Owners of aging multiresidential buildings in Montreal with an interest in decarbonizing their properties can now tap into a retrofit funding program run by Efficiency Capital and The Greater Montreal Climate Fund.

Named MultiRes, the initiative will have Efficiency Capital put up the capital for retrofits such as heat pumps to replace natural gas-powered heating equipment, rather than the building owner. Once installed, the equipment will generate cash flow for the program under a subscription model.

Montreal is phasing out natural gas as a source of heating in new buildings as part of its climate strategy. This could leave thousands of buildings stranded, as few owners can afford the shift from fossil fuels to electricity, Chandra Ramadurai, CEO of Efficiency Capital, told Sustainable Biz Canada.

MultiRes’s energy-as-a-service model will “combine capital, confidence and capacity,” he said, overcoming the cost barrier.

Any multiresidential building with six-or-more units in the Greater Montreal Area will be eligible, including Kanesatake and Kahnawake territories. Funding for individual buildings with less than six units will only be available if combined with several buildings under the same owner.

The project is Efficiency Capital’s first of its kind in Quebec.

How MultiRes will work

The partnership behind MultiRes involves local charity The Greater Montreal Climate Fund, which supports decarbonization efforts, and Efficiency Capital, the Toronto-based for-profit launched by the Toronto Atmospheric Fund.

To date, Efficiency Capital has over $100 million available in project funding across Canada. The Greater Montreal Climate Fund, Ramadurai said, will assist the for-profit in navigating local regulations, developing credibility and finding local partners.

When a building owner applies for funding, a MultiRes team will audit the building to assess what upgrades are needed, determine the budget and calculate expected savings.

Those improvements could include electrical-mechanical systems such as heat pumps, adding electric vehicle charging infrastructure, incorporating more insulation and adding a solar rooftop.

MultiRes will work with the owner to complete an investment agreement. Once signed, the retrofit will be installed. The building owner will pay for the equipment over a five- to 20-year term, while MultiRes will own the equipment. When the contract is fulfilled, the equipment will be handed over to the owner, Ramadurai explained.

A minimum of $500,000 in capital expenditure per building will be offered by MultiRes, with no ceiling on funding. Ramadurai said the maximum pool of funding is still being decided, but will likely be either $50 million or $100 million.

At $50-million worth of building upgrades, it is expect to save 200,000 tons of carbon over the lifetime of the equipment.

In addition to reducing the building’s carbon footprint, the upgrades make economic sense, Ramadurai said. In an example he gave, every $100,000 in energy savings leads to a $2.5-million increase in the valuation of the property.

How a pilot helped refine MultiRes

To ensure it was not importing a model that worked in Toronto but would not be successful in Montreal, a pilot project was undertaken by MultiRes in 2024.

“Every local market needs a different solution. Our philosophy is that we need to offer the clients what they need rather than what we have,” Ramadurai said.

After receiving interest from building owners, MultiRes chose three properties out of 70, each from a different market segment – private, not-for-profit and government-owned – to influence the direction of the program.

The pilot showed “we can’t have a one-size-fits-all solution,” Ramadurai said, as each building has its own quirks.

Another issue uncovered by the pilot was how the initial approach to focus on oil-heated buildings would not have a great impact, because there are few buildings in Montreal still heated by oil, and the buildings tended to be smaller. MultiRes was reworked to target both oil- and natural gas-based heating and to address larger buildings.

It was also initially concentrated for privately owned buildings, but has since branched out into any multiresidential building, whether private, non-profit or government owned.

As for future collaborations, Efficiency Capital’s goal is to have a multi-partner approach, Ramadurai said.

“We are working with other local partners to expand the program reach beyond Montreal,” he said. “We are looking to figure out if there are mechanisms to get other players in the market to come in as partners so that we can fund more of these projects.”