Retrofitting Your Home to Save on Fuel Costs and Reduce Emissions

Why Retrofit

The three main reasons to retrofit your house are: 1) savings on heating and cooling bills; 2) a more comfortable home with fewer drafts, and 3) a significant reduction in the greenhouse gas (GHG) emissions causing climate change.

An energy retrofit of an existing building will make it more energy efficient, which means that it will take less energy to heat or cool it. Using less energy will mean that you will cut heating costs. Most Ontario residences are heated by burning a fossil fuel: natural gas, propane or heating oil, so cutting energy use for one of these homes will reduce emissions.

Increasing energy efficiency for a home heated by electricity will reduce your heating costs, but will do little to reduce emissions because 96% of Ontario’s electricity comes from non-fossil sources: nuclear, hydroelectric, solar and wind.

At present, buildings account for 18% of greenhouse gases in Canada, so almost all existing homes must eventually be retrofitted for better energy efficiency to reduce their emissions. Otherwise, we will have no chance of hitting Canada’s target of net-zero emissions by 2050. (Net-zero means that we must reduce our GHG emissions enough that we can suck carbon dioxide—CO2, the main GHG—out of the atmosphere as fast as we add it. However, the world is still developing the technology to remove the CO2 from the atmosphere.)

The cost of retrofitting can be reduced by financial incentives from several different sources. The goal of this article is to provide you with enough information to guide your retrofitting, and to point out some of the financial incentives available. For many homeowners, a retrofit can have a relatively short payback time as discussed below.

Getting Started

A retrofit can have several different components: adding more insulation in the walls and ceiling, changing the windows to high efficiency ones, reducing air infiltration, and changing the heating system.

The starting point, and to access any incentive funding, is to obtain the services of a home energy advisor who has the required “EnerGuide” certification through NRCan, Natural Resources Canada. The advisor will walk you through all options for saving energy in your home, and will help you prioritize the work. Information on the service provided by the energy advisor is given here. A certified energy advisor anywhere in Ontario can be found here.

Once you know what you need done, it is time to locate a contractor to do the work for you. Be sure to ask for credentials and check reviews when choosing a contractor.


Your Attic

For insulation, the most important area with the largest impact is often the attic and unfinished basement walls. They are easy to access and can make an enormous difference to your heating requirements depending on how much insulation you start with. The insulating value of a material is given as its “R-value” and this is always printed on the insulation you buy; the higher the R-value, the better the insulating value. For example, blown-in cellulose and fibre-glass batting both have an R-value of about 3.5 per inch of thickness.

The insulation in the attic in Ontario should be about R-60, which would require about 60/3.5 = 17 inches (43 cm) of cellulose or fibreglass. If you have much less than that, your attic is likely a good starting point. However, there must also be a “vapour barrier” on the warm side of the insulation. Otherwise, moisture in the house air that leaks into the attic will condense to form water than will reduce the insulation value and possibly cause wood to rot. For this reason, it is recommended that insulation be installed by a professional. For attics, an excellent information resource is found here.

Other walls

Often a major area of heat loss is through uninsulated main walls. Sometimes insulation can be blown into the wall cavity fairly inexpensively but again, use a professional for the job. You again need to ensure a vapour barrier on the warm side of the insulation, but this can just be a good painting job for most of the wall.

Embodied carbon

As one of your goals in retrofitting your house should be to reduce the greenhouse gases, it is also important to consider the amount of such gases released when the insulation is manufactured. This is called “embodied carbon”. If you choose an insulation with a high embodied carbon it is possible that you will never reduce your greenhouse gas emissions enough by reduced fuel consumption to make up for the extra embodied carbon.

Luckily, there is almost always an insulation alternative with a low embodied carbon. As just one example, extruded polystyrene board (XPS) has an embodied carbon about 20 times larger than expanded polystyrene (EPS). A chart comparing common insulations is found here. Note that cellulose is given a NEGATIVE embodied carbon value in this chart because the trees used to produce the cellulose absorb carbon from the atmosphere in order to grow, and this carbon is stored in the insulation.

Spray foams also have a high embodied carbon because of the gases used to expand the foam; on average, each kilogram of these agents has as much global warming potential as 3400 kg of carbon dioxide. Therefore, for an uninsulated basement for example, it is far better for the climate to build a wood-stud wall and insulate with fibreglass batting that to use a spray foam. The bottom line: be sure to ask your contractor about the embodied carbon in your insulation.


A major source of heat loss is through even small openings to the outside. For example, a 1/8-inch gap under your front door is equivalent to a hole in the wall 1 inch wide and 4 inches long (2.5 cm x 10 cm). Warm air rises, so it typically leaves your house through the attic. Be sure any access doors to the attic are well sealed, as is any plumping that goes through it. Ceiling lights can be a major source of air leakage if they are not sealed properly, as are electrical wall outlets.

Part of the home energy inspection involves a “blower-door test”. The energy advisor seals off an outside door except for an opening for a large fan. With all other outside doors and windows closed, and inside doors open, the fan is turned on to suck air out of the house. That means that some air is getting sucked in from the outside wherever there is an opening. By looking for obvious drafts in suspected locations the advisor can detect many points of air leakage. Also, by measuring the difference in air pressure between the interior and exterior of the house, the advisor can tell how many “air changes per hour” (ACH50) your house would have at a pressure difference of 50 Pa. Modern homes should have an ACH50 of 4 or less. An ACH50 of 5 indicates a semi-airtight home and is a reasonably good result for older homes; 6 to 9 indicates a moderately leaky home and over 9 indicates a very leaky home. Some leaks can be sealed with caulking material or duct tape, for example, and foam pads can be inserted under electrical outlet faceplates.


A major source of heat loss is through windows. A well insulated house with 20% of its walls occupied by windows can lose 20 to 30 % of its energy through and around windows. A single-pane window has a typical R-value of only 0.9; a double-pane window with a 0.5-inch air space has an R-value of about 2 and a triple-pane window with a 0.5-inch air space has an R-value of about 3.2 .[i] Modern 2-pane windows often have a “low-emissivity” coating on the inside pane, which prevents some of the radiant heat energy from escaping and raises the R-value to about 3 or higher. A lot of the heat loss in older houses is from air leakage around the frame, so installing new multi-pane windows with close-fitting frames can also improve air leakage. However, such windows are expensive so be sure to ask your energy adviser if this is a wise choice.

Replacing your heating system

As the world approaches its net-zero emissions target in 2050, almost all homes will eventually have to be heated electrically from low-carbon energy such as wind, solar or nuclear, but reducing fossil-fuel use as much as possible quickly is a critical part of the path to net-zero. Most city homes in Ontario are currently heated by burning natural gas, whereas most rural homes are heated by burning propane, heating oil or wood. All of these fuels produce carbon dioxide (CO2), the most common greenhouse gas, with natural gas producing the least CO2 per unit of heat, followed by propane, with heating oil being the worse. Unfortunately, some natural gas escapes into the atmosphere during production and transmission, where it is a much more serious greenhouse gas than CO2, but the homeowner has no control over that. If the wood burned is replaced by growing trees, the process is neutral as far as GHG emissions are concerned. However, research has shown that the particulate matter in smoke from wood fires can be a significant cause of asthma in children and other diseases.

Air Source Heat Pumps

Especially for rural homes heated with propane or heating oil, a switch to an air-source heat pump makes enormous sense, both economically and from a climate perspective. A heat pump transfers (pumps) heat from a colder to a warmer temperature. The most common heat pump is a refrigerator which transfers heat from the food to the room: the food gets cool when placed inside, and the coils on the back of the fridge get warm from the heat from the food. An “air-source heat pump” takes heat from the outside air (the “source”) and transfers it inside the house as hot air. It can actually transfer up to 4 times the amount of electrical energy required to run the heat pump. Enormous progress has been made in the last few years with heat pumps, and they can now transfer more energy than it takes to run them until the outside air is about -25 oC! If it gets colder than this, you need a backup heat source which could be an electric heater, or even your current propane or oil burner. For example, in the winter of 2020-21 there was only one day down to -25 oC.[ii] Since the Ontario electricity used to run the heat pump is so clean, very little GHGs are produced with a heat pump.

Another big selling point of air-source heat pumps is that they can be run in reverse to serve as air conditioners on hot summer days. This is of major importance, with the number of days over 30 oC predicted to increase from 10 per year in the 1990’s to 52 per year in the 2060’s under climate change.

Several recent studies have shown that, for a home now using heating oil, propane, or electric baseboard heaters, an air-source heat pump can pay for itself in as little as 5 years, after which you’re saving money continuously. If your home has a forced-air system now, it is straightforward to install the heat-pump output into your existing ducts. If you don’t have a forced air system already, you can buy a ductless “mini-split” system which has individual hot-air output units in up to eight individual rooms, depending on the manufacturer.

Ground Source Heat Pump

Another option that might be considered is a ground-source heat pump, for which the heat is transferred from below ground to the house, rather than from air, using underground tubing filled with antifreeze. The temperature 6 feet below ground level is very constant year-round at about 15 oC. This makes the heat pump much more efficient in its energy transfer to the house in winter even when the air temperature becomes very cold, and also more efficient for air conditioning as the cooled 15 oC air can simply be pumped directly into the house, requiring very little electrical energy. However, the installation of the underground tubing is much more expensive up-front, so check your costs carefully. For small properties, it is possible to drill vertical holes for installing the tubing, but this is substantially more expensive than putting them horizontally about 6 feet below ground.

Space heating typically accounts for about 60% of a home’s energy needs, with hot domestic water adding about 22%, for a total of about 80% of home energy use. [iii] Combination heat pumps which provide both space heating and domestic hot water can reduce energy costs and GHG emissions even further.

Of course, an air-source heat pump can also be used to replace natural gas heating to reduce GHG emissions. However, of the three fossil fuels used commonly for home heat, natural gas is substantially less expensive, so it is a more difficult sell as an alternative form of heating. This may change as the price on carbon continues to climb towards its 2030 target of $170 per tonne of CO2 produced. However, for those who do have natural gas available, a switch from propane or heating oil to natural gas makes enormous sense. It has a fairly short payback time as well as greatly reducing GHG emissions. Choose your gas furnace or boiler carefully: a natural gas furnace can have a conversion efficiency (chemical energy to heat energy) up to about 97%, which saves on both fuel costs and GHG emissions. A switch from an 80% efficient oil furnace to a 97% efficient gas furnace can reduce your GHG emissions by about 40%! 

A final caution for your selection of a heat pump. Most modern heat pumps use a refrigerant gas called R-410A which has been shown to be much better for the ozone layer than earlier gases if it leaks into the atmosphere. However, R-410A is 2090 times worse than CO2 as a greenhouse gas, so is in process of being replaced by a new gas called R-32, which has no effect on the ozone layer and has only one-third the global warming potential of R410A.[iv]

Financial Incentives

In its last budget, the federal government promised major incentives for home retrofit programs called the Greener Homes Grant program. This program provides grants up to $5000 for retrofits plus $600 towards the energy advisor’s home audit. To be eligible for a grant, at least one of the recommended improvements must be carried out. See the final details released on May 27, 2021 here

In addition to the Greener Homes Grant program, in summer 2021 the details of an interest-free loan program will be announced. It will provide homeowners up to $40,000 to help complete deep home retrofits. This loan program will help make initiatives like the Canada Greener Homes Grant accessible to more homeowners. Register here to receive updates when the loan initiative becomes available.

Until that time at least, Enbridge gas is offering their Ontario customers up to a $5000 incentive for a range of home retrofit options. See here for full details.

See here for a complete, up to date listing of Energy Efficiency Programs in Canada.


This article was last updated in June, 2021, so some of the numbers and incentive programs may have changed. It is the reader’s responsibility to check any information provided here before making decisions.






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