Toronto Star- Furnace Upgrade

The Toronto Star June 2009

By Ellen Roseman Personal Finance Columnist

Replacing a furnace is costly, ranging from $3,000 to $5,000 installed.

You can wait for an older furnace to reach the end of its life, which happens (on average) between 18 and 22 years. Or you can replace it before a breakdown to enjoy a variety of rebates, grants and tax credits that subsidize the cost.

Who knows if a helping hand will still be around by the time your furnace breathes its last?

Here are some subsidies for furnace upgrades:

  • Up to $1,250 in federal and provincial rebates under the ecoEnergy retrofit program. You have to get a home energy audit and do the work within 18 months, followed by a second energy audit.
  • A $125 rebate on a mid-efficiency or high-efficiency furnace with an electronically commutated motor, installed by Dec. 31, from the Ontario Power Authority’s Every Kilowatt Counts program.
  • A $100 rebate from Enbridge Gas for a high-efficiency natural gas furnace, installed by Nov. 30, which carries the Energy Star mark.
  • A 15 per cent tax credit on home renovation spending from $1,000 to $10,000, incurred by Feb. 1, 2010.

New federal rules will come into effect next year to stop the sale of mid-efficiency furnaces manufactured after Dec. 31.

A mid-efficiency furnace burns about 80 per cent of the gas you pay for. It’s better than a conventional gas furnace, which is 60 per cent efficient.

But with a new high-efficiency furnace, you can keep 90 to 97 per cent of the fuel inside your home.

So, why do some homeowners opt for a mid-efficiency furnace? It uses the chimney to vent gases.

A high-efficiency furnace doesn’t use the chimney. The gases are vented through a plastic pipe out the side wall or basement of the home.

Venting can be an issue if you live in a compact house in a densely packed urban area. You can’t drill holes too close to windows or dryer outlets.

“There are real challenges doing venting in the city,” says Roger Grochmal, president of Atlas Cares, a home heating and air conditioning contractor.

“Even if your mid-efficiency furnace hasn’t reached the end of its useful life, you may want to think about replacing it now.”

Mid-efficiency furnaces are still installed every day, says Direct Energy’s Dave Walton, director of home ideas.

“Some people just have a preference. It’s more about venting concerns.”

A home energy audit can help you pick the right furnace for your house. The cost is $300 to $350, partially offset by a $150 rebate from the Ontario government.

Many homeowners are replacing their central air conditioning, too.

“It’s a really good time to do an upgrade,” says Grochmal. “Of every 10 furnaces we install, we’re doing six to seven air conditioning units at the same time.”

You can get up to $500 in federal and provincial rebates for upgrading central air conditioning under the ecoEnergy retrofit program.

Another rebate for air conditioning replacement is offered by the Every Kilowatt Counts program. It’s $250 or $400, depending on the seasonal energy efficiency rating (SEER).

“The ways to max out the grants are quite astonishing. There are serious savings to be had,” says Walton.

But you shouldn’t let the rebates drive your decision-making, Grochmal warns. There may be a better solution for your home that doesn’t get you the maximum rebate.

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