Energy efficient homes and buildings in Canada

Updated March 23, 2023

An energy efficient home is one that controls the moisture and heat flowing in and out of it. The more energy efficient a home, the more cost effective it is and the better it is for the environment. New homes can be built to specific environmental standards, and existing homes can be renovated or retrofitted to improve their energy efficiency. Learn more about the standard options available so you can benefit.

Energy efficient homes

Whole-Home System approach

Think of your home as more than simply a floor, four walls and a roof. It is actually a system that includes the heat, air and moisture movement. Improvements in building technology have made it possible to manage those components better and improve a home’s energy efficiency.

The energy use in a residential home can be traced to five areas, say the folks at CityGreen, a non-profit energy organization:

  • Space heating, 46 per cent
  • Water heating, 30 per cent
  • Appliances, 17 per cent
  • Lighting, 6 per cent
  • Cooling, 1 per cent

Not all homes are created equal in when it comes to energy efficiency. Canada has a variety of standards that indicate if a new home meets specific energy usage criteria, and it’s worth knowing a bit about the major standards. They fall under the purview of EnerGuide, the Canadian government’s official mark for its performance rating and labelling program.

An EnerGuide rating allows buyers to compare the energy efficiency of a product to that of other, similar products. You can obtain an EnerGuide rating for your own home with an assessment by a home energy advisor licensed by Natural Resources Canada and analyzed to evaluate:

  • Heating and air conditioning equipment
  • Ventilation equipment
  • Domestic hot water systems
  • The air infiltration or leakage rate
  • Air/vapour barriers
  • Insulation levels

The resulting written report will suggest ways to improve your home’s energy efficiency and save costs, and it will provide you with an EnerGuide rating system label.

Now, let’s take a look at the types of energy standards that can be applied to newly built homes.

Energy Star

Energy Star homes are built to a higher standard than the minimum specified by building codes. They’re built by a licensed Energy Star builder and contain Energy Star appliances—those that are in the top 15 to 30 per cent in energy efficiency for their class. They have an EnerGuide rating of 80 or more.

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Passive House Standard

The passive house standard was developed in Europe to create cost-effective, low-energy homes, with less complex heating and cooling systems, says the Green Building Council of Canada. This rigorous design and building standard has a goal of 80 to 90 per cent energy savings per building. It focuses on ensuring the building is airtight and well insulated to drastically reduce energy needs.

Many cities are adopting passive house standard for their own building codes. This short video highlights the Metro Vancouver region’s passive house program.


These homes are built to the R-2000 standard that came into effect in 2012 and are considered best-in-class energy efficient homes. They are built by licensed R-2000 builders using cutting-edge technology. Usually, they include these features:

  • High insulation levels in walls, ceilings and basements
  • High-efficiency windows and doors
  • High-efficiency heating
  • Whole-house mechanical ventilation
  • Testing to ensure minimal air leakage
  • Water-conserving fixtures

Once inspected and approved, R-2000 homes receive a Natural Resources Canada certificate and a label that is placed on the electrical panel.

Net Zero

A Net Zero Energy (NZE) home is one that annually produces as much energy as it consumes. In Canada, such homes are not yet market-ready, but the government is working with partners to test and evaluate prototypes that are seeking to meet this standard. At present, construction of a NZE home is costly, but the government’s goal is to reduce the cost of the necessary technologies in order to construct such dwellings on a large scale.

Your Own Improvements

Although you may not be building a new home, you can still improve the energy efficiency of your existing home. An EnerGuide assessment is one option, but even without it, you might consider:

  • Upgrading your heating system to a high efficiency (Energy Star) system
  • Improving the insulation in your walls, attic, basement and crawl space
  • Upgrading your hot water heating system and adding low-flow showerheads, a multi-option flush toilet and faucet aerators
  • Stem some of the air leakage from your home with air sealing and weather stripping.

When considering these improvements, check to see if your provincial or municipal governments have incentive or rebate programs to assist with the cost. Why not save money in the short term while you improve the long-term energy efficiency of your home?

Commonly asked questions

What is one downside of energy efficient homes?

Building an energy efficient home often costs more at the outset, as efficient systems, materials, and appliances are typically more expensive than their low-efficiency counterparts.

How much does it cost to build an energy efficient home (in Canada)?

Depending on the scope of the efficiency improvements, building an energy efficient home adds, on average, about 10% to the cost of building a home.

Can I get a home energy rebate?

There are many rebates available for energy efficient homes, including federal rebates like the Canada Greener Homes Grant, plus rebates available from municipal governments and utility companies.

Want to learn more? Visit our Homeowner resource centre for more articles created specifically to help you navigate homeownership. Or, get an online quote in under 5 minutes and find out how affordable personalized home insurance can be.


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