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Questions raised about Ontario's two-tiered heat pump program

An HVAC technician working on a heat pump. Photo by welcomia / iStock

Despite the urgent need to cut greenhouse gas emissions, Ontario's newest round of heat pump initiatives is seen by environmental advocates as falling short. 

The Save on Energy program limits eligibility to homes already using electric heating, excluding gas-heated households dependent on Enbridge. Critics argue this initiative prioritizes limiting electricity demand, rather than promoting sustainable alternatives — and reflects the Ford government's tendency to rely on fossil fuels and reluctance to support a genuine energy transition.

Keith Brooks, programs director at Environmental Defence, said offering incentives for people to switch from inefficient baseboard heaters to heat pumps is a sensible way to get people more affordable heating and cooling. 

But since the incentives do not apply to people with gas heating, the contribution to lowering planet-heating carbon emissions is limited. “And that's really the most critical thing,” Brooks said. “We need to ensure that every home currently burning fossil fuels for heating transitions to heat pumps when it's time or when they are close to replacing their furnace.”

Mary Bernard, supervisor of residential program performance at the Ontario Independent Electricity System Operator, said the program, which gives some Ontarians from $5,000 to $10,000 toward replacing old-style electric heating with more efficient heat pumps, aims to ease pressure on the electricity grid in areas facing urbanization and population growth. By targeting regions with high demand, the program will lower electricity consumption and defer the need for costly new transmission lines. Transitioning from electrically heated baseboards to heat pumps can significantly reduce grid demand.

According to the Ontario Ministry of Energy and Electrification, the province invested $8.2 million in a separate program called the Clean Home Heating Initiative (CHHI) through Enbridge, benefiting 1,500 customers in the eight municipalities of London, St. Catharines, Peterborough, Sault Ste. Marie, Pickering, Ajax, Whitby and Barrie. This initiative allows homeowners to install air source heat pumps alongside their existing gas furnaces, reducing carbon emissions and utility costs. The government says the Clean Home Heating Initiative is spread between a few northern and southern communities to test the hybrid heating system in different climates.

Brooks said the two-tiered incentive programs are not surprising coming from a government that is not fully committed to moving away from fossil fuels. Photo submitted. 

The CHHI program, which was announced in 2022, offers incentives ranging from $3,000 to $4,500 for gas-heated homes to transition to various types of heat pumps.

Advocates, however, believe more incentives are needed. Jack Gibbons, chair of the Ontario Clean Air Alliance, urged the Ontario Energy Board to require Enbridge to increase rebates for cold climate air source heat pumps to at least $5,000, citing the high costs of these systems, which range from $15,000 for air source to $30,000 for ground source heat pumps.

Critics argue this initiative prioritizes limiting electricity demand, rather than promoting sustainable alternatives — and reflects the Ford government's tendency to rely on fossil fuels and reluctance to support a genuine energy transition.

Brooks said the two-tiered incentive programs are not surprising coming from a government that is not fully committed to moving away from fossil fuels. He pointed to legislation introduced earlier this year — the Keeping Energy Costs Down Act — which overrode decisions by the Ontario Energy Board (OEB) that would have limited Enbridge’s funding for gas expansions. The legislation allows the provincial government to reverse OEB decisions that block Enbridge's funding for gas expansions through increased customer rates, diminishing the regulator’s independence. 

This move, Brooks argued, prioritizes the interests of Enbridge over meaningful clean energy progress. 

“This government is helping Enbridge — in fact, legislating and contributing financial resources to ensure that more and more homes are connected to gas, instead of incentivizing people to switch to heat pumps.” 

Brooks said the provincial government should offer more substantial support, similar to programs in other provinces like British Columbia. He noted that Ontario could collaborate with the federal government to deliver a more impactful heat pump program.

Heat pumps are significantly more efficient than baseboard heaters, and despite the upfront costs, homeowners would save money over time due to their efficiency, Brooks said. He suggested offering homeowners interest-free loans to help reduce the financial burden on homeowners willing to make the switch, knowing they will offset their costs over time.

The Independent Electricity System Operator’s Pathways to Decarbonization Report predicts that Ontario might need to spend $400 billion to more than double its electricity generation capacity — from 42,000 megawatts today to 88,000 megawatts by 2050. 

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