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Published March 24, 2022

Green Home Grants, Loans and Other Incentives

Canada's Greener Home Grant, along with other programs and incentives, can help you pay for upgrades and retrofits that make your home more efficient.

Switching to LED lightbulbs or adjusting your thermostat are quick ways to reduce energy usage, and possibly your carbon footprint. But if you want to significantly impact your home’s energy consumption, it will likely require renovations and upgrades.

Applying for green home grants, certain loans, and provincial or municipal incentive programs can help you manage the cost of making these improvements.

» MORE: Steps to take before buying a house

What is a “green” home, anyway?

Residences that are specifically designed or retrofitted to use less energy, water and natural resources compared to standard homes are often referred to as “green homes.”

Not only do green homes benefit the environment, but they often lead to lower utility bills and increased comfort.

Some builders choose to construct homes and residential properties following green principles right from the start, which could allow them to get a green rating or certification from a third-party organization such as Built Green Canada or the Canada Green Building Council. When a home is certified green, owners may qualify for additional benefits such as discounts on mortgage insurance.

Even if your home wasn’t built following green principles, it’s possible to make updates to increase efficiency. To encourage people to go green, the Canadian government offers incentives such as the Greener Homes Grant and has proposed the Greener Homes interest-free loan.

» MORE: First-time home buyer guide

Why retrofit a home to be more green?

Certified or not, a green home can save you money and help you feel better about your resource consumption..

Economic benefits

Some homeowners go green to pursue an immediate financial advantage. For example, new single-family homes that are certified through Built Green Canada may be eligible for a partial mortgage loan insurance refund of up to 25%. Note that this is a rebate your mortgage insurance premium, which you’ll pay if your down payment is less than 20%, not on your mortgage payment.

Additionally, improvements like energy-efficient appliances, windows, or doors could help you save money on your monthly water, electricity and gas bills. A green home could also be a way to attract buyers if you ever sell your home and potentially increase your selling price.

» MORE: Home inspection checklist for buyers and sellers

Environmental benefits

The other advantage of a green home is that it reduces your overall impact on the environment. Green homes typically feature appliances and construction materials that produce fewer emissions and use energy more efficiently, resulting in a smaller carbon footprint. Lower-flow toilets can significantly reduce the amount of water your home uses each day and certain improvements can enhance air quality.

Ways to pay for your eco-friendly retrofit

Green home grants

Major renovations that greatly increase your home’s energy efficiency can be quite expensive. If you’re trying to work out a budget for renovations, know that various grants and loans are available to help you pay for a retrofit.

Canada Greener Homes Grant Initiative

The Canada Greener Homes Grant Initiative is available to homeowners who want to retrofit their primary residence. All homeowners are eligible, regardless of where they live, as are Indigenous governments and housing organizations. Homes built within the last six months are excluded.

The Canada Greener Homes Grant offers two main benefits:

  • Get up to $600 toward the combined costs of your pre- and post-retrofit evaluations, as performed by a registered energy advisor.
  • Get up to $5,000 for eligible retrofits conducted after December 1, 2020.

That’s a total of $5,600 for completing certain energy-efficient upgrades. However, you’ll need to follow specific steps to qualify for the grant.

  1. Book an EnerGuide evaluation to explore what upgrades might make sense for your home. A registered energy advisor from Natural Resources Canada (NRCan) will evaluate your home and recommend retrofits to undertake.
  2. Use your evaluation report to decide which upgrades to make. Note that installations and upgrades to mechanical and electrical systems must be handled by licensed professionals, and you’ll need to keep receipts for all the work.
  3. Hire the proper professionals to execute your renovation, and schedule a time to have the project or projects completed.
  4. Book a post-retrofit EnerGuide evaluation, which will assess the energy savings due to the upgrades. You’ll upload your evaluation and all receipts from the work for NRCan to review.
  5. Confirm your total costs to receive your grant funds from the Greener Homes Initiative. The grant amount is not taxable, and you don’t need to declare it as income.

» MORE: First-time home buyer grants and assistance programs

Green home loan programs

If you don’t have the funds available to pay for energy-efficient upgrades up front and wait to be reimbursed by the Green Homes Grant, consider available green home financing programs.

Some of the programs below are already available, while others are in the developmental stages. A few options to keep an eye on include:

  • Greener Homes interest-free loan: Proposed by the federal government, this interest-free loan would provide up to $40,000 to help homeowners pay for energy-efficient upgrades.
  • Ottawa Better Homes Loan Program: The city of Ottawa is building a low-interest loan program that would allow homeowners to borrow up to 10% of the current value of their home.
  • Calgary Clean Energy Improvement Program: Approved by Calgary’s city council, the Clean Energy Improvement Program would provide homeowners up to $50,000 in low-interest financing for home renovations that would be repaid over 25 years.
  • Toronto Home Energy Loan Program: Toronto is enhancing its existing Home Energy Loan Program by offering 0% or low-interest loans of up to $125,000 for energy-efficient home upgrades.
  • RBC Energy Saver Loan: When you use a fixed-rate installment loan of more than $5,000 to purchase eligible green products, such as energy-efficient appliances, RBC will give you 1% off the loan’s interest rate or a $100 rebate on a home energy audit.

Rebates

Depending on your province and energy provider, you may qualify for a rebate on certain energy-efficient products. Some Canadian energy-rebate programs include:

  • Efficiency Manitoba: Manitoba residents may qualify for rebates on upgrades like energy-efficient appliances, windows, and insulation.
  • CleanBC Better Homes and Home Renovation Rebate Program: Rebates of up to $6,000 are available when BC residents purchase energy-efficient heat pumps, water heaters, furnaces, and more. Some upgrades even qualify for a top-up in certain municipalities, such as the cities of Vancouver and Kelowna.
  • Efficiency Nova Scotia: Get up to $3,000 in rebates when you add solar power to your home.
  • Enbridge Home Efficiency Rebate: Ontario homeowners whose gas service is provided by Enbridge can receive up to $5,000 in rebates for upgrading their insulation, air sealing, windows, doors and more.

Rebate details and deadlines often change, so it’s important to double-check to make sure you qualify. In addition, you often need to choose specific products to qualify for rebates, so be sure to confirm that your planned retrofit matches the rebate’s requirements before making any upgrades.

About the Author

Barry Choi
Barry Choi

Barry Choi is a personal finance and travel expert. His website moneywehave.com is one of Canada's most trusted sites when it comes to all things related to money and travel. You can reach him on Twitter: @barrychoi.

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