A PACE Program in Alberta: An Analysis of the Issues

• Published in: The School of Public Policy publications (Online) 2019-04, Vol.12
• Main Author: Khanal, Mukesh
• Format: Article
• Language: English
• Subjects: Alternative energy sources; Carbon; Clean technology; Emissions; Energy consumption; Energy efficiency; Energy resources; Funding; Green energy; Greenhouse effect; Greenhouse gases; Legislatures; Loans; Mayors; Municipalities; Payback periods; Pension funds; Property taxes; Renewable resources; Tax refunds
• ISSN: 2560-8320; 2560-8312; 2560-8320
• DOI: 10.11575/sppp.v12i0.62862

In December 2015, Canada participated in the COP21 Paris meetings, “committed to reducing greenhouse gas emissions, to be a leader in the transition to a low-carbon and climate resilient economy,” and to contribute towards reducing global temperature increases (Barter 2016). In Alberta, the Climate Leadership Plan has a number of key action points, including “putting a price on greenhouse gas emissions … ending pollution from coal-generated electricity by 2030 … developing more renewable energy” (Government of Alberta 2018b). Initiatives in “consumer rebates, supply chain incentives, and innovative financing options” can help achieve the federal and provincial targets (Advanced Energy Center 2016, 10). However, energy efficiency upgrades and renewable energy projects are major undertakings and require significant capital investments. A widely held view by environmental advisors, such as Harrington and Heart (2014), is that loans to finance such capital investments are difficult to obtain from traditional lenders. Bill 10: An Act to Enable Clean Energy Improvements was introduced in the Alberta legislature on April 12, 2018 “to let municipalities establish a Property Assessed Clean Energy (PACE) program that would make it more affordable for Albertans to upgrade their properties without having to put money down” (Government of Alberta 2018a). The Alberta government lists four steps that property owners will have to take to access the PACE program. First, property owners will have to decide what clean-energy upgrade they want for their property. Second, property owners, then, sign an agreement with the municipality to repay a loan to finance the upgrade through an annual surcharge on their municipal property taxes. Third, property owners will have to find an approved contractor to carry out the upgrades. Fourth, property owners pay the loans through property taxes and “the municipality passes that on to the lender” (Government of Alberta 2018a). See also Jensen (2018) for a capsule summary of how PACE programs work and their pros and cons. Bill 10 passed on June 6, 2018 and the Alberta government announced that it would bring forward regulations for approval by the fall of 2018 and develop a PACE program in partnership with Energy Efficiency Alberta, an agency of the provincial government (Government of Alberta 2018a). The program “will front the cost, using private capital from a bank or pension fund partner” (Stolte 2018). However, as of February 2019, the