Seed funding of approximately $400,000 would be required to establish the Entity and provide it with adequate resources to finalize the Business Plan which would include the hiring of a General Manager. The PWT recommends the City apply for funding to support the next steps. The upcoming FCM Community Eco-Efficiency Accelerator Program is one grant that may assist with these start-up costs. These start-up costs are at risk should the Entity be unsuccessful in finalizing an approved the Business Plan.

The long-term working capital requirements for the Entity to fully launch the business, whether from the City and/or private investors, would be contingent upon the final Business Plan.

Standardized Deep Energy Retrofit Packages

The current energy efficiency retrofit market for homeowners and contractors is relatively unattractive. From the perspective of the contractor, the effort to prepare customized proposals is high and the closing rate is low. Low volumes and the fact that every project is specific to each household means that material costs are expensive and performance guarantees are risky. From the homeowner’s perspective, obtaining understandable bids from various contractors is burdensome. They are responsible for finding their own sources of funding based on their individual credit rating. Finally, the low volumes result in retrofit costs that typically exceed the value of the energy savings, even over many years.

The R-DEER product solution to address this market problem is to offer standardized energy retrofits to homeowners at high volumes. Contractors benefit from increased project predictability, improved margins and vastly higher project volumes. Homeowners benefit from a simplified transaction, guaranteed pricing, lower cost pre-financed retrofits, and a simple billing and payment mechanism.

Standardized retrofit packages would be designed by the Entity to deliver annual energy savings of 30 to 50%, and 20% water saving to homeowners. Modelling for the R-DEER Business Case demonstrated these savings could be achieved with existing technologies. The package cost would be dependent on home size, age and type. Using pricing based on a fixed index per specific area ($ per m2) depending on home category, minimizes transaction costs and complexity.

Concerns were expressed during the engagements from some stakeholders as to whether enough homeowners would be interested in a standardized retrofit valued at $25,000 to $30,000. Additionally, many Windsor residents have already completed partial retrofits through previous government and utility programs and may not be eligible for the full program. These concerns will be addressed during the final Business Plan, along with considering any “go-to-market” strategies that would mitigate prevailing market conditions.

The creation of an Entity provides an additional delivery vehicle for the City’s Basement Flooding Protection Subsidy Program. It is estimated that 80% of the program’s retrofits will qualify for the subsidy program. The homeowner will benefit from Entity-managed contractor cost and quality control and the City will benefit from increased uptake of the program.

The delivery of standardized retrofits at high volumes to Windsor homeowners is an essential feature of the Business Case and has been designed to drive market transformation. The business model reduces the cost of the average retrofit by 33%. This is achieved through efficiencies in: