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Clean energy can save households thousands per year: report

Electric vehicles, heat pumps can cut bills $800 per month: Clean Energy Canada

Clean Energy Canada's latest report suggests adopting clean energy can save Canadian households thousands of dollars per month. (Courtesy Clean Energy Canada)

Household investments into clean energy including electric vehicles (EVs) and heat pumps can reduce a family's energy bills by hundreds of dollars per month, according to a report from Clean Energy Canada.

The Vancouver-based clean energy and climate think tank published A Clean Bill, which analyzed the financial impacts of adopting EVs and fossil-fuel-free heating and cooling for hypothetical Toronto households and condo owners.

The research found these clean energy investments will break even in a few years, or are already more cost effective because of government subsidies.

Stefan Pauer, manager for technology and economic analysis at Clean Energy Canada, said in an interview with SustainableBiz the findings resonate at a time when inflation is hitting pocketbooks, but the consequences of global warming are also highly visible.

“Affordability concerns are one of the most important topics that concern Canadians these days. At the same time, also climate change, with wildfires impacting many people’s lives this year . . . Both of those topics are front and centre for many people in Canada,” he said.

Three families in a Toronto neighbourhood

To illustrate the cost differences, Clean Energy Canada compared three hypothetical families of four living in similar-sized detached houses on the same street in a Toronto suburb. Each "family" drives two cars and each consumes and pays equivalent electricity and gas prices.

The first family made no changes, sticking to gasoline-powered cars and natural gas for heating, cooking and hot water, with their bill hitting $2,300 per month.

The second family purchased one EV, changed to a ducted air source heat pump with natural gas backup and stuck to natural gas heating for water and cooking. This family paid $1,794 per month.

The third family switched both cars to electric options, used a ducted air source heat pump with electric furnace backup, an electric stove and a water pump for water heating. The clean energy family paid $1,439 per month – saving nearly $10,000 per year versus the family that made no changes.

Condo dwellers also reap savings

When the methodology is applied to condos (in these scenarios, each family drives one auto), the same type of clean energy benefits are seen.

A household which drives an EV and lives in a building with central natural gas heating with radiators and window air conditioning, but uses a natural gas-fired hot water and cooking stove, will save $175 per month compared to a condo-dwelling family that makes no changes.

The condo household that swaps out their car for two public transit passes, a ductless air source heat pump with electric baseboard backup, a heat pump for water heating and an electric stove saves up to $459 per month. That is a saving of over $5,500 per year, according to the report.

Electric vehicles and heat pumps lead the charge

The think tank contrasted the 10-year ownership period of popular models of gas-powered cars to comparative EV models across Canada and found a consistent trend.

“The biggest money saver was electric vehicles,” Pauer said. “EVs have been cheaper to own than gas cars for a while already . . . Gas cars have gotten more expensive whereas EVs have held relatively steady in price.”

A 2023 Chevrolet Bolt EV is approximately $33,600 cheaper over a decade to own and operate than a 2023 Toyota Corolla Hatchback XSE. The electric model of the 2023 Hyundai Kona Preferred costs approximately $32,300 less than its gas-powered model over the 10-year ownership period.

Stepping up to more luxurious vehicles, the 2023 Tesla Model 3 RWD offers over $43,300 in savings when compared to the 2024 Lexus ES 250 AWD, the report states.

As for pick-up trucks, the 2023 Ford F-150 Lightning XLT Standard Range would be over $47,400 cheaper to own and operate than the 2023 Ford F-150 XLT SuperCrew 4x4 Mid.

Federal, provincial and territorial government rebates play a key role in this, Pauer said. EVs also do not require gasoline, which has risen in cost faster than electricity, and have lower expenses for maintenance and repairs.

The report used a baseline of 20,000 kilometres driven annually for each of the vehicle comparisons.

The story is similar with heat pumps.

The report cites a study from the Canadian Climate Institute that suggests installing a heat pump is already the most cost-effective option for most Canadian households over the lifetime of the system.

Getting more Canadians on clean energy

In a series of recommendations, Clean Energy Canada highlights the importance of ensuring Canadians can access the rebates. Pauer recommends the federal and provincial governments extend the life of existing rebates and initiate programs for EVs in jurisdictions with no rebates.

Clean Energy Canada also considers how renters could play a part in the energy transition.

Renters do not have a say in choosing to install heat pumps or other more sustainable systems, despite paying the bills.

If a decision is made to install a heat pump, the building owner bears the cost but does not directly benefit from the cost savings. Incentivizing building owners to upgrade buildings has also been found to increase rental costs or enable "renovictions," the study also notes.

The “split incentive” problem holds back widespread adoption of clean energy in rental units, which Clean Energy Canada says can be addressed by looking to the Netherlands, which has minimum energy efficiency standards for residential rental properties.

This issue becomes more important as Canada is set to boost its rental housing stock, Pauer said.

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