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More than two-thirds of Canadian households would pay less for combined transportation, and home heating and cooling costs in 2050 versus today by going fully electric. That’s according to a new study attempting to model the financial impact of switching from fossil fuels.
Canada’s federal government has committed to reach net-zero greenhouse gas emissions by 2050. The report titled “Household Energy Affordability in a Net-Zero Future” was recently published by Electrifying Canada’s Transition Accelerator. The Canadian climate-focused group lists a diverse set of partners, spanning big banks, mining companies, and utilities.
In the report, researchers analyzed the cost of buying, operating, and maintaining equipment for heating, cooling, and transportation. This includes items like electricity or natural gas bills, gasoline or diesel for vehicles, the purchase price of heat pumps, furnaces, and air conditioners, as well as expected maintenance and parts replacement. Costs were examined under low, mid, and high electricity rates, all of which assume higher costs than today.
Researchers found in every rate scenario, all households that regularly drive a personal vehicle will save money on their private transportation costs. They expect electric vehicle prices will have reached cost parity with internal combustion cars by 2050.
“While a majority of households will experience energy wallet savings under the full range of electricity rate scenarios, a significant portion of households will see increases in their energy wallet costs relative to today,” lead author Nick Martin, director of electrification at the Transition Accelerator, wrote in the report.
“While this approach does not directly measure affordability, it provides a clear indication of whether affordability concerns are likely to rise or fall as the transition progresses, assuming no additional policies or support mechanisms are implemented,” he added.
According to the report, 77 per cent of households in the low electricity rate scenario would pay less for home and automotive energy costs in 2050 than they do in 2024, with a median savings of $1,311. In the mid-rate scenario, 67 per cent of households achieved savings, with a median of $1,174. In the high-rate scenario, 52 per cent achieved savings, with a median of $1,038.
The 23 per cent who paid more in 2050 than 2024 under the low-rate scenario saw a median increase of $764. The 33 per cent who paid more in the mid-rate scenario saw a median increase of $861. The 48 per cent who paid more in the high-rate scenario saw a median increase of $1,041.