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What’s needed to further amp up heat pumps in the Maritimes

Heat pumps are helping the Maritimes get off oil heating quickly, but there are barriers to broader adoption in the East.

What’s new?

Heat pumps play a significant role in reducing emissions from heating buildings while also reducing energy costs and enhancing resilience to climate impacts (since they provide both heating and cooling). They are widely used in the Maritimes, with the highest uptake of any region in Canada, and future projections point to even further growth in their popularity. But real barriers remain to improve widespread adoption by households still heating with oil throughout the Maritimes. Canada’s latest national greenhouse gas inventory shows emissions from residential heating represented 6 per cent of total emissions in the Maritimes in 2021. A top contributor has been the historical reliance on oil heating, accounting for up to 80 per cent of total residential heating emissions (Figure 1).

Heat pumps are well-suited for the Maritimes

Overall, reducing emissions across residential heating will rely heavily on electrification and switching away from fossil fuels as a heating source. The emissions reduction benefits of electrification are especially pronounced in the Maritimes due its current high reliance on oil heating.

Heat pumps combine the emissions reductions of electrification with the added benefits of remarkable efficiency. They are often twice as efficient as electric resistance heating, and tend to offer significantly cheaper operating costs compared to oil heating. Not to mention, they also provide cooling during the summertime.

The Maritimes’ climate offers optimal conditions for heat pumps, as temperatures rarely reach the extreme cold points where heat pumps can sometimes struggle (though cold climate heat pumps are one option that can operate under conditions below -25 degrees Celsius). This means that heating requirements can be met by heat pumps for most if not all of the winter season. And homeowners who want extra assurance can also install back-up electric resistance heating.

As highlighted in an earlier Canadian Climate Institute case study by Chris Turner, the uptake of heat pumps has grown rapidly in the Maritimes, with heat pumps representing up to 30 per cent of primary heating systems across households.

What’s striking is that even as heat pumps are more widely deployed, they account for only a small share—about 3 per cent—of the total energy used for building heat in the Maritimes, also known the region’s “heating stock.” These two data points help illustrate just how efficient heat pumps can be: representing nearly one-third of primary heating systems while their share of energy use is only one-tenth of that number. (It also helps that heat pumps are often deployed in newer buildings, which are more energy efficient than older ones).

The future of heat pumps depends on deeper implementation

Our analysis of announced policies from federal, provincial and territorial governments with Navius Research finds that the heating stock taken up by electric heating sources across the Maritimes will increase by an average of 30 per cent by 2030 (Figure 2).

As the Maritimes electrifies its building heating systems, heating stock captured by heat pumps could double—if policies are implemented quickly and efficiently. In P.E.I., the increases reflect eight times current levels, going from 1.25 per cent of total heating stock to up to 8.35 per cent by the end of the decade. Increases in heat pump shares will reduce the reliance on oil heating, and provinces such as Nova Scotia could see their existing oil heating stock (46 per cent) shrink by half by 2030 (26 per cent).

But expanding heat pump uptake levels to those in the figure above will depend on a range of factors such as: the types of heat pumps available to install depending on the size and needs of a house; differences in upfront and operating costs across heating technologies; availability of skilled workers trained to install heat pumps; and future prices in electricity compared with the price of fossil fuels.

To address these factors, industry initiatives and supportive government action can help create conditions that will be favorable to a greater transition to electric heating.

Strong policy is driving heat pump adoption

Government policy has played an important role increasing the adoption of heat pumps so far, through programs such as New Brunswick's Total Energy Savings Program. Additional supports recently introduced such as the federal Oil to Heat Pump Affordability (OHPA) program will continue to accelerate uptake.  In fact, the analysis above includes the federal OHPA program, which provides rebates up to $10,000 on heat pumps for households relying on oil-burning furnaces.

Provinces have also implemented similar measures. Nova Scotia provides a $5,000 grant under its EfficiencyOne rebates, and offers free heat pumps for low-income households through a $140 million investment. Similarly, New Brunswick offers free mini-split systems for households with annual incomes below $70,000 through its Enhanced Energy Savings Program (a partnership of the provincial government and NB Power). And in P.E.I., free heat pumps are also available for homeowners with family incomes below $75,000. These programs were not included in the analysis, as they were released following the study, but it’s likely that the share of heat pumps could grow even faster than anticipated.

Overall, these supports cover a range of up-front costs for homeowners, including the actual heat pump itself, installation costs, home upgrades required for the heat pump, oil furnace removal, and back-up heating systems.

What barriers do we need to overcome to further increase heat pumps in the Maritimes?

Despite  signs of strong market growth, 44 per cent of heating across the Maritimes is still coming from oil heating, and the switch to heat pumps will require addressing additional barriers to displace more fossil fuels. These include long wait times to receive payments from existing rebate programs, labour shortages as the demand for skilled workers for installations increases, and additional financial support for houses that require the installation of back-up heating on top of their heat pump. All of these factors can weaken the confidence of Maritime homeowners to make the switch to heat pumps and slow adoption.

Addressing these barriers and improving existing programs can help build on the impressive progress made so far to get more homes off oil and heated with heat pumps in the Maritimes.

Arthur Zhang is a Research Associate with the Canadian Climate Institute