CEIP Explained: A New Furnace, Heat Pump or Water Heater, Paid Through Your Property Taxes
If your furnace is close to done, the hard part usually isn't picking the equipment. It's the number at the bottom of the quote.
The Clean Energy Improvement Program — CEIP — was built to deal with that. It lets you replace your furnace, heat pump, air conditioner or water heater without paying us anything up front, and pay it back slowly through your property tax bill.
There’s one thing most homeowners don’t know: CEIP isn’t one program. Every city and county runs its own version. The interest rate is different. The bonus money is different. And some towns near Edmonton don’t offer it at all.
Here’s how it works, what it pays for, and where your municipality stands today.
How CEIP works, in plain terms
You borrow money from your municipality to pay for the upgrade. You pay it back on your property tax bill. That’s the whole idea. Three things make it different from a regular loan:
Your credit score isn't the deciding factor.
The loan is attached to your house, not to you. What matters is that you own the home and you're caught up on your property taxes.
There's no new bill to keep track of.
No separate monthly payment, no new account. One extra line shows up on the property tax bill you already get.
If you sell, you can hand it over.
The next owner takes over what's left and keeps the new equipment. Or you pay off the balance when the house sells. No penalty either way.
More than 1,000 Alberta homeowners have finished projects this way, worth over $66 million.
What CEIP pays for
Heating and cooling
- A high-efficiency furnace
- A heat pump — it has to be big enough to handle at least half your heating
- Central air conditioning
- A high-efficiency boiler
- An HRV or ERV (the fresh-air ventilator)
- A geothermal (ground-source) heat pump
Water heating
- A tankless water heater
- A heat pump water heater
- A high-efficiency tank water heater
- A drain water heat recovery unit, which pulls heat out of your shower water
Everything has to be ENERGY STAR certified, and a few items have extra efficiency requirements. The exact numbers are in a table at the bottom of this page if you want them. The short version: any equipment we’d put in an Edmonton-area home already clears the bar.
If you’ve been putting off a tankless conversion because of the price tag, this is the program that changes that math.
The rules aren’t the same everywhere. The City of Edmonton is the big exception — it runs a stricter program than the communities around it:
- A furnace on its own isn’t covered in Edmonton. It only qualifies when paired with a heat pump, at 97% AFUE or better. It is covered in Sherwood Park, St. Albert and Spruce Grove.
- Central air conditioning and tank water heaters aren’t covered in Edmonton either. Tankless and heat pump water heaters still are.
- A first-time Edmonton application needs at least three upgrades, not one.
Elsewhere, one local rule to know: in Strathcona County, ECM furnace motors aren’t covered.
If you’re in Edmonton, our Edmonton CEIP page covers all of this in detail — it’s a different enough program to be worth reading on its own.
The bonus money most people miss
This is the part that surprises homeowners. On top of the low interest rate, your municipality puts money toward the job. The simplest way to think about it: your municipality makes a payment on your loan for you.
It's not a cheque.
You never hold the money. It is applied against your loan balance, so what changes is the amount you owe rather than what lands in your account.
It arrives at the end, not the beginning.
You get it once the job is finished, your final energy evaluation is done and your paperwork is submitted. Nothing is applied at the approval stage.
You only get it if you borrow.
The bonus is worked out on the amount you finance. Pay cash for the job instead and there's nothing for it to come off, so you lose it entirely.
It can run out.
There's a limited pot, handed out first-come first-served, one per project. Your municipality is upfront that it can't promise the money will still be there when your job wraps up.
The City of Edmonton offers no CEIP bonus money, and charges a higher interest rate on top of that. That’s the single biggest reason Edmonton homeowners should compare the program against ordinary financing rather than assuming it wins.
Here's a $12,000 furnace and heat pump in Sherwood Park:
| Our quote | $12,000 |
|---|---|
| What you pay us up front | $0 |
| What your loan starts at | $12,000 |
| The municipality's 5% | – $600 |
| What you pay back | $11,400, at 2% |
Where each municipality stands right now
Every open program has a waiting list. That does not mean you cannot get in — it means the sooner you apply, the better your spot in line.
| Where you live | Interest rate | Toward your job | Most you can borrow | Term | Open today? |
|---|---|---|---|---|---|
| St. Albert | 1.62%never past 3% | $1,400 | 100% of the job | 20 years | Waiting list |
| Sherwood Park | 2% | 5% of the job | Capped at your yearly property tax | 20 years | Closed — waiting list |
| Sturgeon County | 3% | 5% of the job | $50,000 | 20 years | At capacity — waiting list |
| Spruce Grove | 3.5% | 7.5% of the job | $50,000 | 25 years | Full — waiting list |
| Edmonton | 6%fixed | None | $50,000 | 20 years | Nearing capacity — waiting list |
| Leduc | Was about 1.35% blended | Was $1,350 | — | — | Closed to new applications |
| Stony Plain | — | None | — | — | No program |
Figures current as of July 2026. Rates and waiting lists change — confirm with your municipality before planning around a date.
What you actually have to do
Apply to your municipality.
You need to own the home and be caught up on your property taxes. Your credit score is not part of the decision.
Get an energy evaluation.
A certified Energy Advisor assesses your home before any work happens. This is the step that catches most people off guard.
Get quotes.
Your quote has to come from a contractor the program has approved. A quote from anyone else won't be accepted, however good the price.
Get approved.
Your municipality confirms how much you can borrow and over how long, based on the equipment you have quoted.
We install.
Sized for your home and to program specification, by an approved contractor. This is the only stage of the process we control.
Get a second energy evaluation.
After the work is done. Skip this one and you lose both your financing and your bonus money, so it is not optional.
Send in your paperwork.
Your municipality confirms the work is complete and applies your bonus money against the loan balance.
Payments start.
The first instalment appears on your next property tax bill, as one extra line rather than a separate account.
About those energy evaluations
Both evaluations are required. Your contractor can’t do them — it has to be a certified Energy Advisor.
You pay for the first one yourself, before any work starts. The good news: you can ask to have both evaluations added to your financing and get that money back once the job is done. So it’s money out of pocket for a while, not money gone.
Book it early. Waiting on an Energy Advisor is the most common reason these projects get delayed.
Is CEIP right for you?
It's probably a good fit if:
- Your furnace is old and you're planning ahead, not reacting to a breakdown
- You can wait several weeks — possibly a few months — before work starts
- You'd rather hang onto your cash and pay slowly
- You plan to stay in the house a while, or you don't mind passing the balance to a buyer
It's probably not the right fit if:
- You have no heat right now
- You need the work done in the next week or two
- You want the equipment paid off outright with nothing attached to your title
- You're selling soon and don't want to explain the arrangement to a buyer
If you’re in that second list, you still have options. We finance through FinanceIt, which moves quickly and doesn’t involve your municipality at all.
Does CEIP cover the whole cost of a furnace or water heater?
It can cover the full cost of eligible work. Anything in the job that isn't covered by the program, you pay for directly. Each municipality also sets its own limit — Spruce Grove caps financing at $50,000 per property, and in Strathcona County your yearly payment can't be more than your yearly municipal and education property tax.
Do I have to pay anything up front for a CEIP project?
You don't pay your contractor a deposit. The program advances a deposit of up to 30% of the financed costs directly to the qualified contractor, so nothing is owed to them at the start. You do pay for the first EnerGuide energy evaluation yourself before work begins — a few hundred dollars — though you can add both evaluations to your financing and be reimbursed after the job is complete. You also pay directly for any part of the job the program doesn't cover, or any amount above what you were approved for.
Do I need good credit to qualify for CEIP?
No. The loan is secured by your home, not your credit score. You need to own the property in a participating municipality and be caught up on your property taxes and any debt secured against the property.
What happens to CEIP financing if I sell my house?
The balance stays with the house, not with you. The next owner takes it over along with the new equipment, or you pay it off when the house sells with no penalty. You do have to tell the buyer about the arrangement.
Can I pay it off early?
Yes, with no penalty.
Is a tankless water heater covered by CEIP?
Yes, as long as it's ENERGY STAR certified. You'd pay it back over up to 13 years. Heat pump water heaters (up to 15 years), high-efficiency tank water heaters (up to 15 years) and drain water heat recovery units (up to 20 years) are covered too, with a few local exceptions.
Can I use any contractor for a CEIP job?
No. The program requires a contractor it has approved, and that includes any trades brought in to help. You'll need a written quote from an approved contractor to move your application forward.
Which municipalities near Edmonton offer CEIP?
Near Edmonton, the City of Edmonton, Strathcona County (Sherwood Park), St. Albert, Spruce Grove, Sturgeon County, Devon and Beaumont all take part. Leduc has closed to new applications. The Town of Stony Plain and Parkland County do not take part. Each municipality decides on its own whether to join, so this can change.
What interest rate does CEIP charge?
Each municipality sets its own. As of July 2026, St. Albert charges 1.62% (it can rise but never past 3%), Strathcona County charges 2%, Sturgeon County charges 3%, Spruce Grove charges 3.5%, and the City of Edmonton charges 6% fixed. Edmonton also offers no municipal incentive, unlike the surrounding communities. Check with your municipality for current rates.
Do I really need an energy audit for CEIP?
Yes — one before the work and one after, both done by a certified Energy Advisor. Your contractor can't do them. You pay for the first one yourself before any work starts, but you can ask to have both added to your financing and get that money back once the job is done. Skipping the second one costs you your financing and your bonus money.
How do I actually get the municipal bonus money?
You don't receive it. It comes off your loan balance after the job is done, your final energy evaluation is complete and your paperwork is in. Think of it as your municipality making a payment on your loan for you. It's first-come first-served, one per job, and your municipality can't promise it will still be available when you finish.
Can I get the bonus money if I pay cash instead of financing?
No. It's worked out on the amount you borrow, so you have to finance through CEIP. Paying cash means there's nothing for it to come off.
Can CEIP be combined with other rebates?
Yes. Alberta Municipalities encourages people to use every rebate they qualify for, as long as you meet the rules for both. Municipal bonus money, manufacturer rebates and CEIP financing can normally be used together on the same job.
Why is CEIP different in the City of Edmonton?
Edmonton runs a stricter program aimed at heat pumps and deeper retrofits. A high-efficiency gas furnace only qualifies when paired with a heat pump, at 97% AFUE or better. Central air conditioning and high-efficiency storage tank water heaters are not covered at all. A first-time application requires at least three separate upgrades. Edmonton also charges 6% fixed interest with no municipal incentive, plus an administration fee, so it is worth comparing against ordinary equipment financing.
| Equipment | What it has to meet | How long you can finance it |
|---|---|---|
| Gas furnace | ENERGY STAR certified. In Edmonton, only when paired with a heat pump, at 97% AFUE or better | Up to 16 years |
| Air-source heat pump | ENERGY STAR; must cover at least 50% of your design heating load | Up to 16 years |
| Central air conditioner | SEER ≥15 (or SEER2 ≥14.3), EER ≥12 (or EER2 ≥11.5), ENERGY STAR v5.0. Not covered in Edmonton | Up to 18 years |
| Gas boiler | AFUE ≥95% with outdoor reset control | Up to 25 years |
| HRV / ERV | ENERGY STAR and HVI certified | Up to 18 years |
| Ground-source heat pump | ENERGY STAR, CSA C448, installed by an IGSHPA-certified installer | Up to 16 years |
| Tankless gas water heater | ENERGY STAR certified. In Edmonton and Leduc, EF ≥0.9 or UEF ≥0.72 | Up to 13 years |
| Heat pump water heater | ENERGY STAR certified | Up to 15 years |
| Tank water heater | ENERGY STAR v4.0. Not covered in Edmonton. In Leduc, EF ≥0.8 or UEF ≥0.64 | Up to 15 years |
| Drain water heat recovery | — | Up to 20 years |
What you do pay for yourself
We’d rather say this plainly than let “nothing down” do more work than it should.
You pay us nothing up front. The program advances our deposit straight to us, so we don’t ask you for one. That part really is zero.
Two costs can still come out of your pocket:
The first energy evaluation.
You pay the Energy Advisor yourself before work starts, usually a few hundred dollars. You can add both evaluations to your financing and get that money back after the job, so it comes back to you. But it leaves your account first.
Anything the program won't cover.
If part of the job isn't eligible, or the total runs past your approved amount, you pay us for that portion directly. Work around the equipment, such as venting, electrical or duct changes, is where this usually shows up.
What we provide
Three things, specifically.
A quote your application will accept.
The program only takes estimates from an approved contractor, and the quote has to be detailed enough for the municipality to work from. You get a properly sized system, a written number, and any part of the job the program won't cover marked clearly.
Guidance at every step.
CEIP has more moving parts than most homeowners expect: the application, two energy evaluations, the completion form, the deadlines. We walk you through the order things happen in and point you toward a certified Energy Advisor for your evaluations.
The install, done properly.
Sized for your home, installed to program specification, and documented so your final evaluation passes cleanly. By a company that will still be here in ten years if a warranty question ever comes up.
We’ve been family-owned in the Edmonton area since 1976, we’re rated 4.8 stars across more than 400 Google reviews, and we’re an approved CEIP contractor — which the program requires, and so is any trade we bring with us.
And if CEIP isn’t the right fit — or your town doesn’t offer it — we’ll tell you and walk you through what else is available. Programs come and go. A properly sized, properly installed system doesn’t.
One thing worth saying plainly: the bonus money doesn’t come out of our quote. If we quote $12,000, that’s what you finance, and your municipality’s $600 comes off your loan on top of it. Our price is the same either way.
What we don’t do: run the program, approve applications, or decide who gets funded. That’s the municipality and Alberta Municipalities. Anyone who tells you they can get your application approved is overselling.
Book a free estimate
The first step is finding out what your home needs and what it costs. That visit is free, takes about an hour, and the written quote is the document your CEIP application is built on.
Modern Air & Water is not affiliated with the Clean Energy Improvement Program, Alberta Municipalities, or any municipal government, and we don’t administer or approve applications. Interest rates, bonus amounts, limits and availability are set by each municipality and change over time. Check with your municipality or at ceip.abmunis.ca before you make a decision. Figures on this page were current as of July 2026.