On Bill Financing – Manitoba Hydro
A couple months ago, Ecolighten shared some of the broad strokes on innovative pay-as-you-save (PAYS) financing models that enable consumers to access capital to finance energy-saving home improvements while repaying cost of the loan through the energy-savings on property taxes or utility bills.
Yesterday, it was exciting to see the Government of Manitoba embracing this model with their announcement to launch an on-bill financing program in September 2012 to tackle more 65,000 homes in the province in need of energy-efficiency home improvements. So, how does PAYS and on-bill financing work? Well, it is based on the ‘golden rule’ that energy-savings must be greater than or equal to the financing cost of the measures. For example, if the utility costs on your house are $150 per month before improvements and $110 after improvements then depending on the size of project and loan, you would repay loan with your $40 monthly savings on your energy bill over a fixed period until it’s repaid in full. Aside from the financial benefits, you get to enjoy the comfort and health benefits that energy-efficiency improvements bring too.
Although full details of the program are still to come, the types of retrofits eligible for the program will likely include upgrades that will stay with the home, improve the energy efficiency and pay for themselves in a reasonable amount of time. So for Manitoba homes, much of the money will likely go to insulation, weatherization measures and heating upgrades.