New Energy Efficiency Agency Coming to Alberta

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The recent announcement of a new energy efficiency agency for Alberta is good news for the real estate sector as energy efficiency programs have a proven track record of helping consumers save money and increasing the value of real estate.

In fact, energy efficiency programs currently exist in every province in Canada and state in the U.S. except Alberta. This was discovered as part of research undertaken by the Alberta Energy Efficiency Alliance (AEEA), a grantee of the Alberta Real Estate Foundation.

“Energy efficiency programs have been saving consumers money since the 1970s,” sums up Jesse Row, Executive Director of the AEEA. “In Alberta, we’ve been funding energy efficiency programs just when there’s a government surplus, but the opposite approach is taken just about everywhere else.”

Research conducted by the AEEA has identified that most energy efficiency programs in Canada and the U.S. are funded every month through a modest charge on utility bills. The funds are then used to help households and businesses reduce their energy consumption and save three to four times more money than they cost.

“Most energy efficiency programs need to report publicly to an energy regulator to make sure they’re making good use of consumer dollars,” adds Row. “Not only have programs demonstrated a suitable return on investment for consumers over the years, provinces and states have increased their funding as they’ve seen that energy efficiency is the cheapest way to meet increasing energy demand.”

More recently, energy efficiency programs have also been used to stimulate the economy and create jobs during economic downturns. During the last recession and recovery in the U.S., numbers compiled by the AEEA show that funding for energy efficiency programs went from US$3 billion in 2007 to US$8 billion in 2011. This funding increase happened at both the state level and through the U.S. federal government (mainly though the American Recovery and Reinvestment Act). Not only did energy efficiency programming in the U.S. increase during their last recession, it has maintained this level of funding as states continue to see a strong return on these investments.

For the real estate sector, the launch of an energy efficiency agency in Alberta creates opportunities to deliver more value-added services to clients. Energy efficiency programs in other provinces and states are very popular with households and businesses. These programs typically provide direct support for consumers, including financial incentives, to save energy through a combination of behaviour changes and physical upgrades to properties. The real estate sector is ideally positioned to help consumers take advantage of these new programs.

Once these programs are in place, the benefits to Alberta’s real estate sector are significant. A recent study commissioned by the AEEA shows that even an average-sized energy efficiency program for Alberta has the potential to result in over $200 million in additional energy efficiency upgrades to homes and buildings in the province each year. These investments lead directly to increased property values and over $500 million in annual energy bill savings for consumers. These savings can then be reinvested into other parts of the economy and create additional economic benefits for the province.

Keep up to date on the latest energy efficiency developments in Alberta through the Alberta Energy Efficiency Alliance (LinkedIn, Twitter, Facebook) or by signing up for an AEEA membership.

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Energy Poverty in Alberta

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A surprising number of Albertans are being left out in the cold… inside their own homes.

They are the energy poor, those hard pressed to pay their utility bills. Living in cold, damp homes impacts their health and well being, especially the elderly, young, disabled and those with long-term illnesses. Needless to say, they can ill afford the energy-efficiency measures that would improve their lives and benefit the environment.

About 455,000 Albertans live in energy poverty. These low-income families spend three times more disposable income on home energy—heating, cooking and lighting—than the average household. For the poorest, it’s more than 9 per cent of their after-tax income.

The energy poor must often make difficult choices between competing necessities such as energy, water, food and clothing. The most dramatic choice for some is to “heat or eat.” Indeed, evidence suggests the poorest households, especially among seniors, spend less on food in winter to pay for additional heating.

Living in cold homes can contribute to heart disease, reduced lung function, suppressed immune systems, asthma attacks and exacerbated arthritis. It is also associated with increased stress, social isolation and, for children, impaired educational success.

Energy poverty thus results in increased public costs for health care and social services. One study suggests that every $1 spent on raising living temperatures to acceptable standards saves 42 cents in health-care costs.

Alberta’s energy poor could also be disproportionately impacted by any changes to the provincial government’s climate-change policies. Such changes will likely lead to increased energy prices, hurting poorer households, which ironically emit fewer greenhouse gas (GHG) emissions than the norm.

The most cost-effective, sustainable solution to this problem is to increase the energy efficiency of energy-poor households, starting with those most in need. Realistically, this can only happen with substantial subsidies.

Many jurisdictions in Canada and the U.S. operate and fund energy efficiency and conservation programs for low-income households. In Calgary, All One Sky Foundation has for several years operated a demonstration Energy Angel program, which provides energy-efficiency upgrades to the homes of low-income seniors.

But this is just a start for what needs to be a much more widespread effort. Tackling energy poverty in Alberta offers a potential win-win-win for three important environmental and social policy agendas: climate-change mitigation and greenhouse gas reduction; health and well-being; and poverty alleviation.

Read All One Sky Foundation’s “Energy Poverty – An Agenda for Alberta” report here.

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*Image: Helen Corbett, Executive Director of the All One Sky Foundation with Alberta Real Estate Foundation Past Chair Gary Willson.