In rural communities, heat pumps will become more common as well as high-efficiency biomass heating, including advanced wood stoves and wood pellets. In order to make wood pellets, low grade logs, wood chips and sawdust are collected from sawmills and logging operations and compressed into pellets. These pellets can then be used in stoves and boilers to efficiently heat homes and are a greener option relative to diesel.

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Other heating and cooling options that will become increasingly common in rural communities are air-source and ground-source heat pumps. Air-source heat pumps can be attached to the sides of houses or buildings and work by transferring heat from outside to inside, or vice versa depending on whether heating or cooling is required. These systems can either run on a single type of energy (i.e. electricity) or multiple, if it is a hybrid pump (i.e. electricity and natural gas or a renewable alternative). Hybrid pumps can help customers save money by running on electricity when prices are low and switching to high-efficiency natural gas when electricity prices are high. In comparison, ground-source heat pumps transfer heat to and from the Earth to heat and cool buildings and houses. In general, these systems are more expensive because they require piping to be buried underground but they are extremely efficient since underground temperatures are much more stable than air temperatures throughout the year.

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Across Canada, the adoption of heat pumps is expected to increase from 10-20% of new and replacement systems by 2030 and then increase from 40-70% by 2040. In addition to being more efficient than traditional heating systems, heating pumps will become more affordable as prices are expected to fall by 10-20% by 2025-2030, and 20-30% by 2040. As heat pumps become more common, as well as electric water heaters, baseboard heaters and electric boilers, electricity use in Canada is expected to increase from 38% in 2011 to 57% in 2030. With an increased dependency on electricity and more efficient heating and cooling systems, residential energy demands are expected to decrease by 15% by 2040 relative to 2017 levels. Rooftop solar panels are also expected to become more common helping to provide clean electricity to power heating and cooling systems.