Energy efficiency adds value to the purchase of a new home – after all, who wouldn’t want lower utility bills? Unfortunately, it often takes a back seat to other upgrades such as more square-footage or aesthetic features. What if energy efficiency upgrades could be financed alongside these other features instead of competing with them?

This project - funded by the Alberta Real Estate Foundation, the Federation of Canadian Municipalities, Alberta Ecotrust and BILD Alberta – took a look at different options for specialized financing of energy efficiency upgrades for new homes in Alberta.

The results can be boiled down into a handful of key points:

- There is interest from home builders, lenders and municipalities to make it easier for homeowners to purchase high efficiency homes.

- The upfront cost of energy efficiency upgrades remains a barrier.

- Easy access to specialized financing for efficiency upgrades, among other supports, could increase the demand for high efficiency new homes – unlocking utility bill savings, lowering emissions and adding value to the real estate sector.

- Two leading options for specialized financing were identified:

1. Property-tied financing (aka PACE) similar to the Clean Energy Improvement Programs (CEIP) already financing energy retrofits in several Alberta municipalities

2. Traditional mortgage with enhanced terms (e.g., longer amortization and/or lower interest rates)

- Both of these options have opportunities and challenges when it comes to noticeably increasing demand for high efficiency new homes: see the full report for more details.

Overall, this work has demonstrated an interest and several opportunities for increasing the demand for high efficiency new homes through specialized financing. Additional work will be needed, however, to further advance one or both options.

Are you interested in working on the advancement of specialized financing for new homes? If so, contact us at www.aeea.ca/contact. You can also hear more about the project during a webinar on November 6, 2024. Click here for more information and to register.