Energy-efficiency upgrades cut a home’s running costs, make it more comfortable and can make it easier to sell. In Canada, space heating uses most of the energy in a typical home, so upgrades that keep heat in, or produce it more efficiently, have the largest effect on utility bills. This page compares the main upgrades by cost, annual savings and payback, and sets out the order they’re usually done in. It is part of our guide to property types and owning a home in Canada.
Upgrades compared
| Upgrade | Cost | Annual savings | Payback period | Effect on home value |
|---|---|---|---|---|
| Attic insulation (to R-60) | $1,500–$4,000 | $300–$800 | 3–7 years | Moderate |
| Air sealing (weatherstripping, caulking) | $200–$1,000 | $200–$500 | Under 2 years | Low (but supports other upgrades) |
| Heat pump (air source) | $4,000–$10,000 | $500–$1,500 | 4–10 years | Moderate to high |
| Energy-efficient windows | $10,000–$30,000 | $300–$800 | 15–25 years | High |
| High-efficiency furnace | $4,000–$8,000 | $300–$600 | 8–15 years | Moderate |
| Basement insulation | $3,000–$8,000 | $200–$500 | 8–15 years | Moderate |
| Solar panels | $15,000–$30,000 | $1,000–$2,500 | 8–15 years | High |
| Heat pump water heater | $2,500–$5,000 | $200–$400 | 8–15 years | Low to moderate |
| Smart thermostat | $200–$400 | $100–$200 | 1–3 years | Low |
| LED lighting (whole house) | $200–$600 | $100–$250 | 1–3 years | Minimal |
How these upgrades compare with kitchens, bathrooms and curb appeal at resale is covered in renovations that increase your home value.
Insulation
Because heating dominates energy use in Canadian homes, insulation and air sealing usually return the most savings per dollar.
Where to insulate
| Area | Typical level in older homes | Common target | Cost to upgrade | Energy savings |
|---|---|---|---|---|
| Attic | R-20 to R-30 | R-60 | $1,500–$4,000 | 15%–25% of heating |
| Exterior walls | R-12 to R-20 | R-22 to R-28 | $5,000–$15,000 (exterior wrap) | 10%–20% of heating |
| Basement walls | R-0 to R-10 | R-20 to R-24 | $3,000–$8,000 | 10%–15% of heating |
| Rim joists | R-0 | R-20+ | $500–$1,500 | 5%–10% of heating |
| Crawl space | Varies | R-20+ | $2,000–$5,000 | 5%–10% of heating |
Insulation types
| Type | R-value per inch | Common use | Cost per sq ft |
|---|---|---|---|
| Blown-in cellulose | R-3.5 | Attics (top-up) | $1.00–$2.00 |
| Blown-in fibreglass | R-3.0 | Attics (top-up) | $1.00–$2.50 |
| Spray foam (closed cell) | R-6.0 | Basement walls, rim joists | $3.00–$6.00 |
| Spray foam (open cell) | R-3.7 | Walls (interior) | $1.50–$3.00 |
| Batt fibreglass | R-3.5 | Walls, basements (DIY) | $0.50–$1.50 |
| Rigid foam board | R-5.0 | Exterior wrap, basement | $1.50–$3.50 |
Heat pumps
Air-source heat pumps heat and cool with electricity at two to four times the efficiency of a furnace or electric baseboards, which makes them the mechanical upgrade with the largest effect on most Canadian homes’ bills.
Heat pump types
| Type | Cost (installed) | Heating efficiency | Works in the cold? | Suited to |
|---|---|---|---|---|
| Air-source (ducted) | $6,000–$12,000 | 200%–400% COP | Yes (cold-climate models to −25°C) | Homes with existing ductwork |
| Air-source (ductless mini-split) | $4,000–$8,000 | 200%–400% COP | Yes (cold-climate models to −25°C) | Homes without ducts; zone heating |
| Ground-source (geothermal) | $25,000–$50,000 | 300%–500% COP | Yes (all climates) | New builds or major renovations with land |
| Heat pump water heater | $2,500–$5,000 | 200%–300% COP | Yes (installed indoors) | Lower hot water costs |
Savings by the heating it replaces
| Current heating | Heat pump savings | Annual dollar savings (typical home) |
|---|---|---|
| Electric baseboard | 50%–70% | $1,000–$2,500 |
| Oil furnace | 40%–60% | $800–$2,000 |
| Propane furnace | 30%–50% | $600–$1,500 |
| Natural gas furnace | 10%–30% | $200–$700 |
Natural gas is relatively inexpensive in much of Canada, so the savings from a heat pump are largest when it replaces electric, oil or propane heating.
Windows and doors
| Upgrade | Cost | Energy savings | Payback | Notes |
|---|---|---|---|---|
| Double-pane to triple-pane | $800–$1,500 per window | 10%–15% of heating | 15–25 years | Return comes mostly from comfort and value, not payback |
| Single-pane to double or triple | $500–$1,200 per window | 20%–30% of heating | 8–15 years | A common first window upgrade in older homes |
| Insulated exterior door | $1,500–$4,000 | 2%–5% of heating | Long | Curb appeal plus energy savings |
| Storm windows (retrofit) | $100–$300 per window | 10%–20% of heating | 3–7 years | Lower-cost alternative to replacement |
Solar panels
| Factor | Details |
|---|---|
| Typical system size | 6–10 kW |
| Cost (before incentives) | $15,000–$30,000 |
| Annual production | 7,000–12,000 kWh (depends on location) |
| Ontario electricity savings | $1,200–$2,000 a year |
| BC electricity savings | $700–$1,200 a year |
| Alberta electricity savings | $1,000–$1,800 a year |
| Payback period | 8–15 years (depends on location and incentives) |
| Panel lifespan | 25–30 years |
| Home value increase | $10,000–$20,000 |
| Net metering | Available in most provinces; excess power is credited to the bill |
Grants, rebates and the mortgage
Provincial governments and utilities run rebates for heat pumps, insulation, windows and smart thermostats, and the programs, amounts and deadlines change often; current programs by province are listed in energy rebates by province. The federal Canada Greener Homes Grant and Loan are closed to new applicants, as explained in our Greener Homes Grant guide.
CMHC’s former Green Home program is now Eco Plus (for a newly built energy-efficient home) and Eco Improvement (for energy renovations after buying), each refunding 25% of a CMHC mortgage insurance premium; eligibility is on CMHC Eco Plus and Eco Improvement. Upgrades can also be paid for with a HELOC, a refinance or a renovation loan, compared in home renovation loans in Canada.
Some of the same work, such as a new roof or a modern heating system, can also lower home insurance premiums; see home upgrades that lower insurance premiums.
The usual order of upgrades
| Step | Upgrade | Why at this point |
|---|---|---|
| 1 | Air sealing and insulation | Lowest cost per dollar saved; fixes the building envelope before the mechanical systems |
| 2 | Smart thermostat | Immediate savings at low cost |
| 3 | Heat pump (or furnace upgrade) | Largest mechanical savings |
| 4 | Windows (if single-pane or old double-pane) | Comfort, savings and value |
| 5 | Heat pump water heater | Long-lived upgrade with steady savings |
| 6 | Solar panels | Sized better once consumption has been reduced |
Energy advisers usually start with the building envelope (insulation, air sealing, windows) before replacing mechanical systems: a heat pump in a poorly insulated house costs more to run and has to be sized larger than necessary. Planning a project budget is covered in the home renovation budget guide.
Sources
The figures and rules on this page come from these sources, last checked against them on September 25, 2026. How we check facts.