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Air conditioning is out. Heat pumps are in

Aug 19, 2023

Luise Cox is upgrading her 1960s bungalow in Mississauga, Ont., this week by tearing out and hauling away the old air conditioner and natural gas furnace. Instead, crews are replacing those units with a brand new heat pump (and some extra insulation in the attic, too).

"We needed to upgrade, and environmentally it's better," the 85-year old said. "We're spending a lot on heating and cooling, so hopefully this will help."

Heat pumps, which have been promoted for years, have failed to gain traction with the public. But that's starting to change with rising temperatures, improved technology and government rebates, among the reasons why.

HVAC specialist Peter Messenger says they've gone from 10 per cent of his company's installations to about half almost overnight.

"I'm surprised at how quickly the general public's mindset has changed on heat pumps," said Messenger, owner of A1 Air Conditioning and Heating in Oakville, Ont., west of Toronto. "I always knew it would happen, I just didn't know it would happen this quickly."

Sales are growing so quickly that Messenger said he wonders whether heat pumps could even wipe out the sales of new air conditioners in homes in a few years and put a significant dent in the number of natural gas furnaces.

A heat pump often looks like an air conditioner and can function the same way. They cool a home by absorbing the heat inside and releasing it outside. But unlike an air conditioner, they can reverse the process in winter — heating a cold house without the need of a burner like a furnace, by transferring heat from where it's not needed to where it is: inside.

"We won't sell air conditioners. Everything will be a heat pump" in a few years, Messenger said. "People may still keep their gas furnaces, but as time goes on, I think we're going to see less and less gas meters on people's homes."

Heat pumps existed for decades, and more than 400,000 were installed in Canada in 2000, but that number has doubled in the two decades since. However, a confluence of factors is driving a spike in sales this year.

The federal government's $2.6-billion Canada Greener Homes Grant can help reduce the purchase price by $5,000, while other provincial, municipal and utility rebates in some parts of the country can help cut the installation cost further.

There is a growing familiarity with the technology, companies say, and a growing interest by homeowners to reduce their environmental footprint. Supply chain problems in recent years no longer exist.

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"It's just the perfect storm of the right factors that are driving some of this," said Greg Donahue, product manager with Reliance Home Comfort, which operates in five provinces between Ontario and British Columbia.

This year, the company's heat pump sales are up to seven times higher compared with 2022, he said.

"At the end of the day, if you are looking to get a new heating and cooling system in your home, you will get a better, more efficient heating and cooling system if you do a heat pump — and you'll get it for the same or oftentimes lower cost to the homeowner," Donahue said.

The wildfire smoke and record heat waves in parts of the country are also motivating more people to buy a new cooling system, just as heat pump technology has improved to the point where it's much more effective and efficient in a Canadian climate.

In Edmonton, increased demand for heat pumps is reducing the number of new air conditioners being installed, said Collin Goodyear, general manager of Romaniuk Heating and Air Conditioning.

But not everyone is ready to fully switch. Goodyear said people living in colder climates on the Prairies are often choosing to install heat pumps while keeping their furnaces as a backup for those extra frigid days.

"There still are those lower temperatures where the gas furnace is required, partly due to electrical costs. We still find it beneficial," he said.

About 40,000 heat pumps have been installed or approved as part of the federal government's Canada Greener Homes Grant, which launched in 2021.

Government subsidies are still essential to make heat pumps economical, although those in the industry say the price tag should continue to fall in the years ahead as manufacturers increase production. The price tag of a heat pump can vary. The average cost to purchase and install a system can range from about $6,000 to $14,000, depending on the size of the home.

Another challenge can be installing heat pumps at multi-family buildings, like an apartment complex, depending on the existing heating, cooling and ventilation system.

Heating and cooling buildings is responsible for about 13 per cent of Canada's greenhouse gas emissions. The federal government's goal is to cut those emissions by 37 per cent below 2005 levels by 2030, with an overall goal of reaching net zero by 2050.

The sharp rise in heat pump sales in Canada is mirrored by what's happening in some other countries around the world, said Sara Hastings-Simon, an associate professor in the department of geoscience and the school of public policy at the University of Calgary.

"There's a significant amount of infrastructure that has to change over to get to this net-zero target," she said.

It will take time for a big shift in how buildings are heated and cooled, but each new heat pump is a step in that direction and reducing emissions at the same time, Hastings-Simon said.

"It's not just the silver bullet technology that comes about, but it's actually that combination of the technology is ready, there's a real strong case for a consumer and there's some kind of government support — whether that's incentives or policies that help to support that install," she said.

Heat pumps are electric devices that can reduce a household's environmental footprint if you're replacing or reducing a heating unit that uses natural gas, propane or furnace oil, or a less efficient air conditioner.

The savings can add up fast. Replacing an oil furnace can save a homeowner up to $3,500 annually, according to a Natural Resources Canada study about the cost-effectiveness of heat pumps, depending on the region and type of home.

Business reporter

Kyle Bakx is a Calgary-based journalist with the network business unit at CBC News. He files stories from across the country and internationally for web, radio, TV and social media platforms. You can email story ideas to [email protected].

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