Demand for federal money to help defray the cost of home energy upgrades 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 submitted for the Canada Greener Housing Grant, the program is approaching its $2.6 billion budget.
As such, the portal for new applications will close within the next two weeks, Energy Minister Jonathan Wilkinson said on Monday.
Enbridge Gas, which partnered with the federal government to implement the grant program, already closed its own application portal on Monday.
“It’s certainly been more popular than we anticipated,” Wilkinson said in an interview.
The minister said he believes the cost of living is driving some of the demand, with rising energy costs and subsidies available to help reduce some of those costs over time.
Natural Resources Canada said that, on average, grant recipients will save approximately $386 a year on their energy bills.
He said a second phase of the program is now being designed to make it more accessible to low- and middle-income families.
The grant was launched in December 2020 and Wilkinson said the expectation was that applications would be open until approximately the end of 2024.
Families who have already submitted their application have until 2027 to complete the procedures to receive the grant money.
As of late January, nearly 550,000 families had applied for the grant, which offers up to $5,000 for green renovations, such as installing heat pumps and solar panels, upgrading windows or adding more insulation.
An additional $600 is available to help cover the cost of a home energy audit that is required as part of the application process.
Natural Resources Canada reported Monday that interest in the grant has increased in recent months.
Over the three years, an average of 475 requests were received daily. In November, it reached 830 per day and in January it rose to 1,200 per day.
To date, 165,000 grants have been awarded based on completed applications. Ontario represents a third of them and Quebec a fifth.
Wilkinson said average pay so far has also exceeded expectations.
The government estimated the average subsidy would be about $3,500, but instead it has been more than $4,200, largely because heat pumps are among the biggest drivers of demand for money.
About 82,000 heat pumps have been installed as a result of the grant program, with another 250,000 expected as a result of applications that have been received but not yet processed.
Heat pumps are more expensive to install compared to many other retrofits.
This program is separate and distinct from a heat pump grant program that offers up to $15,000 for 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 Corp. also offers a greener home loan program, offering up to $40,000 in interest-free loans over 10 years for green renovations.
About 62,000 people have applied for that program since its launch in June 2022, and 53,000 have been approved. About 45 percent of the loans granted have been for heat pumps.
Wilkinson said low- and middle-income families haven’t been able to take advantage of the grant program as much because it requires homeowners to pay renovation costs up front and recoup some of that money through the grant program after the fact.
Renovations can also cost more than grant offers.
Installing a heat pump cost an average of 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 oil-to-heat pump program to allow some of the funds to be issued up front, rather than after the pump has been installed.
This report by The Canadian Press was first published Feb. 5, 2024.