(Ottawa) Demand for federal funds to help cover the cost of home energy renovations has skyrocketed in recent months, forcing the government to close applications for the program nearly a year earlier than expected.
With more than half a million applications already received for the Canada Greener Homes Grant, the program is approaching its $2.6 billion budget.
Thus, the portal for new applications will close its doors in the next two weeks, Energy Minister Jonathan Wilkinson said on Monday.
Enbridge Gas, which partnered with the federal government to implement the subsidy program in Ontario, already closed its own application portal on Monday.
“It’s definitely been more popular than we anticipated,” Mr. Wilkinson said in an interview.
The minister explained that he believed the cost of living was driving some of the demand, with energy costs rising and subsidies available to help reduce some of those costs over time.
Natural Resources Canada said that on average, grant recipients will save about $386 per year on their energy bills.
He added that a second phase of the program is being designed to make the program more accessible to low- and middle-income families.
The grant launched in December 2020 and Mr Wilkinson said it was expected applications would be open until around the end of 2024.
Families who have already applied have until 2027 to complete the necessary formalities to obtain the grant.
By the end of January, nearly 550,000 families had applied for the grant, which provides up to $5,000 for eco-friendly renovations such as installing heat pumps and solar panels, improving windows or adding a better insulation.
An additional $600 is available to help cover the cost of a home energy audit, required as part of the application process.
Natural Resources Canada reported Monday that interest in the grant had increased in recent months.
Over the three years, approximately 475 applications were received on average daily. In November this figure reached 830 per day and in January it increased to 1200 per day.
So far, 165,000 grants have been awarded based on completed applications. Ontario represents a third and Quebec, the fifth.
Minister Wilkinson said the average payment so far has also exceeded expectations.
Success of heat pumps
The government estimated the average subsidy would be around $3,500, but it rose to more than $4,200, largely because heat pumps are among the biggest drivers of demand for the money.
Around 82,000 heat pumps have been installed through the grant program, with another 250,000 expected through applications received but not yet processed.
Heat pumps are more expensive to install than many other renovations.
This program is separate from a heat pump grant program that provides up to $15,000 to low- and moderate-income families to replace oil boilers with electric heat pumps.
The Greener Homes Grant does not specify what type of heating source must be replaced for households to qualify.
The Canada Mortgage and Housing Corporation also offers a Greener Homes Loan program, offering up to $40,000 in interest-free loans over 10 years for eco-renovations.
About 62,000 people have applied for this program since its launch in June 2022, and 53,000 have been approved. Around 45% of the loans granted were for heat pumps.
Modest households left behind
Mr Wilkinson said low- and middle-income families have not been able to benefit as much from the grant program because it requires homeowners to pay renovation costs up front and recoup some of that money through the program. subsidies after the fact.
Renovations may also cost more than the grants offered.
Installing a heat pump costs on average about $13,500, the government said.
As such, Wilkinson said, the second phase of the grant will take that amount into account to make the program more accessible to low-income families.
The government recently adjusted the fuel oil to heat pump conversion program to allow some of the funds to be paid upfront, rather than after the pump is installed.