Heat pump rebound

Hi there,

This week, we take a look at Carney's new $2 billion plan to put heat pumps in a million homes. After a few years of uncertainty, rebates are back and faster than ever. We look at what the new funding unlocks, and what it’s still leaving on the table.

Elsewhere in climate tech:

Gitxaała Enterprises acquires Carbonzero
Promise Robotics teams up with the US’ largest homebuilder
Chinese EVs are officially coming to Canada

Canada invests $2B to electrify 1M homes

Credit: Mesayu Elida Irawati

What happened: Heat pumps are back on the menu after the Carney government announced a National Heat Pump Rebate Program and $2 billion over eight years to retrofit one million homes.

The details: The program aims to put heat pumps in 820,000 homes with $2,000 rebates for most households and up to $10,000 for those below median income.

The biggest change for home retrofits is speed. Applications are submitted online and approved in 24 hours; payments are approved within five day, with no energy audits required.

Another 280,000 apartment units get financing through CMHC and the Canada Infrastructure Bank, plus $110 million to renew the Deep Retrofit Accelerator.

The new tools build on the Canada Greener Homes Affordability program, which offers no-cost retrofits in select provinces.

The context: Federal retrofit funding has gone through a boom-and-bust cycle. The Greener Homes Grant saw huge uptake, but ran out of money and closed to new applicants in 2024, leaving retrofit startups, HVAC installers and homeowners without a program to plan around.

Why it matters: The new rebate closes that funding gap and makes installing a heat pump an easier sell. An eight-year commitment gives installers a longer horizon to hire and stock against.

Speed matters as much as the money. According to the feds, about one million homes replace their heating system every year, often after the old system breaks down. With the heat off, swapping in a new furnace beats waiting on energy audits and rebate cheques.

Not so simple:

Deeper retrofit tools like air sealing and insulation are no longer covered, limiting efficiency gains.
Funds could run short again, leaving installers and homeowners with whiplash
One million homes is 6% of Canada's building stock, and new homes are still getting built on gas

The bottom line: Renewed rebates give installers and homeowners the certainty they lost in 2024. With building envelope upgrades dropped, the program is more about electrification than energy efficiency.

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AlumaPower received $4 million from Canada's Regional Defence Investment Initiative to commercialize its aluminum-fueled generator.

Carbonzero was acquired by Gitxaała Enterprises, Gitxaała Nation's economic development arm. The carbon accounting and offset company will expand into Canada's compliance markets and Gitxaała Nation's ownership of carbon credits from the Great Bear Rainforest.

Aeon Blue formed a joint venture with Eskasoni First Nation to develop a Sustainable Aviation Fuel facility in Cape Breton.

OPEN Technologies will operate Quebec's building energy reporting system using its GRID platform across 47,600 buildings.

e-STORAGE secured a 200MWh battery storage system contract for a solar-plus-storage site in Australia.

New Flyer closed an order for 100 hybrid and BEV buses for Washington Metro, part of a five-year, 500 vehicle contract.

Pabineau First Nation and SeafarerAI launched Mother Earth Watcher an AI-powered environmental monitoring system integrating Indigenous knowledge.

Promise Robotics signed a multi-year supply deal with DR Horton, the largest US homebuilder.

Quebec’s heavy-duty EV test program validated an 87% drop in fuel expenses for pilot testers.

Chinese EVs enter the market: Chinese carmaker Geely officially entered the Canadian market for 2027, with dealers and service network planned for next year.

Canada agreed to start letting in a small number of Chinese EVs at a reduced 6.1% tariff earlier this year
About 50% of Canadians plan to buy an EV, but are waiting for more affordable EVs from China and pickup truck options.

Canadian energy powerhouse: Emera and Canadian Utilities announced a $72B "merger of equals" to capitalize on growing power demand. The new utility would be one of North America's largest.

Solar sales under fire: Alberta Municipalities want the province to regulate or ban door-to-door solar sales in the province due to misleading sales tactics from some firms.

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