4. Program Launch
The Entity, as Program Administrator, would be responsible for the development of a viable Business Plan, based on the Business Case, that included additional market research and risk assessment, prior to program launch.
4.1 Business Plan
To develop a strong business case, elements of a business plan were considered. The Entity would require reasonable resources to complete its due diligence, including supplemental market testing and program risk assessment, to finalize a R-DEER Business Plan for the approval of its Board of Directors.
Several key aspects of the R-DEER program will be further refined during the development of the final Business Plan including:
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Conduct additional market research (e.g., the impact of age and income) to refine the size of the market for standardized deep energy retrofits.
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Identify strategies to grow a new market for standardized deep energy retrofits through targeted community engagement.
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Continue to learn from the experience (e.g., data and tools) of previous energy conservation programs in Ontario and other jurisdictions in Canada and Europe, recognizing “business as usual practices” are part of the market problem to be solved6.
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Detail how to promote or integrate other government and utility energy conservation or fuel switching programs (power/water/waste) on an ongoing basis.
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Address the accessibility of the program for harder to serve segments of the residential sector (e.g. low-income homeowners and seniors on fixed incomes).
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Address how a changing regulatory environment and technical advances will be incorporated over time into the standardized package to optimize energy savings, emission reductions and residential savings.
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Gain further stakeholder input in the development of the detailed Business Plan with a specific focus on the real estate sector to both identify homeowners planning extensive renovations and benefit from enhanced property values
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Confirm and adjust financial assumptions recognizing these would also be updated in annual business plans.
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Address how capacity and expertise can be developed within the City to meet the goals of the plan.
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Refine the education and awareness approaches that will be part of the home energy retrofit program, recognising behavioural shifts will be necessary to ensure energy savings are maintained.
4.1.1 Program Set-Up Costs
The R-DEER Business Case estimated initial net start-up and working capital, defined as maximum negative cash flow, will be about $580K. In 2020, there are 6 months of organisation costs with no countervailing retrofit revenues. In 2021 the retrofit activity supports about half of the organisation costs, and by 2022 organisation costs are fully covered. In subsequent years, the Entity generates profit. A faster start up would reduce the net start-up working capital required.
6 Enbridge and Enwin have collected considerable current-market data from the residential sector through Conservation and Demand Management programs and energy retrofits which would be a valuable input to the final R-DEER Business Plan.