Installing a geothermal heat pump in your home is an effective way to reduce your monthly heating bills, but the up-front cost can unaffordable for some homeowners. While there are heat pump rebates and financing options available, not everyone can afford to access a HELOC or line of credit for a home improvement, even one that will save you money over time.
But did you know there’s another option for Nova Scotians? Nova Scotia Power (NS Power) offers financing for heat pumps installed by their approved contractors. The terms vary from three to ten years and the financing covers the cost of the entire installation.
Let’s take a look at the details of this program and calculate just how much you could save by using NS Power to finance your geothermal heat pump installation in Nova Scotia.
NS Power Financing Accepts Geothermal Heat Pumps
You can find more information about this financing program by visiting the website: HeatPumpsSetYouFree.ca. On this website you’ll find plenty of information about mainstream air source heat pumps, but not very much about the lesser known geothermal heat pumps. Don’t let this worry you – NS Power does accept geothermal heat pump installations into their financing program.
How the NS Power Heat Pump Financing Program Works
Here’s how the program works: Start by finding a geothermal heat pump installer in Nova Scotia that is on the approved contractor list (we’ve provided a list of Nordic installers below) and get a quote on the cost of your installation. When you accept the quote, your contractor will provide you with a credit application. Once you fill it out they will handle submitting it on your behalf to NS Power. NS Power will perform a credit check, and if you are approved, they will inform the installer who will move forward with your installation.
Once your heat pump is installed, you and the installer will sign the credit agreement to finance the total cost of your installation over a specific number of years at a specific interest rate (see the table below for options). Your installer will forward the agreement to NS Power. Once the agreement is received by NS Power they’ll remit payment to the installer and you’ll see your first payment reflected on your next power bill.
Nordic Geothermal Heat Pump Installers Approved by NS Power
In order to qualify for the NS Power financing program, you need to use one of the contractors on their approved list. Fortunately, several of those contractors already install Nordic heat pumps. They are:
- Acadia Refrigeration (Kentville)
- Cunning Energy (Sackville)
- W.R. Graham Services (New Glasgow)
- Advanced Heating Solutions (Springhill)
- Langille’s Plumbing & Heating Ltd. (Bridgewater)
Financing Your Geothermal Heat Pump Installation Through NS Power
When you take advantage of this program you are entering a lease-to-own agreement with NS Power. This means you’ll pay for the heat pump and equipment over a period of time. Once you pay off the entire balance owing, ownership of the machine and equipment is transferred for $1 to you, and you officially own your geothermal heat pump. If you sell your home before you pay back your loan, NS Power can transfer the lease to the new owner. You can also pay the loan back in full by terminating the agreement at any time.
Depending on the length of the term of the loan, your interest rate will vary. Here’s a table of the different interest rates and corresponding loan terms:
*Source: NS Power
Save Money By Installing a Geothermal Heat Pump Financed by NS Power
Is financing your geothermal installation worth it? Let’s look at an example of retrofitting a home from electric baseboard heat to a geothermal heat pump, using NS Power’s financing program.
Your home is 2,000 square feet and is heated with electric baseboards. It consumes 150kWh of heat per square meter, per year, for a total of 27,870kWh. Since electric baseboards are 100% efficient, you’ll need one (1) watt of electricity to generate one (1) watt of heat. This means you’ll need 27,870kWh of electricity to heat your home for a year. With local electric rates at $0.16/kWh, your yearly heating costs are:
27,870kWh x $0.16 = $4,459.20 per year
That’s $371.60 per month.
Installing a geothermal heat pump would reduce this amount significantly because a geothermal heat pump harvests free heat from the earth and moves it into your home. This means that it takes one (1) watt of electricity to harvest four (4) watts of usable heat energy.
Your home still requires 27,870kWh of heat to be comfortable year round. But with a geothermal heat pump, you’ll only need to use a quarter of the electricity to harvest that much heat, the other three quarters will come from the ground. This means you’ll only need to purchase (27,870kWh/4) 6,967.50kWh of electricity to harvest enough heat for your home. Using a local utility rate of $0.16/kWh, your yearly heating costs will be:
6,967.50kWh x 0.16 = $1,114.80
That’s $92.90 per month. Switching to geothermal will save you $278.70 per month on your power bill.
Factoring in Installation Costs
Now let’s look at whether the monthly savings calculated above is enough to offset the cost of financing your heat pump installation.
If your heat pump installation costs $15,000 and you financed it over 10 years through NS Power at an interest rate of 6.9%, your monthly payment would be $173.39.
The monthly savings calculated above ($278.70) would be more than enough to cover the monthly cost of financing your new geothermal system ($173.39). In fact you would still save:
$278.70 – $173.39 = $105.31 per month
That’s $1,263.72 per year based n today’s cost of electricity. Over a 10-year period your savings will actually be greater due to the yearly rising cost of electricity. Not bad for a brand new heating system. In review, the NS Power financing program is a great way to start saving money on your heating bills immediately while spreading the initial cost of the installation out over several years.