How some energy efficiency incentives slow climate action

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When Seth Klein decided to decarbonize his Vancouver home, he took advantage of some of the incentives offered to offset the cost.

Klein, an adjunct professor of urban studies at Simon Fraser University and author of A Good War: Mobilizing Canada for the Climate Emergency, installed an electric heat pump system to replace his high-efficiency gas furnace in 2020. (He's seen in the photo above with his wife, Christine Boyle, and son Aaron.)

That cost $17,000 plus tax, but he was able to get $9,000 in rebates from the B.C. government and the City of Vancouver. He and Boyle (who shows what the switch looked like here) had to come up with the $8,000 difference. 

The size of the rebates available has increased by a few thousand dollars since then, but Klein says they "don't yet come nearly close enough to covering the full cost."

He suspects not many households would be able to afford to make the switch. The response to a freedom of information request to the B.C. government from a local youth climate group confirmed his suspicion — just 709 B.C. households (his included) had taken advantage of heat pump incentives in 2020.

Meanwhile, Klein notes that the province advertised incentives from the local gas company, FortisBC, offering rebates of up to $1,000 for the purchase of a new high-efficiency gas furnace, which would result in a net cost far lower than installing a heat pump system.

FortisBC announced in April 2021 that it was seeing "record participation" in its energy efficiency programs, with high-efficiency natural gas furnaces being the most popular rebate.

"Now, high efficiency gas furnaces might have lower [greenhouse gas emissions] than older furnaces," Klein said. "But they're still emitting GHGs. And every time households use one of those rebates to get a high efficiency gas furnace, that's 15 years where they're not going to convert [to a non-emitting option]."

That's because furnaces have a lifespan of more than a decade.

B.C. isn't the only province where homeowners can still get rebates for new fossil fuel burning furnaces and boilers. They're also available in P.E.I. from the provincial government; in New Brunswick from NB Power; in Ontario from Enbridge Gas; and in the Northwest Territories from the non-profit Arctic Energy Alliance. However, gas furnaces aren't eligible for the federal Greener Homes Grant, to the disappointment of the Canadian Gas Association.

Mike Henchen, principal of the carbon-free buildings program at RMI, a U.S.-based think-tank focused on the clean energy transition, agreed that people won't want to replace new equipment right away.

"There is a big risk there that at minimum … we're wasting money by switching people to an efficient gas furnace and then having to switch them again real soon," Henchen said. "Or worse, that we're expanding the inertia of the gas system today by sinking more money into it."