hamilton

What is the province doing to help homeowners conserve energy and cope with rising electricity prices?

Not much these days.

Ontario’s earlier commitment to match rebates under the federal government’s program has long expired. The program was extended to March 31, 2012, but the province decided to pull its support.

Instead, we got the Clean Energy Benefit – a 10 per cent rebate on electricity bills that will be in place until 2015 at a cost to taxpayers of more than $1 billion a year.

That’s money that could have gone toward conservation programs. Now it’s being used to undermine conservation by giving consumers less reason to care about energy wastefulness.

It’s hardly a sustainable approach. Clearly, the only way to help Ontario ratepayers cope with rising electricity rates over the long term is to push for deep energy conservation in households across the provinces.

And here’s the thing: it could, if done properly, barely cost anything for the province and municipalities to make such a serious conservation push.

It turns out that a lack of subsidies isn’t the biggest thing holding back major residential energy-efficiency projects; it’s the lack of affordable and easy-to-access financing.

It’s also about the lack of willingness on the part of provincial and municipal leaders to embrace programs that have already had successful test drives south of the border.

These programs come under a variety of names, but at their core is the ability of a municipality to raise cheap capital through a bond issue and then offer low-interest financing to homeowners wanting to do major energy-efficiency retrofits.

Under such a model, the homeowner repays the city (with interest) over 15 to 20 years through a type of “local improvement charge” added to property tax bills. The idea is that the permanent energy savings from the retrofit would more than cover the cost of repayment.

Also, the charge is tied to the home, not the owner, so doesn’t add to personal debt load. When an owner sells the property the new owner takes over the charge but also gains the benefit of having lower monthly energy costs in a climate of rising prices.

“There’s huge interesting in this approach, from people at all levels of government,” says Sonja Persram, president of Sustainable Alternatives Consulting Inc. in Toronto.

She says 26 U.S. states have already changed legislation to permit this kind of municipal financing, and late last year Nova Scotia made similar changes in support of a solar-thermal installation program in Halifax.

“It can be delivered at no cost to municipalities, and some municipalities have been looking at having programs that are even slightly revenue-positive,” she adds.

Under contract with the David Suzuki Foundation, Persram spent the past two years studying the approach, which she calls Property-Assessed Payments for Energy Retrofits, or PAPER for short. Her findings were published in three reports that came out in April, May and August.

The research has been well received in both financial and building appraisal communities, and earlier this year the Toronto Real Estate Board passed a motion supporting creation of a PAPER program for Ontario.

There is a big roadblock, however, and this is where the province plays a crucial role. Toronto and other municipalities can’t offer this kind of financing unless Ontario moves, like Nova Scotia did, to pass enabling legislation.

Queen’s Park would also need to assuage the concerns of mortgage lenders. After all, if you as a homeowner get $30,000 in municipal financing to retrofit your home, a bank might not like that the lien for that amount placed on your property takes priority over a mortgage in the event of default.

(Such a concern raised by Fannie Mae and Freddie Mac in the U.S. has effectively brought all PAPER-like residential programs to a standstill until legal issues are resolved).

The province would have to make clear to all parties that it wouldn’t be the entire $30,000 that gets priority over the mortgage, but only any defaulted payments on that financed amount. That’s because once the property is sold, the new owner would take over the remainder of the retrofit financing.

“In order for such a program to work here you have to have the province, the financial institutions and the City of Toronto all sitting in the same room talking about this issue,” says Tim Stoate, an associate director and investment expert at the Toronto Atmospheric Fund. “I don’t think that conversation has happened.”

It needs to happen if the McGuinty government wants to pay more than lip-service to its energy conservation goals. It is unlikely happen, at least not at a scale that matters, if the province doesn’t step in as chief facilitator and coordinator.

Tyler Hamilton, author of Mad Like Tesla, writes weekly about green energy and clean technologies. Contact him at tyler@cleanbreak.ca

Here’s my latest Clean Break column in the Toronto Star:

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By Tyler Hamilton

Ontario’s new Energy Minister Chris Bentley has much to learn over the coming weeks about the province’s complex energy file, and hopefully with that learning will come some genuine listening.

It’s tempting to think that the Liberal win earlier this month was a vote of confidence in the government’s green energy strategy, warts and all.

But one could just as easily argue that the outcome of the election would have been very different if PC party leader Tim Hudak hadn’t taken such an extremely negative position against the Green Energy Act, the feed-in tariff (FIT) program and associated initiatives.

Voters, by and large, are supportive – and many quite proud – of Ontario’s green energy vision. They see that it’s the direction we must take. They also see economic opportunity by heading in that direction, if done properly. For this reason, it appears most voters weren’t prepared to let Hudak hit stop and press the rewind button.

At the same time, the fact that the Liberals only squeaked ahead in the popular vote seems a clear message that the approach behind the vision needs some fixing – and fast.

For one, the ball has been dropped on energy conservation. We know that the cost of programs that help us reduce energy consumption is much less than building new power supply. We know that investment in energy efficiency has a much faster payback, represents a permanent reduction in carbon emissions, and is a significant job creator.

We also know that widespread support for energy conservation is the best way to help ratepayers cope with rising electricity rates. After all, who cares if the rate goes up if the monthly bill stays the same?

Yes, the smart grid will help us take control of our energy use, and smart meters can encourage us to shift when we use electricity. All of this helps, but it doesn’t encourage us to use less electricity. It’s not true conservation. And trust me, we waste a lot of energy. There’s much to conserve.

The Liberals have also paid a lot of lip-service to helping seniors and those on fixed-income cope with rising energy bills, but what’s lacking is meaningful action. The Clean Energy Benefit temporarily slapped on everyone’s bills is not an answer, nor is an end-of-year tax credit on a bill that’s paid monthly.

Another fix is needed with the FIT program itself. The rate structure is terribly out of date, and the Ontario Power Authority is already late in launching its two-year review of rates paid out for solar, wind, small hydro and biomass projects.

The rates under the FIT program were first announced in early 2009 and designed to assure a “reasonable” return on investment – about 11 or 12 per cent—for developers. The problem is that technology costs shift over time, sometimes dramatically. Solar is a case in point.

A recent report from the U.S. Department of Energy’s Lawrence Berkeley National Laboratory concluded that the average pre-incentive cost of residential and commercial solar PV systems fell 17 per cent last year and a further 11 per cent in the first half of 2011.

“Solar cell prices around the world have gone down significantly,” Paco Caudet, general manager of solar module maker Siliken Canada, told me this summer. “We have brought down costs over the last five months alone by almost 30 per cent.”

You hear the same story over at Celestica, which is manufacturing solar panels and inverters in Ontario for other companies looking to comply with local content rules.

Mike Andrade, the company’s senior vice-president, echoed Caudet’s view. He said the original solar FIT rates were based on a price for panels and inverters that is now 30 to 40 per cent lower. “Developers can make a fine return on investment at a much lower FIT rate than we have now,” he said.

Yet we continue to wait for rate adjustments. In retrospect, the two-year review was a mistake. Rate structure reviews should be done annually so the program can more quickly adapt to a changing marketplace.

We might also want to ask: should developers of multi-megawatt solar projects and large wind farms be booted out of the FIT program entirely?

After all, the program was created so community cooperatives, small businesses, farmers and homeowners could participate more easily in an electricity system previously dominated by the big developers, who were the only ones with the resources to take part in a competitive bidding process.

The level of community participation hoped for just hasn’t happened under the FIT, and this may explain why the McGuinty government had such a poor showing in rural Ontario ridings. People in many of these ridings are feeling like big projects are being imposed on them and that they have little say in the process.

European studies show that there is less resistance to projects when those in the community feel they have part ownership and a voice that will be heard. The FIT needs to move in that direction.

Not to say we still won’t need the big projects. But developers of these should be required to bid against each other so that Ontario ratepayers are assured the best deal.

And that, in a nutshell, is the problem we have so far: a great green vision, but not necessarily the best deal.

There’s much room for improvement, but first the government has to recognize the need.

Tyler Hamilton, author of Mad Like Tesla, writes weekly about green energy and clean technologies.

This is a guest post from the Evergreen blog:

People know that Evergreen Brick Works celebrates both the natural and cultural heritage of Toronto. But what role does it play in shaping the future of sustainable transportation in this city and beyond?

Evergreen Brick Works is more than a vibrant space for community festivals and appreciating nature in the city. It is also a living lab and a hub for green innovation, where like-minded people and businesses can explore, advance and apply urban sustainability solutions.

So, when the Electric Vehicle Society of Canada approached us to host their upcoming EV Festival, we were fully on board. What surprised us, however, was the depth of enthusiasm toward EVs and just how far the technology has come.

The EV Fest, to be held in The Kilns and Holcim Gallery on Sunday, Oct. 23 (10 a.m.–5 p.m.), will feature dozens of registered electric vehicles on display, as well as many people who have converted their cars and can help you convert yours. And, of course, Autoshare will be on hand with their Nissan Leaf parked close by at our charging stations in the main lot. Plus, be sure to stop by Better Place and their EV demonstration centre for even more electric fun!

You’ll come away from the day recognizing that the innovation and technology for EVs already exists—it simply needs to be scaled up.

The event will also be a great precursor for many more sustainable transportation initiatives planned at Evergreen Brick Works.

We are currently gearing up to host MOVE, a Transportation Expo next summer that will guide visitors through the past, present and future of urban transportation. The Expo, presented in partnership with George Brown College’s Institute without Boundaries, will be the first in a five-year series exploring the major issues affecting cities, and will also include a suite of 10 design “charrettes” held this fall.

Here’s my latest Clean Break column about Toronto-based Solar Ship, which has designed a hybrid airship-airplane that’s driven only by solar power. This is a very cool creation.

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By Tyler Hamilton

Mining companies operating in the most remote areas of Canada may want to take notice. Ditto for humanitarian groups looking for better ways to get life-saving medical supplies to hard-to-reach, disaster-stricken regions.

A Toronto company called Solar Ship has designed an aircraft that it says will be able to travel 1,000 kilometres carrying up to 1,000 kilograms of cargo, powered only by the sunlight that shines on its back. It will also be able to take off from — and land on — a spot no larger than a high-school soccer field.

Not quite an airship, not quite an airplane, the solar ship is a hybrid of both. The delta-shaped aircraft will be filled with helium, but slightly less than what’s required to lift it off the ground.

Solar panels across the top of its body, likely backed up by a lithium-ion battery system, will supply enough electricity to drive it forward and into the air. In this way, the design achieves just the right balance of static lift (like a blimp) and aerodynamic lift (like a plane).

Jay Godsall, founder and chief executive of Solar Ship, says his aircraft will be able to go where no roads are built, where landing locations are too small or have been destroyed, and where existing airplanes and helicopters can’t reach on a single tank of fuel.

The need is certainly there. When a magnitude 7.0 earthquake struck Haiti on Jan. 12, 2010, it took eight days before supplies and other aid could be delivered to the city of Jacmel.

Roads from the capital, Port-au-Prince, were blocked. The small airstrip and fuelling infrastructure in Jacmel were too damaged to accommodate supply flights from the closest U.S. city, Miami.

“Nobody could land,” says Godsall. “If we could make a similar run, and do it here in Ontario, it would be an irrefutable demonstration of our aircraft.”

He plans to hold just such a demonstration in summer 2013. A test flight of a smaller solar ship designed to carry a light load of medical supplies is expected in late 2012, somewhere in Africa.

Solar Ship’s target market is any industry with logistical headaches, including mining companies trying to open up areas of the north where roads are either non-existent or made of ice that is becoming less stable because of climate change.

Godsall recognized the need for such an aircraft back in the early 1980s while running a lawn mowing business in Ottawa.

Just 16 years old at the time, the young entrepreneur had become friendly with some students from Burundi who spoke poor English. He gave them some lessons, and in exchange his lawn mowing business got access to the African embassy crowd.

This led to occasional social visits to the Burundi embassy. One Saturday — Feb. 5, 1983, to be precise — Godsall attended a luncheon and overheard a gentleman talking about landlocked countries in Africa that had major transportation challenges.

“We have the least reliable transportation infrastructure in the world,” the gentleman said. “We have a lot of resources, but we can’t get them out to the global economy.”

The teenage Godsall responded, “Why don’t you just get yourself an airship?”

Once uttered, the idea was firmly planted. “I caught the bug,” says Godsall, explaining how he ended up doing high school projects on airships and, later at university, did an economics thesis on the use of airships to spark economic development in Africa.

“The thesis was rejected as lunacy,” he recalls. He’s had a chip on his shoulder ever since.

Godsall pressed on, starting his first airship business in the early 1990s. But he couldn’t attract the funding required to get it off the ground, so he directed his efforts instead to helping people start up businesses in Africa.

In the decade that followed, he travelled to Africa dozens of times and got to know the continent intimately, as well as the many infectious diseases that were common to the region. This included a bout with malaria in 1997 that nearly killed him.

But adversity gave birth to opportunity. Godsall ended up teaming up with the doctor who saved his life, and they built a business around getting life-saving medical supplies to remote communities.

Once again, the airship idea was floated. Only this time, Godsall decided to rethink his approach, knowing through experience that airships lifted by helium alone were difficult and awkward beasts to control.

In 2004, he approached James DeLaurier, a professor at the University of Toronto’s Institute for Aerospace Studies and, according to Godsall, “the king of engineering for airships.”

He posed a very specific problem to DeLaurier: get 1,000 kilograms of refrigerated medical supplies from point A to B. DeLaurier pulled out a model that looked like both an airship and an airplane.

“It was a freaky design, like a stealth bomber but all ballooned out, all puffed up,” Godsall recalls.

The two men agreed to pursue just such an aircraft, so DeLaurier recruited some of his U of T students and worked away to refine and improve the design. Happy with the progress, Godsall and DeLaurier registered the company Solar Ship in 2006.

Today, DeLaurier is the company’s chief aerospace engineer, and along with a team of top-notch engineers and bush pilots, the company is quietly preparing to show the world what its oddly shaped, emission-free aircraft can do.

For Godsall, the initiative is about building on Canada’s world-recognized leadership in airship design and, particularly, remote-area aviation. He knows full well there’s likely to be turbulence along the way, and that the aircraft will operate best where the sun shines and weather is steady and predictable.

But if anyone can get it right, it’s us Canadians. “Canada has the best bush plane community in the world,” says Godsall. “We have the best engineers and pilots. We’re the experts.”

This, to him, is another chance to prove it.

Tyler Hamilton, author of Mad Like Tesla, writes weekly about green energy and clean technologies. Contact him at tyler@cleanbreak.ca.

Happy to report that the re-election of the Ontario Liberal government last night means the province’s landmark Green Energy Act, which gave birth to the continent’s first comprehensive Euro-style feed-in-tariff program, has survived its first major challenge. The opposition Progressive Conservative party vowed to scrap the FIT program if elected and neuter the green energy legislation that has brought billions of dollars of investment to Ontario, thousands of jobs, and a new economic pathway for a province that needs to reinvent itself for the 21st century.

The election outcome means the admittedly far-from-perfect FIT will remain and the legislation protected, at least for a few years — enough time for these ambitious initiatives to prove their worth to Ontarians. In many ways, the fact Premier Dalton McGuinty’s Liberals were left 1 seat short of a majority government is a good thing, as it forces the government to consider and take seriously some legitimate concerns with how the FIT has rolled out and the lack of attention paid to energy conservation initiatives. The New Democratic Party of Ontario, which won 17 seats, are generally supportive of both the GEA and the FIT, but the fact they hold the balance of power could — and should — nudge the Liberal government to improve its approach.

1. The NDP has been rightly critical of the Liberals for their lack of attention to energy conservation programs, so perhaps now they can light a fire under the Liberals, which have done some important things on conservation but recently have only paid lip-service to it, despite the fact it’s the best and most permanent way — from both a cost and environmental perspective — to create jobs and reduce the province’s dependence on fossil fuels.

2. Expect the NDP to also force the government’s hand on the nuclear file — specifically plans to build two new reactors at the Darlington Nuclear Generating Station. Can we afford it? Does it make sense? Would the money be better spent on deep energy conservation efforts and programs to help low-income Ontarians deal with the energy transition taking place in this province?

3. The NDP’s idea of putting all the power back in the hands of a re-constituted Ontario Hydro is flawed beyond belief, but certainly one can envision a new role for Ontario Power Generation. Why not let OPG develop renewables such as wind, particularly in the far north, in a way that still respects the need for independent power developers and the partly competitive market we currently have? It won’t be easy, but certainly the question should be asked. Letting OPG put some flesh in the game could also change the dialogue with the Power Workers’ Union, which has bashed the McGuinty green energy plan partly — if not mostly — because it threatens the jobs of its unionized workers at coal and nuclear plants.

4. I would hope the Liberals, backed by the NDP, also put pressure on Hydro One, which many believe has purposely dragged its feet when it comes to upgrading transmission and distribution to accommodate green energy projects, in hopes the PCs would win the election last night. Sorry folks — your wish didn’t come true. Time to deliver on what your shareholder has asked you to do. And if Hydro One can’t do it, perhaps the government should consider the idea of permitting merchant lines in Ontario, allowing private-sector transmission developers to enter the game to fill a vacuum left behind by our public utility.

5. Finally, the NDP did seem to emphasize a need to listen to the concerns of municipalities more closely. The Liberals were too dismissive of local concerns when the GEA and FIT were launched, declaring they would have no tolerance for NIMBYism. Well, obviously that wasn’t an issue when it came to natural gas power plant protests, so the Libs have exposed themselves as hypocritical on this file. Some of those protesting wind farms in rural Ontario are extreme, and they will never be pleased. But many have more legitimate and addressable concerns that need to be heard and, when possible and reasonable, acted on. The government needs to show more goodwill in this area, otherwise it will never get the rural buy-in that it desperately needs for Ontario’s green-energy future to remain bright.

Anyway, these are just some of my initial thoughts. Please consider this an open thread. I’m interested in hearing other views out there.