If you have an oil furnace heating system and have been thinking about switching, this program may be for you.
The Ontario and federal governments are investing nearly $60 million to help lower-income homeowners switch from expensive oil heating systems to energy-efficient cold-climate heat pumps through the expanded Oil to Heat Pump Affordability (OHPA) program.
Announced Sept. 20, 2025, the partnership between the federal government and the Independent Electricity System Operator (IESO) brings a total program investment of $59.4 million. The government of Canada is contributing nearly $37.5 million, while the IESO is adding another $21.4 million to help eligible Ontarians reduce home heating costs and improve energy efficiency.
The program is targeted at income-eligible homeowners currently heating their homes with oil. Those who qualify can receive up to $25,000 toward the installation of a new cold-climate heat pump system.
According to the IESO, switching from oil heat to a heat pump can save families an average of $1,400 annually on heating costs. The systems also provide cooling during the summer months, offering year-round comfort.
“Heat pumps are designed to use significantly less energy than traditional oil heating systems,” the program states. “Their efficiency means every dollar spent on electricity generates more heat compared to oil heating.”
Modern cold-climate heat pumps offered through the program are specifically engineered to operate effectively even during harsh Ontario winters, with systems capable of performing in temperatures as low as -30 C. The systems are designed to either operate independently or alongside backup heating systems when necessary.
Beyond lowering utility bills, the program highlights several additional benefits, including reduced maintenance costs and quieter operation. Unlike oil systems, heat pumps do not require fuel deliveries, annual burner tune-ups, or tank maintenance. They also eliminate combustion-related odours, soot, and fumes.
As part of the Energy Affordability Program under the Save on Energy brand, homeowners who receive a heat pump through the program are also eligible for free maintenance visits at the one- and two-year marks following installation.
To qualify for an in-home heat pump assessment, households must fall below specific before-tax income thresholds. A single-person household must earn less than $48,220 annually, while a two-person household must earn less than $68,193. The income cap rises to $83,518 for three people, $96,439 for four people, $107,823 for five people, $118,113 for six people, and $127,576 for households of seven or more.
The IESO says the expanded OHPA initiative is part of a broader effort to make life more affordable for lower-income Ontarians while reducing environmental impacts associated with home heating.
Homeowners interested in applying or learning more about eligibility can call 1-844-770-3148 or visit Save on Energy’s application page.
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