ecoENERGY Retrofit – Progress After 30 Months? – 1

As a home owner in Canada concerned about my own finances and about the environment, I became interested in the Canadian Federal Government’s ecoENERGY Residential Retrofit program.

In case you are now aware, this program, provides monetary incentives to Canadian home owners to improve the energy efficiency of their homes through specific measures. It is further supported by Provincial governments with (generally) matching grants.

We have participated ourselves, going through the initial and the follow-up energy audit (called energy efficiency assessments), undertook some of the recommended energy efficiency measures specific to our home from the first energy audit’s report, and have received both the Federal and matching Provincial grants.

You can read about our experiences as well as see parts of the energy audit report we received by accessing here our ecoENERGY page of our site.

We have also written about the performance of the ecoENERGY Residential Retrofit program. Those in Ontario have their own example (with the eHealth spending scandal) about the efficiency and usefulness of government programs. So, with an interest in the ecoENERGY Retrofit program, we continue to follow it.

To review the statistics and our analysis thereof on the 2 year ecoENERGY Retrofit anniversary, simply access the first of our 4 part series we wrote earlier this year.

Now, before we review the statistics over the 30 months of the Program, there are in my opinion 4 significant macro type of events which could impact any change with the participation levels of this program. First we will identify two macro type events which likely will have a negative impact on the incentive for households to participate in the ecoENERGY Retrofit program, followed by the two which will likely have a positive impact on the participation incentive

Loss of Employment

It is a recession when your neighbour looses their job; it is a recession when you do. The number of full time jobs lost since the fall of 2009 will have provided less disposable income (defined by me to be money left over from wages after income taxes, mortgage, utilities, food, clothing, etc. The more families which have an income earner who has lost his / her job, the more families which will be unable to fund energy conservation improvements to their home as this is funded by the family’s disposable income.

Decrease in Oil, Home Heating Oil and Natural Gas Prices

One might think that lower home heating bills and lower prices at the gas pump for the family’s car (s) would provide surplus disposable income which the household could use to spend on energy efficiency improvements. However, very few if any energy efficiency improvements like sealing air leaks,  a high efficiency furnace or central air conditioner, ENERGY STAR windows, improved attic insulation, etc. provide a financial payback of one year or less, including net of all possible ecoENERGY Retrofit grants.

To me, the lower oil, natural gas, etc. energy resource prices over the past 6 to 9 to 12 months have provided less motivation for households to invest in these home energy efficiency improvements.

25% Grant Increase

This two year (or until the additional $300 million in funding) increase in the amount of the available grants took effect April 1, 2009. I have stated before that Canadian families need much faster financial payback on their energy efficiency investments made with the family’s disposable income. The 25% increase in grant amounts should increase a family’s motivation to participate.

Home Renovation Tax Credit (HRTC)

This is the Canadian Federal Government’s temporary program to motivate Canadian households to spend money on home renovations by offering a 15% income tax credit on eligible renovation expenditures incurred after January 27, 2009 and before February 1, 2010. Many of the investments under the ecoENERGY Retrofit program are also eligible to receive the HRTC. Double dipping. More financial incentive to increase the motivation of Canadian households to participate in the Program.

Are the two negative macro events greater in impact than the two positive macro events? I’ll leave that up to the reader and economists. They are, however, significant.

While we do not have statistics on their individual Program impact, they should be kept in mind in any analysis.

With that background, we start our review of the 30 month performance of the ecoENERGY Residential Retrofit program.

To continue towhere we start to review the ecoENERGY Retrofit’s progress after 30 months, simply select this link to Part 2.

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