95% LOWER EMISSIONS: Sweden’s Shift to Heat Pumps Holds Lessons for Canada

Sweden’s early shift from fossil-fueled heating to electric heat pumps suggests a carrot-and-stick approach of incentives and regulation could help Canadians achieve the lowered costs and 95% drop in building heating emissions that Swedes have enjoyed since the 1990s.

“In the 1970s, three-quarters of Swedish homes were heated with oil boilers,” reports CBC News. But now, electric-powered heat pumps have almost entirely replaced oil in single-family homes, while most multi-family units rely on district heating.

• Be among the first to read The Energy Mix Weekender
• A brand new weekly digest containing exclusive and essential climate stories from around the world.
• The Weekender:The climate news you need.

Subscribe

The story of this remarkable transition was recounted last month at a symposium in Mississauga, Ontario, by Martin Forsén, a veteran in the Swedish heating industry and president of the European Heat Pump Association. He said a similar shift is inevitable for Canada.

“I don’t think it’s a question of ‘if,’ it’s just a question of when,” Forsén told his audience at the Heating, Refrigeration and Air Conditioning Institute of Canada (HRAI) heat pump symposium.

But the 95% drop in home heating emissions in his country did not happen overnight, Forsén explained. The first six years of Sweden’s journey to electric heat—roughly 1994 to 2000—was “all about the money,” he said. It was a period when the heating industry and homeowners were preoccupied with comparing the costs of new technology versus the old—and often hesitating to make the leap.

Canada is at this introductory phase of the transition, Forsén said, cautioning that at this point, neither the media nor the heating, ventilating, and air conditioning (HVAC) industry will likely be reliable advocates of heat pumps. In his experience, the news coverage tends to frame the devices as an “interesting” niche technology, while the industry itself may be unconvinced, discouraging prospective buyers.

This is where the government must step in with its basket of sticks and carrots, just like Sweden did in 1990, with a carbon tax that raised the price of heating oil.

“It was a pain for the consumers,” Forsén said. “They really had to think, ‘Can we do anything about it?’”

Sweden had a surplus of electricity at the time, and the resulting low prices made heat pumps attractive to homeowners, CBC writes. “Canada introduced its own carbon tax in 2019 and will keep ramping it up yearly until 2030, which will likely cause the price of fossil fuels to rise relative to electricity.”

Forsén also encouraged the use of regulation, like building codes that force new buildings to adopt heat pumps, and subsidies to help homeowners retrofit older homes, enabling them to overcome initial costs and plan for the new installations.

Canada does already subsidize heat pumps through the Oil to Heat Pump Affordability Grant, the Greener Homes grant, and loan programs, notes CBC. However, asked if he thought the current carbon price and subsidies will be enough to move Canada beyond the introductory stage, Forsén said: “No, I think you need more.”

For example, a provision in the European Union’s green transition program requires existing buildings to meet minimum energy performance standards before being sold or rented to someone new, something Forsén described as “quite a good idea”. Ottawa has proposed developing such a “model retrofit code” by 2024, CBC notes.

But there is one more piece to the solution, Forsén suggested. Testimonials by early adopters about cost savings and increased comfort to family, friends, and neighbours played a critical role in accelerating heat pump uptake in Sweden after 2000, as did social pressure.

Describing his own tipping point, Forsén said he knew a sea change was afoot when his ground-source heat pump was installed in 2002. “There was a drilling rig in the neighbourhood pretty much every single week,” he recalled, producing a degree of social pressure from neighbours. Suddenly, everyone knew: “you have to make a shift,” Forsén said.

But Canada has a lot of catching up to do. As of 2021, heat pumps supplied only 6% of the country’s residential heating, CBC writes, though that figure may not reflect the impact of new incentives.

Still, market forces could work in Canada’s favour. BloombergNEF’s Michael Liebreich is bullish on the future of electrical heating, writing that the sector could complete the investment hat-trick initiated by renewables and electric vehicles, which attracted nearly US$500 billion each in investment dollars in 2022. Next, the combined opportunity to electrify heat, HVAC, and refrigeration “will reach the half-trillion-dollar mark as soon as 2030,” Liebreich predicts.

Liebreich cites an average 36% growth rate in heat pump installations in Europe over the past two years. In the United States, “4.3 million heat pumps were installed last year, up from 2.3 million in 2015 and, for the first time, heat pumps outsold furnaces.”

That trend “is set to continue,” he adds, “with US$4.5 billion set aside under the Inflation Reduction Act to help consumers ditch gas appliances and go electric.”