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By Kate Standing
Published July 24, 2024 • 6 Min Read
Across Canada, heat pumps are rising in popularity as an energy- and cost-efficient option for heating and cooling our homes. Switching to a heat pump can reduce your household energy usage, as they can be three times as efficient as both gas furnaces and electric boiler heating. And beyond energy savings, heat pumps could also reduce your home’s greenhouse gas emissions: A recent report found heat pumps’ superior efficiency may help reduce the country’s annual household emissions by up to 19.5 million tonnes.
While heat pumps have been found to offer the lowest lifetime cost for heating and cooling in most Canadian households, one hurdle to more widespread adoption could be the upfront costs of installation, which are often higher than installing a new furnace. (Standard air-source heat pumps can cost approximately $9,000, with cold climate air-source heat pumps in the bracket of $10,000 and $19,000, and ground-source heat pumps ranging from $15,000 to over $30,000.)
With these prices, and the recent closure of the Canada Greener Homes Grant, which had provided Canadians with up to $5,000 in rebates on home energy upgrades, many homeowners are looking for ways to help cover the cost of a heat pump. The good news is that many provinces have their own rebate and financing programs, which could help to make heat pumps more accessible.
Let’s take a look at what’s available in your province, as well as today’s federal heat pump programs.
At the federal level, the government’s Oil to Heat Pump Affordability Program (OHPA) offers up to $10,000 for low-to-median-income households to switch from heating oil to a heat pump. Additionally, increased funding is available for homeowners in British Columbia, Nova Scotia, Newfoundland and Labrador, and Prince Edward Island to claim an extra $5,000 — bringing the maximum grant amount to $15,000. A $250 bonus payment is available to help with the associated costs of switching to heat pumps in these provinces.
The Canada Greener Homes Loan also provides heat pump financing from the federal government. It offers borrowers a 10-year interest-free loan between $5,000 and $40,000, which can be used for retrofits, like heat pump installations, recommended by an EnerGuide advisor.
The Clean Energy Improvement Program helps homeowners in selected municipalities to finance energy-efficient upgrades. The program, which includes heat pump installation, ties financing to the property, rather than the property owner, and repayments are made through property tax bills. The program provides competitive interest rates, long repayment terms, and the option to pay off the project’s balance at any time.
Through the CleanBC Better Homes and Home Renovation Rebate Program, eligible residents and homeowners in B.C. can claim up to $3,000 in heat pump rebates, as well as rebates for other energy-saving projects like water heating and building envelope upgrades. The province’s income-based CleanBC Better Homes Energy Savings Program can help make home upgrades more affordable for many residents, who can receive up to $19,000 to install a heat pump. Income-qualified homeowners in B.C. may also be eligible for up to $15,000 to switch from oil heating to a heat pump, as part of the federal Oil to Heat Pump Affordability Program.
Efficiency Manitoba provides rebates for heat pump installation structured around the square footage of a home and whether the homeowners chooses an air- or ground-source heat pump. In addition, financing through Manitoba Hydro’s Home Energy Efficiency Loan offers up to $5,000, which is paid back in monthly energy bills over a maximum repayment term of five years.
The Total Home Energy Savings program offers homeowners in New Brunswick incentives of $1,500 for eligible air-source heat pumps, $2,000 for ground-source heat pumps, $400 for mini-split heat pumps and $350 per indoor head for multizone heat pumps.
Residents of Newfoundland and Labrador can access financing through the takeCHARGE program. Eligible customers of Newfoundland Power and Newfoundland Labrador Hydro can access financing of up to $10,000 with financing terms of up to 60 months to install a qualifying heat pump. Income-qualified homeowners in Newfoundland and Labrador may also be eligible for up to $15,000 to switch from oil heating to a heat pump, as part of the federal Oil to Heat Pump Affordability Program.
The Arctic Energy Alliance (AEA) offers rebates of up to $20,000 for the installation of ground-source heat pumps.
Efficiency Nova Scotia offers rebates of up to $2,000 for eligible heat pumps. Income-qualified homeowners in Nova Scotia could also be eligible for up to $15,000 to switch from oil heating to a heat pump, as part of the federal Oil to Heat Pump Affordability Program.
Nunavut’s Home Renovation Program (HRP) offers homeowners in the territory a one-time forgivable loan of up to $100,000, or a grant of 50 percent of eligible costs up to $20,000, for energy improvements such as improvements to heating systems.
Ontario’s Energy Affordability Program (EAP) offers free cold climate air-source heat pumps for income-qualified individuals who own, rent or lease a residence in the province.
Homeowners in both Toronto and Ottawa can access regional programs to help finance home energy projects, including heat pump installation. Toronto’s Home Energy Loan Program (HELP) and Ottawa’s Better Homes Ottawa Loan Program provide loans of up to $125,000 with a payback period of 20 years.
Residents of P.E.I. may be eligible for a point-of-sale rebate of $1,200 for qualifying mini-split heat pumps. In addition, residents with an annual household income of $100,000 or less could be eligible for the province’s Net Zero Free Heat Pump Program. Income-qualified homeowners in P.E.I. may also be eligible for up to $15,000 to switch from oil heating to a heat pump, as part of the federal Oil to Heat Pump Affordability Program.
Quebec’s LogisVert Efficient Homes Program provides eligible homeowners with financial assistance of up to $6,700 to install a heat pump.
There are currently no rebates or incentives for heat pumps for residents of Saskatchewan. However, the province’s Home Efficiency Retrofit Rebate (HERR) provides up to $1,800 for other energy-saving projects, such as air-sealing, insulation and ENERGY STAR-certified windows and doors.
Homeowners with properties less than five years old are eligible for a rebate of $1,500 for the installation of a heat pump, while older homes are eligible for a rebate of 40 percent of the installation cost, up to a maximum of $8,000.
Learn more about ways to save energy at home and energy-efficient rebates in your province.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
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