On October 25, 2012, Kathleen Wynne, Minister of Municipal Affairs and Housing, filed two new regulations that give municipalities real power to drive energy efficiency and renewable energy generation in their communities.
The amendments enable municipalities to use a local improvement charge (LIC) to help residents finance energy efficiency and renewable energy projects.
Research has shown that the biggest barrier to home and business owners interested in undertaking energy retrofits and renewable energy generation is the fear of being unable to recuperate their costs if they move.
LICs are a financing mechanism traditionally used for upgrading sewers, roads, water-mains, and other property improvements. The recent amendments extend the use of these LICs to energy efficiency improvements and renewable energy generation.
The upgrade is made with the owner’s agreement, and the cost is amortized and paid for by the municipality. A financing payment obligation is then levied on the property owner’s tax bill as a surcharge until such time as the fees are completely paid off. The property carries the debt rather than the owner so that, upon sale of the property, any outstanding LIC obligation (and, of course, its benefits) remain with the property.
There is also the added benefit of your municipality acting as the financer. By issuing bonds, municipalities are able to obtain better financing rates than are available to homeowners through the private sector.
Pilot programs are being planned in GTA area municipalities. London City staff will observe these early undertakings.