Home Energy 101: How to Lower Energy Bills in Ontario

The fastest way to lower energy bills in Ontario is to focus on heating first, because space heating is the single largest use of energy in most homes. After that, choosing the right electricity price plan, sealing air leaks, and replacing old equipment at the end of its life usually deliver more than small gadgets or habits alone.

This guide is a starting point. It explains where your energy goes, how your bills are built, and how to put upgrades in a sensible order for an Ontario home.

Where does the energy in an Ontario home go?

Natural Resources Canada's end-use data for Canadian homes gives a useful picture. The shares below are national averages; a home with electric heat, an electric vehicle or a pool will look different.

End use	Approximate share of home energy
Space heating	~62%
Water heating	~19%
Appliances	~13%
Lighting	~4%
Space cooling	~2%

Two lessons follow. First, anything that reduces heat loss or makes heating more efficient has the biggest potential effect. Second, lighting and cooling are a small share of the total in our climate, so they are worth doing cheaply but rarely worth large spending on energy grounds alone.

Climate matters too. Toronto sees roughly 3,500–3,600 heating degree days a year, Ottawa about 4,500, and Sudbury or Thunder Bay roughly 5,000–5,700. The same house uses noticeably more heat the farther north it sits, so the same upgrade pays back faster in colder regions.

How do Ontario energy bills work?

Most Ontario homeowners pay for electricity and natural gas separately.

Electricity comes from your local distribution company (LDC), such as Hydro One, Toronto Hydro, Alectra, Hydro Ottawa or Elexicon. The electricity itself (the commodity) is priced under the Regulated Price Plan set by the Ontario Energy Board. From 1 November 2026 you can choose between:

• Time-of-Use (TOU): 9.1¢/kWh off-peak, 14.6¢ mid-peak, 18.9¢ on-peak.
• Ultra-Low Overnight (ULO): 3.7¢ from 11 p.m. to 7 a.m. every day, but 37.7¢ on weekdays from 4 to 9 p.m.
• Tiered: 11.2¢/kWh for the first 1,000 kWh a month in winter (600 kWh in summer), then 13.2¢.

On top of the commodity, you pay delivery, regulatory charges and 13% HST, minus the Ontario Electricity Rebate, which is 15.7% as of 1 November 2026. A typical Toronto-area home on TOU pays roughly 15–19¢ per kWh all-in before the rebate (an estimate; delivery costs vary a lot by LDC and are higher in rural areas). See our Ontario electricity price plans guide and current figures on our electricity rates page.

Natural gas is mostly delivered by Enbridge Gas. A typical detached home with gas heat and a gas water heater uses about 2,000–2,600 m³ a year. All-in variable cost is roughly 35–50¢/m³, including supply, transportation and delivery (an estimate that changes quarterly), plus a fixed monthly charge. The federal carbon charge on natural gas was removed on 1 April 2025, which lowered gas bills. Our gas bill guide walks through each line.

Tip: Pull out 12 months of both bills before you change anything. Note your total kWh and m³. That baseline lets you see whether an upgrade actually worked.

What should you do first to lower energy bills in Ontario?

Energy advisors tend to follow a "reduce, then replace" order: cut the heat your house loses, then right-size and upgrade the equipment that makes up the difference. Buying a new furnace or heat pump before fixing obvious leaks can mean paying for a larger system than you need.

1. Free changes. Review your price plan, set a modest overnight thermostat setback (roughly 2–3 °C with gas heat), fix dripping hot water taps, and wash laundry in cold water.
2. Low-cost fixes ($0–$300). Weatherstrip doors and the attic hatch, caulk obvious gaps, replace remaining incandescent bulbs with LEDs (which use roughly 75–85% less energy), and use advanced power bars where standby loads add up.
3. Get a home energy assessment. A Registered Energy Advisor measures air leakage with a blower door and ranks upgrades for your specific house. It is also a requirement for some rebate routes.
4. Air sealing and insulation. Attic, basement walls and rim joists are the usual priorities. Many older Ontario homes have R-12 to R-20 in the attic; R-50 to R-60 is a common retrofit target.
5. Heating, cooling and water heating at end of life. When a furnace, air conditioner or water heater is near the end of its life, compare high-efficiency options, including heat pumps, rather than replacing like for like in a hurry.
6. Everything else. Windows, appliances, and (where it suits your roof and budget) on-site generation such as solar.

To see where your own home stands, try the 12-question home energy checkup, which gives a rough score and a prioritized list.

Which upgrades usually pay off?

Payback depends heavily on your starting point and fuel. The table gives typical patterns, not promises.

Upgrade	Typical cost range (estimate)	Usually worth it when
Thermostat settings, price plan review	Free	Almost always
Weatherstripping and caulking	$50–$300 DIY	Drafts are noticeable
Smart thermostat	$150–$350 before rebate	Your schedule is predictable and you do not already set back
Attic insulation top-up	$2,000–$4,500	Existing level is below about R-30
Professional air sealing	$500–$1,500+	Blower door shows high leakage
Cold-climate heat pump	$12,000–$25,000 ducted	AC or furnace is near replacement, or you heat with oil, propane or electric baseboards
High-efficiency furnace	$5,000–$9,000	Existing furnace is failing and a heat pump does not suit the home

Homes heated by electric baseboards, oil or propane usually see much larger dollar savings from envelope and heating upgrades than gas-heated homes, because those fuels cost more per unit of heat.

Rebates and help with costs

The Home Renovation Savings Program, delivered jointly by Save on Energy and Enbridge Gas, has offered rebates for heat pumps, insulation, windows, smart thermostats and some appliances. Income-eligible households may qualify for free upgrades through the Energy Affordability Program or the Enbridge Home Winterproofing Program, and for bill credits through the Ontario Electricity Support Program.

Heat pump rebates generally require a participating contractor and pre-approval before work begins. Browse current options in our rebates directory, and always confirm amounts and deadlines on the official program site because they change.

Caution: Unsolicited door-to-door contracts for furnaces, air conditioners, water heaters and similar equipment are banned in Ontario. If someone at your door says they are "from the program," do not sign anything.

Frequently asked questions

What is the single biggest thing I can do to lower my energy bills?

For most homes, it is reducing heating energy: sealing air leaks, adding attic insulation where it is thin, and making sure your heating system is efficient and properly maintained. Heating is roughly 60% of household energy use.

Is it worth switching electricity price plans?

It can be. Households that shift heavy use (EV charging, laundry, dishwashers) to overnight hours often save on ULO, while households that use a lot of power in the late afternoon may do better on TOU or Tiered. Our electricity price plan calculator compares them using your own usage.

Do I need a home energy assessment before upgrading?

Not always, but it is the best way to avoid spending money in the wrong order. Some rebate routes require pre- and post-retrofit assessments, so book one before work starts if you plan to apply.

How do I know if my bills are high?

Compare your annual kWh and m³ to typical figures: roughly 7,000–9,000 kWh a year for a home without electric heat, and roughly 2,000–2,600 m³ of gas for a detached home with gas heat and water heating. Much higher numbers suggest room to improve.