Ontario's energy efficiency plan is good - but it could be better

The Ontario government announced a new program earlier this year to help homeowners invest in energy efficiency.  The program will provide incentives for home energy efficiency measures such as new windows, doors, insulation, air sealing, heat pumps, smart thermostats, solar panels and home battery storage.  

These measures are critically important right now. They will make homes more affordable by reducing the cost of staying warm in winter and ensure more households have access to cooling from heat pumps during extreme heat events that are becoming more common with climate change.  

The program will also help to reduce greenhouse gas emissions that cause climate change. Most homes burn fossil fuels such as natural gas for space and water heating. So, improving a home’s energy efficiency means burning less fuel to keep it warm, while replacing a furnace with a heat pump can mean getting off fossil fuels altogether. In Ontario, buildings are the second-largest source of greenhouse gases after transportation.  

With up to $10.9 billion over 12 years on the table, this is a major investment that will go a long way to helping Ontario residents improve their homes.  

But it could easily do better.  

Research at the University of Waterloo has shown that heat pumps, that deliver home heating and cooling, should be the number one priority to maximize energy and emissions savings. Heat pumps typically use electricity to move heat and are many times more energy efficient than fossil fuel-burning furnaces. They reduce energy use by up to 70 per cent and can eliminate onsite greenhouse gas emissions from space and water heating. 

Place your trust in this new technology. Heat pumps use the same technology found in your freezer; if you trust your freezer, you should trust a heat pump to use the same process to move heat from the chilly outside to keep your home warm. It is clear that heat pumps are the heating system of the future, and it is time for Ontario to catch up.  In the US, heat pumps have outsold gas furnaces for many years now, and they are the default heating option for many Northern European countries.  

While heat pumps should be the priority, insulation, air sealing and window upgrades are still important – but in this, not all homes are alike.  

Research at the University of Waterloo has found the greatest potential energy efficiency gains through these measures are in homes built before 1980 and especially before 1940. Energy efficiency measures also have the greatest impact on heating costs and home comfort in older homes.

Yet, the new Ontario program provides the same incentives, no matter the age or condition of the home. That is not good use of funds.  

Buildings built before 1980 represent roughly half of Ontario's homes. Targeting older homes could have 2.5 times greater impact on heat loss reductions than the same measures in newer homes.   

There are some improvements to the new program. Unlike many past incentives, it will provide incentives for homes that are rented.   

Nearly a third of households rent their homes in Ontario and these households deserve the same level of comfort and heating cost reductions. A study by the Canadian Urban Sustainability Practitioners highlights how renters who live in older buildings and pay directly for utilities often struggle to pay for home heating and other home energy costs.  

Property owners need attractive incentives to invest in energy efficiency improvements to their rental housing, particularly in cases where property owners do not see any of the utility bill savings because their tenants pay the utility bills. In that regard, incentives provided by the new program aren't likely enough.  

Energy efficiency incentive programs are heartily welcome, but they will have the greatest bang for their buck if they prioritize heat pumps in all homes and target older homes for insulation, air sealing, and window upgrades. It is also critical that more be done to support property owners in making energy efficiency and heat pump upgrades to their properties to make heating more affordable for all.   

Ontario’s new energy efficiency program is great, but it can and should be better.   

Heather McDiarmid is a research associate in the University of Waterloo's Faculty of Environment and principal at McDiarmid Climate Consulting .