Guest Post: Shaun Chapman and PACE Financing

Ontario has been moving aggressively toward a renewable future that is both profitable and sustainable. To that portfolio of financing options Ontarians have taken an interest in PACE (Property Assessed Clean Energy) financing. Fresh from the 2010 Ontario Community Power Conference it is clear that Ontarians would enjoy a bit more information on how this program works, and why it might be a good fit for green energy proponents.

First, how does PACE work? Or at least, how has it worked in the United States?

ClimateSpark Seeks to Challenge Communities to Reduce Carbon

As the world’s national governments prepare to gather for the first post-Copenhagen United Nations Climate Change Conference in Mexico later this month, sub-national and regional governments are moving ahead with low carbon initiatives on their own. One of the most recent examples is the Low Carbon Economic Strategy plan published by the Scottish government last week. It is an attempt to focus the government’s approach in exploiting Scotland’s natural resources and competitive advantages towards the creation of 60,000 new green jobs by 2020 and grow its economy.

Closer to home, the City of Toronto is attempting to leverage the power of social networking to help the city mitigate its impact on climate change. The Toronto Atmospheric Fund (“TAF”) launched its ClimateSpark Challenge on November 3, 2010 in an effort to discover and nurture low carbon solutions.

An Historical Review of Ontario's Electricity Sector by Paul McKay

On Monday, November 15, 2010 attendees at the 2nd Annual Community Power Conference were fortunate to hear investigative reporter and author Paul McKay commemorate 100 years of community power in Ontario with an informative and insightful speech.  As a member of that audience, I thought it was important to put Paul's message in the public realm so that all Ontarians can better understand the value and importance of their investment in sustainable energy through the Green Energy and Green Economy Act (2009). Paul's latest book is Atomic Accomplice:  How Canada Deals in Deadly Deceit.  While you wait for your copy to arrive, I hope you will read his speech, reprinted here in its unedited entirety:

Canadians are widely reputed to be a peaceably pragmatic lot, not prone to claims of revolutionary high drama, divine destiny, or prima donna self-promotion. We can't claim a Paul Revere, a Joan of Arc, a Donald Trump or Lady Gaga.

Instead, we have Banting and Best's quiet discovery of insulin, Dr. Norman Bethune's battlefield blood transfusion kit, Alexander Graham Bell's crackling telephone, Massey-Ferguson tractors, the RIM Blackberry, the Tim Horton's drive-thru - innovations which succeeded because they worked.

So it may be tempting to assume that a condensed version of Ontario's 100-year history of electric power might be worthy of only a bored yawn, or an early exit for an advance coffee break.

I am here to convince you otherwise.

A Bright Idea: Energy Services Agreement

Versions of this entry can also be seen at Tyler Hamilton's Clean Break blog (http://www.cleanbreak.ca) and here at Energy Management (http://www.energymanagementcanada.com).

Introduction

Energy retrofits of industrial and commercial buildings have recently proven to be one of the more popular initiatives for Canadian landlords and tenants (“project proponents”) seeking to brandish their green credentials or, simply enough, to save money. However, comprehensive retrofits can be quite costly with high initial capital costs and long payback periods. Incentives such as the federal government’s ecoENERGY Retrofit, BOMA Toronto’s Conservation and Demand Management (CDM) $60 million fund and Toronto Hydro’s Business Incentive Program have been attempts to make some of these investments more palatable to building owners and operators.

Unfortunately, for energy efficiency enthusiasts, these programs are generally limited-time offers and may not coincide with building maintenance or budget cycles. (In fact, both the ecoENERGY Retrofit and the BOMA Toronto CDM programs will be shut down by March 31, 2011.) What other options does a cash-strapped business have to conduct electricity conservation projects on their properties? One solution that is currently overlooked, but may prove more appealing as incentive programs are phased out, is employing an Energy Services Agreement (“ESA”).

Community Power Developments in Canada

Background  

In a previous post, I discussed the importance of embedding acceptance for the objectives of Ontario's Green Energy and Green Economy Act (Ontario) (the "Act") within communities. Only by developing widespread support for renewable energy would the province be able to ensure enough support is entrenched to weather future storms and transfers of political power.  Recent developments suggest the province is on track to incorporating local communities in this transformative change.

Ontario's Track Record

Developing community-owned renewable generation is an objective of the Act and a major goal of the Feed-in Tariff ("FIT") Program. Early reviews of the effort by the Ontario Power Authority ("OPA"), which administers the FIT Program, suggest it is realizing some considerable headway in this regard. It has signed contracts for 264 MW of community renewable generation and an additional 120 MW from Aboriginal renewable generation according to an October 12, 2010 report.

Energy analyst Paul Gipe has stated that once these projects are completed, "Ontario will have the largest installed base of community-owned renewable generation in North America, surpassing community ownership of renewable generation in Minnesota." This could put the province on track to have the largest installation of community-owned renewable generation outside of traditional powerhouses Denmark and Germany. However, there is still a palpable sense of uneasiness among the sector's most enthusiastic supporters who see limited financing options and low returns as two significant barriers for these groups to overcome.