April 2014
Toronto offers an energy efficiency program to help condominiums implement energy efficiency measures.
TowerWise, a program offered through Toronto Atmospheric Fund (TAF), invests in your energy retrofits with a goal of achieving energy efficiencies. TAF arranges for equipment financing in return for contractual payment as a percentage of verified savings. Once the contract term is complete, all savings accrue to the condo corporation.
This is an innovative financing approach that is not a loan. If energy savings do not arise from the energy retrofit then you don’t pay.
The City of Toronto established Toronto Atmospheric Fund in 1991 to focus on reducing local greenhouse gas and air pollution emissions. They have dedicated time and money to coming up with creative approaches to reining in energy waste and reducing Toronto’s carbon footprint.
The TAF Energy Savings Performance Agreement, or TAF ESPA, is a unique approach that addresses many of the concerns condo owners have about large scale energy efficiency programs. This program has been in development for many years and was introduced in 2013.
Owners of condo buildings are aware that predicted savings may not be achieved and are generally reluctant to adopt vendor recommendations that require a significant capital outlay. With TAF ESPA this skepticism is unnecessary. TAF will identify the annual savings, purchase necessary equipment and provide financing. Engineers provide assurances that savings will materialize.
Under this program, up to 90% of savings are returned to TAF until the end of the contract term. This is typically in the range of 7-10 years. Once the contract term is complete, all future savings are retained by the condo corporation.
This program has been designed so that it does not affect the reserve fund or operational budget.
The condo corporation is required to maintain equipment at a satisfactory level as identified by the TAF engineer. Since more than 50% of all energy retrofits underperform after 5 years, the program requires proper equipment maintenance to ensure continued efficient operation.
TAF consultations have revealed that building owners feel they are left carrying the majority of risk when implementing energy retrofits. A major concern is not achieving projected savings which are necessary to financially justify an energy retrofit. This explains the reluctance of many condo corporations to undertake energy efficiency projects.
TAF alleviates these concerns through savings guarantees and other methods.
TAF does not mince words when they say that “money talks”. They understand that the most effective approach to energy conservation is to demonstrate that conserving energy is profitable. Only in this way do they see the market as helping to address climate change by reducing the GTA’s emissions.
As the cost of energy rises, making your building more energy efficient just makes sense. Energy efficiency can reduce utility bills by 15%-30% and sometimes more. Energy retrofits pay for themselves. They can also reduce greenhouse gas emissions.
Energy efficiency projects can sometimes have large up-front costs. TAF removes this financial barrier.
TAF’s program shows that investing in energy efficient retrofits yields a respectable rate of return for building owners. Savings are passed along to building owners in the form of reduced energy consumption as evidenced by savings on the energy bill.
The TAF Energy Savings Performance Agreement is a unique way to fund a condo energy retrofit. Funds covering 100% of costs are provided for this purpose. The contract ensures that all payments are based on energy savings. If energy savings do not arise from the energy retrofit you don’t pay. Under a TAF ESPA, TAF invests directly in your energy efficiency measures. The condo corporation signs a contract requiring payment as a percentage of verified savings. All savings beyond the contract term belong to the condo corporation.
Information about the Toronto Atmospheric Fund can be obtained by contacting Tim Stoate, VP Impact Investing, at tstoate@tafund.org or visiting www.toatmosphericfund.ca. Information about TowerWise is available at www.towerwise.ca.
