The incentive has been in place since 2005, thanks in part to the efforts of Jerry Dombowsky, a city supervisor.
"Back then hybrid vehicles were significantly more expensive than gas-powered cars," he says.
"At the time, the city was aggressively moving toward addressing our own greenhouse gas emissions.
We bought a fleet of 20 Smart cars for all the inspectors. Did they need to drive pickup trucks? We didn't think so."
To encourage residents to think the same way, Dombowsky and others convinced city hall to offer free municipal parking for hybrids and any other cars with a fuel efficiency rating of 5.9 litres or better per 100 highway kilometres.
So far about 460 parking passes for fuel-efficient cars have been issued, though Dombowsky says that doesn't count hybrid drivers who haven't bothered to register.
Dombowsky himself doesn't own a car; he's a cyclist and transit user. He notes approvingly that local dealerships have used the carrot of free parking to promote their hybrid models. According to one sales manager, it has helped drive local sales of hybrids.
"I drive a hybrid myself," says Steve White at Kelowna Toyota. "And everyone at the dealership uses my hybrid demo to get free parking if they have to go downtown."
White says sales of hybrid vehicles have been "very good." Along with the free parking at meter spaces and city-owned lots, he credits government rebates for hybrids and volatile gas prices.
It might work in Kelowna, but free parking here for hybrids would be a tough sell, according to Gwyn Thomas, president of the Toronto Parking Authority, an arm of the City of Toronto.
For one thing, a lot more money is at stake, he says. Kelowna parking revenues are $1.6 million annually, while the Toronto Parking Authority collects more than $102 million.
Another issue relates to local businesses. "I think if you offer free parking to anyone, you encourage discretionary use of parking," Thomas says.
That's his way of saying the philosophy in Toronto is to encourage short-term parking, which merchants and commercial outlets prefer to allowing people to park in the same spot for long periods without financial consequences.
In Kelowna, which has about 115,000 residents, Dombowsky says the view is the parking program actually helps local commerce.
Visitors who drive hybrids are pleasantly surprised to learn they enjoy parking privileges, he said.
Among them was the owner of a Smart car from Kamloops, a two-hour drive away.
"He went back to Kamloops and asked council to adopt our parking plan," said Dombowsky.
"When they said no, he told them he was going to do all his business and shopping in Kelowna."