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Homeowners applying for the federal government’s interest-free loans to make energy-efficient renovations should look into provincial and municipal incentives for extra support, one energy-efficiency expert recommends.

The federal government launched a long-awaited program in mid-June providing interest-free loans of up to $40,000 for home retrofits — things like replacing fossil fuel heating systems, fixing drafty windows and doors, upgrading wall insulation or installing solar panels.

With rising interest rates, this loan should be enticing to people, but making your home as energy efficient as possible will likely cost more than $40,000, said Brendan Haley, policy director of Efficiency Canada. Depending on the building, you could be looking at over $100,000 in costs, he said.

“I would really encourage anyone looking for support for a retrofit, especially a deep retrofit, to not only think about this program but also to look at provincial incentives and perhaps additional loans,” Haley told Canada’s National Observer.

Deep retrofits are necessary to help cut down on greenhouse gas emissions from homes. Buildings and homes accounted for 13 per cent of Canada’s carbon emissions in 2020, and retrofit programs are part of the federal government’s push to achieve net-zero emissions by 2050. While the upfront cost of these renovations can be daunting, homeowners who take the plunge will save money in the long run by cutting their energy costs.

How it works

The federal program is designed to help up to 175,000 households make energy-efficient home upgrades with interest-free loans ranging from $5,000 to $40,000 that must be paid back within 10 years. A maximum of 15 per cent of the loan can be delivered upfront for down payments to contractors. The rest of the loan comes after a post-retrofit evaluation is completed. Natural Resources Canada advises homeowners to get up to three cost estimates for all the different retrofits they want to do because once the loan amount is determined, it will not be increased.

Who is eligible?

Homeowners who have already applied or are applying to receive the $5,000 Greener Homes Grant are eligible for the first phase of the Greener Homes Loan program. All Canadian homeowners can apply, with a maximum of one loan per eligible household. Applicants must get an EnerGuide assessment — an audit that looks at the energy efficiency of a home — done to determine what retrofits are appropriate for their home. The loan can only be used for retrofits and installations that are both recommended by an energy adviser and listed on Natural Resources Canada’s website.

Homeowners applying for the federal government’s interest-free loans to make energy-efficient renovations should look into provincial and municipal #retrofit incentives to achieve maximum #EnergySavings, @br_haley of Efficiency Canada recommends.

Canadians can fill out a short online survey to see if they qualify for the grant and loan.

Provincial and municipal incentives

The federal loan and grant programs were designed to ensure homeowners can take advantage of other financial incentives, Mirabelle Ibalanky from Natural Resources Canada’s media relations said in an email.

The department’s directory of energy efficiency programs for homes lets Canadians search for programs based on location and other criteria to help them take full advantage of different programs.

In Quebec and Nova Scotia, the federal home retrofit programs are delivered through provincial partners: RenoClimat and the EfficiencyOne Home Energy Assessment Program, respectively.

British Columbians looking to switch their home from a fossil fuel heating system to a heat pump can apply for five-year, interest-free loans of up to $40,000 through CleanBC Better Homes. Across the country, provincial utilities often provide incentives such as discounts on new equipment, like BC Hydro’s rebates for appliances like fridges and washing machines.

Efficiency PEI offers free heat pumps for low-income Islanders and heat pump, door, window and insulation rebates.

Many municipalities also offer financing solutions for homeowners. Toronto’s Home Energy Loan Program offers zero- and low-interest loans of up to $125,000, repaid over a 20-year term, for home energy improvements like insulation, heat pumps and window replacements.

On Thursday, the Better Homes Ottawa Loan program received $30 million from the Vancity Community Investment Bank to continue offering 20-year, low-interest retrofit loans from $15,000 to $125,000. A similar pilot program is expected to start in Calgary this fall, offering $50,000 loans to be repaid within 25 years.

Many municipal programs are set up so owners repay the loan to the municipality via their property taxes. If the property is sold before the loan is repaid, the new homeowner takes on the remaining cost but will benefit from the home’s increased energy efficiency and savings, according to a joint press release from the City of Ottawa and Vancity.

Canada has yet to create a policy framework that makes retrofits easy and turnkey, said Haley. He hopes efforts will be made to achieve that gold standard but in the meantime, he encourages Canadians to research provincial and municipal support that complements the federal programs so they can maximize their energy savings.

Natasha Bulowski / Local Journalism Initiative / Canada’s National Observer