City council will debate the creation of a local Clean Energy Improvement Program on Monday. Through it, things like solar panels and insulation upgrades could be paid off over time on a property's tax bill.--NEWS PHOTO COLLIN GALLANT
cgallant@medicinehatnews.com@CollinGallant
The concept that energy-saving home improvements pay for themselves could be put to the test in Medicine Hat where council will debate providing loans that would be tied to property tax bills.
A Clean Energy Improvement Program tax bylaw, to be discussed at a public hearing Monday, would provide loans of up to $50,000 to qualified homeowners for things like better insulation, windows and solar panels.
The debt would then be tied to the land title, not the named owner, and paid off via added charge on the specific property tax bills over up to 25 years, presumably to be covered by the money saved on utility bills.
“There are a number of grants from the city and the federal government, but to access them a home or business owner still has to deal with the up-front cost,” said Coun. Alison Van Dyke, the chair of council’s utility and infrastructure committee.
“We had a lot of people reach out to (council members) early in the term about it, wondering why we didn’t have it here.”
A similar program, called Property Assessed Clean Energy (PACE), has existed in the United States for more than a decade, leading to a Canadian program developed by the Federation of Canadian Municipalities.
Its provincial wing, Alberta Municipalities, launched its version after the province passed related property tax regulation in 2019.
After lengthy processes to pass local bylaws, the program is now available in Calgary, Edmonton, Lethbridge, St. Albert, Grande Prairie and Leduc, along with several towns.
The item at Medicine Hat city council will ask to approve the program and borrow up to $6 million over the next four years, while full application and implementation to proceed in early 2024.
Until then local contractors would be surveyed to become pre-qualified for installation work in the application process.
“There has been a lengthy process already,” said Van Dyke, stating the “highly regimented process is needed in part to avoid pitfalls in the United States, where homeowners have complained about being upsold, or surprised by repayment schedules that eclipse standard property tax bills.
“There are rules to keep both the municipality and homeowner from overextending themselves.”
Early repayment is allowed, and the risk of default for the city is negligible considering unpaid property tax amounts are recoverable in most cases.
Applicants would also need to qualify for loans between $3,000 and $50,000 for residential property – levels that, officials say, would keep repayment amounts manageable for most homeowners.
Properties must be in good standing with the city’s finance department and not be in foreclosure.
The program is forecast to finance between 60 and 68 projects in each of the first four years, each worth between $19,600 and $22,700, for a total of $5.45 million.
The city’s annual fees to Alberta Municipalities would be about $100,000 per year, but would be covered for the initial four years by grants.
