With fall suddenly here, many are starting that annual struggle of wills and sweaters, playing chicken with the cold and waiting as long as possible to turn on the furnace for the first time in the season. But for one in five families in Waterloo Region, including the townships, that struggle is more serious.
According to Reep Green Solutions, 20 per cent of households in the region experience energy poverty, meaning they spend more than six per cent of their income on heating and cooling their homes. This means they either live in discomfort – not turning up the thermostat when it’s cold, for instance – or they forgo other items like groceries to afford energy bills.
Reep, an organization working to help the region’s households become more sustainable and carbon neutral, is designing a home energy retrofit loan program for the Region of Waterloo to help meet carbon-reduction goals. Ahead of this, the team released a report last month which they commissioned to learn about the affordability and accessibility of green energy retrofitting loan programs for low- to moderate-income households.
The report, “Considerations of Equity in an Efficiency Financing Program,” took stock of the amount of energy poverty in the region, and the ability for low- to moderate-income households to access loans for energy upgrades in their homes.
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The report was funded by the Federation of Canadian Municipalities, and Kambo Energy Group was retained to carry out the report.
Research began last summer, and it took about a year to design the study, conduct the research and publish the results. To collect the data, eight community groups across the region were consulted, including Wellbeing Waterloo Region, Woolwich Community Services and Kinbridge Community Association.
“We brought in Kambo as a consultant to ask ourselves how can we embed equity in whatever we designed (for a loan program for energy upgrades)? And should we be looking at the risks of loans for lower-income households?”said Mary Jane Patterson, the executive director of Reep Green Solutions.
The report found that across the region, more than 32,000 households were paying two times the national average on energy as a percentage of their income.
In Woolwich Township, Patterson says 1,275 households spend more than two times the national average of income on energy costs, 455 spend more than three times the national average and 205 spend more than five times the national average.
The findings found that loans for energy retrofits could harm families that don’t have the ability to take on more debt if done incorrectly.
“I would say one thing that really struck me is that a loan is a privilege,” said Patterson. “You have to be able to afford the extra payments each month to repay that loan, and not everyone can.”
They found that households that rent can be in a precarious situation. If the landlord decides to retrofit and make a home more energy efficient, there is a real fear among low-income renters that they will be “renovicted,” evicted due to planned renovations.
Yasmin Abraham is the co-founder of Kambo Group and helped carry out the study. “The key takeaways for Kambo is the continued confirmation of why we do the work we do,” she said to the Observer via email. “This study really reiterated for us that solutions should be grounded in the needs of the community and consider the pragmatic everyday challenges households face.”
The study found that low- to moderate-income households do not have the ability to absorb high costs in the short-term. One interview participant is quoted saying, “While purchasing toilet paper at Costco may be $3 per roll cheaper than purchasing at Safeway, you need to have the financial ability to purchase 20 rolls at once as opposed to just four. You know it’s cheaper to buy at Costco, but you can’t afford to.”
They found that debt is not considered a financial tool by low- to moderate-income (LMI) households, but something to be avoided and only used in emergency situations. “LMI households are less likely to take on debt to address energy efficiency improvements – unless they are critical or immediate needs such as a broken furnace or window,” said the report.
There were a number of risks identified for such families who might participate in a loan program. That includes the risk to renting households that if the landlord upgrades the building, they could be renovicted. For this reason, many low-income renters don’t raise their high energy bills as a concern to their landlords.
The survey’s recommendations include ensuring energy loans are only given to people who can actually afford them, that the repercussions for late or non-payments must be clearly laid out for the customers, the financial risk for low- or moderate-income households can be mitigated with consumer protections like lower interest rates, linking monthly payments to actual bill savings, or providing subsidies and ensuring renter protections, among other recommendations.
But how will those households that can’t afford to take on extra debt be able to access the retrofits needed to lower their energy bills?
“The other thing is that we have to ask ourselves, how can we cover those costs for people who simply can’t afford to participate in a loan or to make the changes themselves? And one thing that has been proposed that we have been calling for at Reep, along with many other organizations across Canada, is a national low-income energy efficiency program. And Efficiency Canada is a national level organization that has been one of the leaders in calling for that,” said Patterson.
Reep plans to bring the issue to the new regional council after the October 24 election.