Calculating clean energy household savings for Canadians and how government incentives could help

At a glance

Opening the door, by Keri McNamara, Jana Elbrecht, Stefan Pauer, Trevor Melanson. Clean Energy Canada, Oct. 16, 2024.

How much money could everyday people save by switching to clean energy solutions? A report published by Clean Energy Canada, a program housed at the Morris J. Wosk Centre for Dialogue at Simon Fraser University, says it could be quite a lot. To give people a clearer view of potential savings, Clean Energy Canada has launched an online calculator at mycleanbill.ca, where households can calculate personalized savings based on factors like location, driving habits, and home type. It shows that making the switch from gas-powered cars to electric vehicles, from natural gas to heat pumps and energy-efficient appliances and making some other efficiency upgrades in a deatched home in Toronto could reduce monthly household costs by up to $551, while reducing emissions by more than 90 per cent.  Despite these benefits, barriers like high upfront costs and limited affordable options hinder access for many Canadians. The report calls on policymakers to enhance support programs and rebates, particularly in regions without incentives. Targeted government action to lower initial costs is crucial to achieving widespread adoption of clean energy technologies, ultimately resulting in lower emissions and substantial savings for Canadians.

Key findings

• Household savings: To see personalized savings, households can use the online calculator to explore potential financial impacts based on their location, home type, and energy habits.
• Significant emissions reductions: Clean technologies like EVs and heat pumps can cut household carbon emissions by over 90 per cent, supporting Canada’s climate targets.
• Barriers to adoption: EVs can save up to $3,000 annually over gas vehicles, but limited affordable models hinder access. High upfront costs for both EVs and clean heating systems remain a major challenge, highlighting the need for government incentives to improve affordability.
• Geographical disparity in incentives: Inconsistent rebates across provinces create unequal access. For example, there is a federal program to help cover the cost of switching to a heat pump, but homeowners in British Columbia, Newfoundland and Labrador, Nova Scotia and Prince Edward Island are eligible for more.
• Support for rental properties needed: The “split incentive” issue in rental properties restricts clean energy upgrades, as landlords incur costs while tenants benefit from savings.

Take a look

Bigger picture

According to the International Energy Agency, Canada’s residential sector accounted for 7.3 per cent (38.1 Mt) of national CO2 emissions in 2022, while transportation led with 31.3 per cent. Government data also attributed 16.1 per cent of greenhouse gas emissions to households in 2021. With Ottawa’s recent proposal for a cap on oil and gas emissions as part of its climate strategy, household adoption of clean technologies becomes even more critical to offset emissions across other sectors.

The report also underscores the environmental and economic benefits of household-level clean energy adoption and offers actionable recommendations. Over time, clean energy technologies like EVs, heat pumps, and efficient appliances prove far more economical than fossil fuel-based options. For example, EV drivers pay an equivalent of just $0.40 per litre, saving roughly $30,000 over 10 years. Similarly, heat pumps in most provinces are more cost-effective to operate than air conditioning combined with gas or oil heating.

High upfront costs remain a barrier. Canada currently has only three EVs priced under $45,000 compared to 12 in Europe and the recent tariffs on Chinese EV imports could further restrict accessibility. Some provinces offer rebates to improve access to clean energy technologies, but others do not, leading to regional disparities. The report calls for federal incentives to drive adoption, a strategy that has proven successful in other countries. In France, property owners can receive grants of up to 15,000 euros for ground source heat pumps and 9,000 euros for air source heat pumps. France had more than 620,000 heat pump sales in 2022.

The report also highlights barriers in rental properties, where the “split incentive” between landlords and tenants limits clean energy upgrades. It recommends regulatory measures, like the UK’s energy performance certificate (EPC) standards, to help meet national climate goals and expand access to energy-efficient housing.

Challenges and opportunities

Key barriers to household-level clean energy progress in Canada:

• High upfront costs, inconsistent incentives: The steep upfront costs of EVs, heat pumps, and energy-efficient appliances hinder widespread adoption, with varying rebate availability across provinces adding to the challenge.
• Limited availability of affordable EV models: The limited range of affordable EV options in Canada restricts access to cleaner transportation, especially in rural areas.
• Insufficient support for retrofits: Older buildings often require costly retrofits to accommodate energy-efficient upgrades, presenting financial and logistical challenges for the energy transition.
• Access issues for renters: The “split incentive” problem leaves landlords with little motivation to adopt clean energy solutions since the benefits primarily accrue to tenants.

To address these challenges, the report recommends:

• Expanded national rebate programs: Standardizing incentives across provinces could make technologies like EVs and heat pumps accessible nationwide.
• Support for EV infrastructure in rural areas: Increasing charging options in underserved areas would improve accessibility and help address affordability barriers. Collaboration between the automotive industry and government is essential to promote affordable EV models.
• Targeted financial assistance for retrofits: Offering grants or low-interest loans for retrofits in older homes could encourage wider adoption of energy-efficient upgrades.
• Incentives for landlords: Introducing tax credits or grants for landlords who invest in energy-efficient upgrades would address the split incentive issue, benefiting both landlords and tenants.

In their own words

The shift to clean energy isn’t just a way to fight climate change—it is something we should do to make life cheaper and healthier for Canadians.

Opening the door, by Keri McNamara, Jana Elbrecht, Stefan Pauer, Trevor Melanson, Clean Energy Canada, Oct. 16, 2024.

Final thoughts

This Clean Energy Canada report highlights how household-level clean energy adoption can play a big role in achieving net-zero targets, stressing that broader adoption could make life cheaper and healthier for millions. The authors identify high initial costs as the main barrier and conclude that government incentives are essential to reduce energy consumption by subsidizing costs and expanding options.

Further research could explore how integrating clean energy across sectors such as transportation and housing might accelerate the transition. For example, increased EV use could complement rooftop solar, allowing car batteries to store excess daytime power for nighttime use. While boosting EV adoption would reduce emissions and save money, enhanced public transport could offer similar benefits by decreasing vehicle demand. The report might also benefit from a stronger focus on how consumer awareness campaigns could inform Canadians about long-term savings, environmental impacts, and available support programs.

Download the full report originally published by Clean Energy Canada on Oct. 16, 2024.