Market Snapshot: Heat pumps could significantly reduce GHG emissions from Canada’s buildings

This article was published by the Canada Energy Regulator on Dec. 20, 2023.

Heat pumps are two to four times as energy efficient  as other space heating  systems currently used in Canada.⁽¹⁾ Space heating accounts for about 60 per cent of the energy used in Canada’s residential and commercial/institutional buildings today. Replacing space heating systems with heat pumps can be a major contributor to reducing this sector’s energy use and related greenhouse gas (GHG) emissions.

The number of residential heat pumps installed in Canada doubled over the last two decades to over 800,000 units. Over 60 per cent of that increase came from single detached homes in Ontario and Quebec (Figure 1).

Energy savings and GHG emissions reduction potential from heat pumps

Despite this rapid growth, heat pumps remain a niche technology in Canada, meeting just over 5 per cent of space heating needs in residential buildings⁽²⁾ (compared to 10 per cent globally).⁽³⁾ The energy savings and GHG emissions reduction potential from heat pumps in Canada can be illustrated by:

• Energy used for heating residential and commercial/institutional buildings combined currently accounts for 16 per cent of all energy used in Canada⁽⁴⁾ and 13 per cent of energy related GHG emissions.⁽⁵⁾

Electricity used to heat homes (instead of fossil fuelsDefinition* or wood) in Canada has increased from 21 per cent of the total in 2000 to 31 per cent by 2020, mostly from the installation of electric baseboardDefinition* heating systems – which are only half as efficient as heat pumps (see footnote 1).
Continued decarbonization of Canada’s electricity means less GHGs emitted per unit of energy used when compared to other home-heating fuels like heating oil, propane, or natural gas.
Rising efficiencies of new heat pump models.
Despite these advantages, heat pumps are not without their challenges. These include higher upfront costs relative to other systems; potentially complex permitting and installation processes; and limits in operating conditions in very cold weather and the associated need for backup systems.

EF2023 projects heat pumps will make up 50 per cent of residential heating demand in 2050

The Canada’s Energy Future 2023 Global Net Zero Scenario projects total GHG emissions from Canada’s residential and commercial/institutional buildings to decline by 71 per cent between 2021 and 2050.⁽⁶⁾ In that scenario, heat pumps satisfy 13 per cent of Canada’s residential space heating demand in 2030, 30 per cent in 2040, and 50 per cent in 2050. This represents a more than two-fold increase over current levels by 2030, five-fold by 2040, and nine-fold by 2050. Other net-zero projections show a similar or higher level of heat-pump adoption⁽⁷⁾ – illustrating the rapid pace of deployment and adoption needed to maximize this technology’s energy savings and GHG emissions reduction potential in a net-zero future.

Footnotes

1. According to Natural Resources Canada, the energy efficiency of wood heating systems is 50 per cent while that of heating oil systems range from 60 per cent to 85 per cent. Natural gas ones range from 62 per cent to 90 per cent, while electric heating systems efficiencies are 100 per cent for baseboards and 190 per cent for heat pumps. Canada’s residential heating equipment stock average efficiency has increased from 78 per cent to 91 per cent between 2000 and 2020.
2. Refers to both the share of residential space heating equipment stock and residential space heating services provided.
3. Heat Pumps – Analysis, IEA
4. Based on the latest available data (2020): Comprehensive Energy Use Database, Natural Resources Canada, and Table 25-10-0029-01, Statistics Canada
5. Including GHG emissions from the electricity generated to power electric heating systems. Canada’s energy-related GHG emissions from: Greenhouse gas sources and sinks in Canada: executive summary 2023, Environment and Climate Change Canada
6. These reductions are based on specific assumptions about activity levels, fuel prices, technology costs/availability, and government policies and supports – all factors that influence GHG emissions levels in the sector, beyond greater heat pump adoption.
7. Other net-zero projections for heat pump adoption in Canada (and globally) range from 55 to 90 per cent by 2050: Canada’s Net Zero Future, The Canadian Institute for Climate Choices, Canadian National Electrification Assessment: Electrification Opportunities for Canada’s Energy Future, EPRI, Net Zero by 2050 – A Roadmap for the Global Energy Sector, IEA, World Energy Outlook 2021, IEA, and Canadian Energy Outlook 2021, Institut de l’énergie Trottier