Heat pump programs see spike in uptake in Atlantic Canada

A push to get more Atlantic Canadian households less reliant on home heating oil by switching to electric heat pumps has been showing early signs of success, according to officials in three of the four Atlantic provinces.

They say more homeowners than ever are applying to government programs that offer financial support to install heat pumps — a development they say is thanks in part to the government programs.

But significant spikes in furnace oil prices in the region are also playing a key role in program uptake.

Last fall, the federal government announced enhancements to the Oil to Heat Pump Affordability (OHPA) program for provinces that co-deliver heat pump grants with Ottawa in an effort to get more homes that heat with oil to switch to heat pumps.

Previously, Canadian households with low-to-median incomes that used furnace oil could receive up to $10,000 from Ottawa to help purchase and install a new air-source heat pump.

In October, the federal government upped that amount to $15,000 and promised homeowners who signed up a one-time bonus payment of $250 to help defray the cost of heating oil while they wait for their new pump to be installed.

Currently, only residents of Nova Scotia, Prince Edward Island and Newfoundland and Labrador are eligible for these OHPA enhancements, as these are the only jurisdictions with existing co-delivery agreements with Ottawa for heat pump grants.

Ottawa is still finalizing the finer points of the agreements with these provinces but, in the meantime, East Coasters are signing up.

“Certainly we’ve seen a big increase in program participation and program interest,” said Janet Tobin, a spokesperson for Efficiency Nova Scotia.

“Since that initial fall announcement was made, we’re seeing folks that are already in the stream asking how they can access that (enhancement) and then also new folks continuing to roll in applying for the program and accessing the program every day.”

Tobin said she could not provide the number of applications in Nova Scotia received so far but did say there has been a “doubling, tripling and quadrupling” of applications for many of the rebates and programs offered by Efficiency Nova Scotia over the last two years.

This has led to longer wait times for those trying to access support through these programs. Previously, some programs took two to three months to access, while that has now increased to six to eight months.

“We’ve put a lot of processes in place internally to ensure that we’re processing things as quickly as we can . . . but industry is having challenges with capacities right now,” Tobin said, pointing to nationwide shortages of contractors and construction labour.

In Prince Edward Island, heat pumps have also been growing in popularity, thanks to provincial rebate and grant programs that have been growing over the last few years.

Since the federal enhancements were announced in the fall, interest has only grown, says Derek Ellis, director of sustainability with the provincial environment department.

A total of 10,000 heat pumps have been installed in P.E.I. since 2021, he said.

“P.E.I is the most dependent on home heating oil for residential space heating of any province in Canada, so given those factors and the affordability benefits that come with heat pumps, it’s fairly obvious why Islanders have taken the plunge.”

No one from Newfoundland and Labrador’s Environment Department was made available for an interview, but in a statement to Saltwire it said, as of Jan. 19, the province had received over 1,700 applications to its “oil to electric incentive program,” which was described as a “significant increase from prior years.”

Over 900 applications have been preapproved, with nearly 250 conversions completed, the statement said.

Ottawa’s beefed-up grant announcement last fall came in conjunction with Prime Minister Justin Trudeau’s controversial decision to pause the federal carbon price on home heating oil for three years, a call he said was needed to allow homeowners who heat with oil time and financial aid to transition to heat pumps.

A higher proportion of homes in the Atlantic region rely on furnace oil than in any other part of Canada, and over the last two years volatile oil prices have also hit the region particularly hard.

For example, home heating oil prices in Canada in 2022-23 were about 30 per cent higher than in 2020-21. Nova Scotia saw a 70 per cent increase in the cost of home heating oil last year, compared with 2020, according to federal data.

That’s why Ellis said the federal enhancements are likely helping convince some people to convert to electric heat, but oil prices are likely an even bigger factor.

“Ahead of that (federal) launch, we had really good uptake — no secret, perhaps, why with the high oil prices and helping with saving Islanders money,” he said.

“Between all of those factors, it’s kind of a perfect storm here to have a really successful program.”

But some climate change advocates say provincial and federal governments are not doing enough to help Atlantic residents already struggling with lower incomes and high rates of energy poverty to afford switching to renewable energy options.

More government investment is needed to make options like heat pumps more affordable for everyone, said Katherine Turner, energy co-ordinator at the Ecology Action Centre in Nova Scotia.

“I think we’ve seen a lot of rhetoric over the last few years, and specifically over the last six months, about efficiency upgrades and heat pumps, and that’s really awesome to get that kind of attention for it,” she said.

“But what I think people really deserve is concrete policy change, which is kind of where we’re lacking right now.”

The biggest barrier for homeowners to switch to renewable energy is cost, Turner said. That’s why the Green Budget Coalition, made up of over 20 provincial, national and international environmental and conservation organizations, has been calling for a federal commitment of $20 billion over five years for energy efficiency programs for low- and moderate-income households.

“This is a climate crisis. This requires effort from everybody and co-ordinated effort, but I really do believe that the government has a strong role to play in this, especially when it comes to helping folks make these changes more affordable.”