Heat pumps can provide significant cost savings in the effort to decarbonize Canada’s building sector. According to a report by Heating, Refrigeration and Air Conditioning Institute of Canada (HRAI), the technology can significantly reduce the cost of electrification. The study was done by Dunsky Energy + Climate Advisors, a firm with extensive knowledge of the North American energy marketplace.
“For many years, experts in the field have known that ground-source heat pumps (GSHPs) offer considerable energy cost savings to Canadians while reducing carbon emissions and contributing to Canada’s fight against climate change. This report clearly shows that, in addition to these savings, the technology has unique attributes that could deliver many billions of dollars in savings to the electricity grid,” said Sandy MacLeod, HRAI president and CEO.
The report found that a reasonably ambitious adoption rate of ground-source heat pumps over the next few decades could save Canadians between $49 and $148 billion in avoided electricity system development investment costs – investments that would otherwise be required as part of the country’s GHG emissions reduction plans.
The net benefit to the electricity grid (in avoided investment costs) will amount to approximately $40,000 per installed GSHP system. That number represents the societal benefit, over and above the household-level energy cost savings and after allowing for the initial costs of installation.
But while all Canadians will benefit from these savings, only a small fraction – those that choose geothermal for their homes and buildings – are asked to pay the up-front costs.
“Governments and utilities have every reason to invest in accelerating geothermal heat pump adoption,” said Philippe Dunsky, president of Dunsky Energy + Climate Advisors. “Our modelling finds that across the country, doing so can significantly reduce the cost of achieving our ambitious climate goals.”
The report recommends that, to realize these benefits, governments, utilities and electricity system planners need to implement policies that would counteract the misalignment of who pays and who benefits and support ground-source heat pump adoption.
The study finds that through an optimal mix of policies aimed at increasing GSHP adoption could create a triple-win situation for Canadians: lower costs, increased GHG reductions from space heating, and a better alignment of costs and benefits.
