With the government of Ontario planning to rapidly scale up low carbon investment in the social and affordable housing sector as part of the Climate Change Action Plan, research and analysis is needed to help inform the structure of investment programs to deliver the greatest impact in terms of greenhouse gas (GHG) reductions and operating costs savings for housing providers. In order to develop insights on sector capacity for implementing low carbon investments, an evaluation of the effectiveness of the Renewable Energy Initiative (REI) was conducted by Toronto and Region Conservation’s Sustainable Technologies Evaluation Program (STEP) and Ontario Climate Consortium (OCC), in partnership with Evergreen.
Launched in 2010 as part of a comprehensive economic stimulus program targeting Ontario’s social and affordable housing sector, the REI disbursed approximately $57 million in provincial and federal funding to 161 different social and affordable housing providers within Ontario for the installation of renewable energy (RE) systems. The program started allocating funding in 2010, with the final projects being completed by the end of 2012. Eligible technologies included solar photovoltaics (PV), solar domestic hot water (SDHW), solar air heating, geothermal and wind turbines.
The Social and Affordable Housing Sector in Ontario represents five per cent of Ontario’s housing supply and 20 per cent of the rental supply — approximately 260,000 units in total. Nearly 100,000 of these units are public housing units under municipal responsibility and 160,000 are owned by non–profit or co-operations. The size and condition of buildings in the sector indicated a potential for retrofits on a massive scale; retrofits can happen quickly through consolidated decision-making that is available through the network of service managers and housing providers; and social and affordable housing buildings are owned for longer than buildings in the private sector, allowing for longer-term investments.
The overall objective of the evaluation was to document the benefits of the REI investments by analyzing their effectiveness in achieving social, economic and environmental outcomes for social and affordable housing providers and the Province of Ontario, while documenting insights on sector capacity, project implementation, program design and provider experience.
Highlights of Findings:
- Overall housing providers found the experience of the REI as positive;
- Many housing providers became even more enthusiastic about energy sustainability;
- For every $1 million provided for RE systems, REI is estimated to have generated $1.22 – $1.27 million in lifetime benefits for housing providers (in 2010 dollars) and carbon reductions of 554 tonnes C02e;
- The REI Program was estimated to have generated $62 million GDP and created 604 full-time equivalent (FTE) jobs.
- Some housing providers outside of major city centres reported difficulties finding Renewable Energy Technology (RET) qualified vendors;
- Meeting program timelines were challenging for some housing providers;
- Some housing providers were not aware of renewable energy systems and their potential benefit for smaller buildings.
The REI was estimated to provide more in savings or income to housing providers than was disbursed to fund the systems, while also providing ancillary benefits like job creation and GHG reductions. The financial performance of the program was driven by PV, which could also obtain support under the FIT and microFIT programs. The performance of non-PV technologies depended on the fuel being offset. Financial performance was estimated to be much stronger when offsetting electricity relative to natural gas. However, GHG reductions are much stronger when offsetting natural gas due to the relatively clean Ontario electricity grid. Without more detailed information on which fuels were being offset, the final performance metrics were calculated assuming a ratio 80 per cent/20 per cent for gas/electricity as the primary heating fuel for the housing units, approximately in line with provincial averages.
The REI was most beneficial to those that had the capacity to participate in the program. Many segments of the sector had lower participation due to a capacity gap; this included Northern, private and small-scale social and affordable housing providers. The retrofit process can be pictured as a journey map, the last stage of which is funding. As a 100 per cent capital cost subsidy, the REI was most effective at helping those already at the last stage. Broader efforts beyond the funding of systems would help promote readiness across the sector and also promote funding disbursement more in line with what would be expected from a fair allocation based on the numbers of housing units in each service area portfolio.
The capability of the housing providers to effectively operate and maintain their RE systems vary across each sector. This was not an issue for PV, the largest component of the REI, because it requires minimal operations and maintenance (O&M), while notable system issues are normally straightforward to detect. Some level of O&M is required for the other system types and insufficient O&M contributed to sub-optimal performance in some cases. Complete up-front funding of maintenance contracts was not effective.
This study identified an opportunity for housing providers to play a greater role in the O&M of their systems and, in the process, help to safeguard the investments made in the sector. O&M guidance and training incorporated into an incentive program could help identify how to include RE system inspections alongside other maintenance inspections, what to look for and how often, and what O&M activities require specialized expertise. Additional measurement and verification (M&V) would help to detect system issues and facilitate the program evaluation.
To view the full report, visit http://www.sustainabletechnologies.ca for more information.
Leigh St. Hilaire, B.A.Sc. is a Project Manager II, Energy, for the Sustainable Technologies Evaluation Program (STEP).