New programs could see homeowners coming out ahead
It’s the provincial carbon levy, and it’s inevitable.
If you’re like me, you want to know what the government is going to do with the revenue.
For starters, it’s setting up an agency whose goal is to reduce our utility bills, decrease emissions and save energy in general.
The agency is called Energy Efficiency Alberta, and, if it works as promised, it should take the sting out of the carbon levy – and then some.
Announced in last spring’s provincial budget, Energy Efficiency Alberta will oversee a five-year plan to help household and businesses use less energy, with its $645-million tab funded entirely by the carbon levy.
Whether you’re a fan of the carbon tax or not, it looks like homeowners, and homebuyers, may be able to come out ahead.
“In my mind this is a no-brainer. You can have your cake and eat it, too.”
The Alberta Energy Efficiency Alliance (aeea.ca) – a decade-old organization supported by the Alberta Real Estate Foundation along with a range of energy firms, municipalities and others – figures the province’s program will result in more than $2 billion in savings for businesses and homeowners over its five-year span. This comes along with a reduction in emissions equivalent to taking almost a million cars off the road.
“This makes sense from an economic perspective and an environmental perspective,” said AEEA executive director Jesse Low. “In my mind this is a no-brainer. You can have your cake and eat it, too.”
So what does the initiative look like for a homeowner or someone in the market?
The simplest part will be the Residential No-Cost Energy Savings Program. Still being finalized, it will supply and install — at no charge — simple products that save energy in homes. These could include LED light bulbs, efficient showerheads and faucets and various other components.
Meanwhile, the Residential Consumer Products Program will see stores give point-of-sale rebates (call them discounts at the cash register) to residential customers on products such as efficient lighting, insulation and appliances. This would include cool tech such as smart powerbars that eliminate phantom power draws from your electronics, high-efficiency furnaces and building-envelope upgrades to decrease heat loss.
Also, the Business, Non-Profit and Institutional Rebate Program will offer incentives to organizations for buying and installing high-efficiency products such as lighting, heating, cooling and hot water systems.
Low said once the program is in operation — expected to ramp up in the first few months of 2017 — the benefits to homeowners will be immediate.
“Direct savings will come in the form of lower utility bills. If you build energy-efficiency upgrades into the cost of buying a new house, the decrease in utility costs will give you a net benefit right away,” he said.
Anyone who has applied for a mortgage knows a home’s utility costs factor into the calculations your lender makes to see if you can afford it. Cheaper energy bills should mean more headroom for the PIT (principal, interest and taxes) part of your debt load.
“You’ll be able to be approved for a higher mortgage, since the utility costs will be lower,” said Low, adding the more real estate professionals know about the program, the better they’ll be able help clients take advantage of the increased home affordability it should offer.
“I’m actually quite excited about the opportunities for the real estate profession to take advantage of this.”
At this point, there’s not much (as in, zero) information for consumers online, but Low expects that will change soon after the New Year begins.
Until the government launches a comprehensive website that guides consumers through the programs, we can’t know for sure how effective they’ll be. But if all goes according to plans and promises, this plan could more than make up for the bump in heating and fuel prices. It’ll be up to us to take advantage of it.
Miles Durrie’s Digital Downlow column appears exclusively in CREB®Now biweekly. Questions? Story suggestions? Email email@example.com.