Updated August 2026
Through explainers, we aim to provide useful factual and contextual information related to Canada’s clean energy transition. Please use this as a resource, and let us know if there are any topics that you would like to see for future explainers.
Successive oil shocks have strained household budgets. With gasoline prices remaining high for much of 2026, compounding ongoing cost of living concerns, it is not surprising that affordability issues are at the top of Canadians’ worry list.
Around the world, governments have responded to this issue in different ways. Notably, Europe’s answer to the war in Iran and the subsequent oil price spike has been to double down on clean energy, setting even more ambitious targets to generate more power domestically from renewables, and accelerate plans to electrify homes, businesses, and transportation.
This approach is about more than just energy security—it’s about maintaining affordable energy for bill payers. Studies both in Canada and abroad have shown that a shift to clean energy generally saves households money. After all, electricity prices are not as vulnerable to geopolitical events, and many electric technologies are significantly more efficient than their fossil-fuel-powered equivalents.
This explainer summarizes some of the most relevant takeaways from studies on the impact of electrification and climate policy on the cost of living.
Clean technologies can reduce household energy bills
Our most recent analysis of household energy savings (updated April 2026) explored how much Canadians living in a townhome, condo, or detached home could save if they switched their cars, space and water heating, and cooking to efficient electric technologies (taking the upfront cost into account). Specifically, our analysis found that:
- EVs offer the biggest wallet help, saving typical drivers about $23,000 to $32,000 over 10 years of ownership. That translates to approximately $530 to $680 a month.
- Even with the carbon price and key incentives gone, heat pumps are still cost-savers when switching from conventional electric and oil heating—but only in certain cases when switching from natural gas at present. Heat pumps also offer benefits beyond cost worth considering, like cooling in the summer and more even heat in the winter.
- In B.C., where many households are adding heat pumps for their cooling capabilities, a detached homeowner could save $57 a month, or $684 a year, by using a heat pump for space and water heating.
- Some of the biggest space heating savings come when switching from electric baseboard heating. A separate B.C. study that examined a province-wide switch to heat pumps for space heating found household savings of about $170 a year for those currently using natural-gas heating with standalone air conditioning, and $850 a year for those using electric-resistance heating with standalone air conditioning.
- This finding was reinforced by a 2026 study from the Build Decarbonization Alliance that found electricity bill reductions from switching from baseboards to heat pumps in the thousands per year, depending on the location.
- To view your own household’s potential savings, along with province-specific rebates, head to our customizable online calculator at mycleanbill.ca.
The transition to clean energy can lower overall household energy costs
A Canadian study by the Transition Accelerator considered the impact of reaching net zero on household energy bills, finding that the majority of households will save money in a net-zero 2050.
- Specifically, in three 2050 electricity rate scenarios (low, mid, and high), all of which assume higher electricity rates than today, the median household saved money compared to today.
- Even in the high-rate scenario, the median household saved about $150 per year. Under the low-rate scenario, the median household reduced their bills by over $1,000 per year.
Source: Transition Accelerator
- In this study, a minority of households experienced energy cost increases (generally those without a car or in regions with higher projected electricity rates) and will require specific support through the energy transition.
Globally, the picture is similar. The International Energy Agency’s World Energy Outlook 2025 found that, under current global policies, average household energy bills in advanced economies would decline between 2024 and 2050. In a scenario where governments introduce policies to reach net zero by 2050, bills would fall even further.
Source: International Energy Agency
Reducing emissions can lessen the financial impacts of climate change on households
Another study from the Canadian Climate Institute found that climate change could have significant financial consequences for Canadian households, but that reducing emissions can substantially limit those impacts.
- According to the report, Canada’s GDP could fall by 12% by the end of the century while household incomes could fall as much as 18% compared to a “stable-climate” scenario. The study projects that lower-income households would be the most adversely affected.
- At a household level, the study found that climate-related damages increase the average household’s cost of living by more than $700 each year “in the form of higher grocery bills due to supply-chain disruptions, rising home insurance premiums, and tax hikes to pay for disaster recovery and infrastructure repairs.”
- Conversely, global emissions reductions alone reduce climate damages to Canada’s economy by more than half compared to a higher-emissions scenario.