Energy Retrofit Loans

Through the Energy Retrofit Loan (ERL) program, the City offers fixed, long-term, low-interest financing to enable building owners to invest in low-carbon, energy-efficient capital improvements.

Highlights include:

  • Financing for up to 100 per cent of project costs at a rate equal to the City’s cost of borrowing, with repayment terms up to 30 years for qualifying projects
  • Funds are advanced at project start
  • Unsecured loans may be available
  • Up to one-year interest free and payment free
  • Support to access utility incentives and federal grant programs

 

Note: Building owners seeking financing for retrofit projects through the ERL program are required to submit a feasibility study for their building. The study requirements are detailed below, and includes a comprehensive long-term decarbonization plan that goes beyond the specific retrofits for which they are requesting financing.

All buildings located in Toronto are eligible, including:

  • Commercial, retail and industrial
  • Multi-family residential
  • Condominium (common areas only, not individual units)
  • Social housing
  • Hospitals and long-term care
  • Schools, colleges and universities
  • Not-for-profit
  • Hospitality

Authorized third-parties are eligible to apply on behalf of the building owner. Funds will be dispersed to the building owner.

Eligible measures/technologies include:

  • Heat pumps
  • High-efficiency boilers, chillers and HVAC systems
  • Building envelope
  • Building automation systems and controls
  • Lighting
  • Renewable energy systems
  • Energy/battery storage
  • Fuel switching
  • Other retrofit measures/technologies

Step 1: Enrollment in the City’s Navigation and Support Services Program

To begin the process please visit the City’s Better Buildings Navigation Resource Hub
and complete the application form. City staff will contact you to inform you of next steps.

Step 2: Detailed Application

Eligible applicants will be invited to complete a detailed application to verify the project energy and carbon savings and create a business case.

Minimum documentation requirements include:

  • Two years of audited financial statements
  • Detailed project summary:
    • Description of existing facility (ASHRAE Level 2 or equivalent)
    • Detailed project budget
    • Project management plan
  • Feasibility study:
    • Developed by a qualified third party, such as a Professional Engineer (P.Eng), Certified Energy Manager (CEM) or equivalent.
    • Description of each proposed individual retrofit measure(s)
      • Equipment details (manufacturer and model)
      • Specification sheets (if available)
      • Drawings
      • Estimated energy savings
      • Estimated utility cost savings
      • Estimated greenhouse gas (GHG) emissions reduction
      • Building decarbonization plan that demonstrates a minimum of 60 per cent GHG emissions reduction by 2040 using 12 months of recent continuous energy data as a baseline:
        • Outline retrofit measures, including associated GHG emission reductions and energy savings
        • Measures shall include fuel switching and envelope improvements
        • Include a timeline for implementation of retrofit measures
        • Carbon offsets cannot be applied to meet the GHG emission reduction target
    • Other documents, as required.

    Step 3: Technical and Financial Review

    City staff will review your application and develop a business case to determine funding eligibility.

    Step 4: Funding Agreement

    Once your detailed application is approved, the City will create a Funding Agreement that sets out the terms of the agreement between the building owner(s) and the City of Toronto. The Agreement must be signed by both parties.

    The interest rate specified in the Agreement will be valid for a period of 60 days, after which the rate will be updated to reflect the City’s current cost of borrowing.

    Sample agreements can be made available for relevant projects.

    Step 5: Fund Disbursement

    Funds will be disbursed to the building owner, as outlined in the Funding Agreement.

    The City offers fixed-rate financing for up to 100 per cent of project costs for terms up to 30 years. Funding limits will be determined by a business case assessment.

    The interest rate will reflect the City’s cost of borrowing. As the City’s cost of borrowing varies daily, the actual interest rate cannot be confirmed until the loan is approved.

    For questions or to obtain the current rate, please contact us at bbp@toronto.ca.