Heat pump sales are skyrocketing in Newfoundland and Labrador as residents prepare to pay for expected rate increases due to the Muskrat Falls hydroelectric project.

"After the announcement in 2017 that electricity rates might double … within a year or so we saw a 57 per cent increase in the number of heat pump installations in this province," Newfoundland Power CEO and president Peter Alteen told CBC News.

"That's a pretty remarkable uptake for a single year.… So our customers were clearly reacting, in our view, to the Muskrat Falls announcement that their rates would double. and their reaction was, 'We're going to use less.'"

The Nalcor Energy photo of the Muskrat Falls power generating project was taken in May. As of April, the entire Lower Churchill Project was 98 per cent complete. (Nalcor)

The company released statistics at a Public Utilities Board hearing that show there were 10,312 heat pumps in the province in 2014 and 37,327 in 2018.

Depending on your age group a heat pump may not be for you. - Dennis Browne

Alteen said the the figures include both centralized, home-heating systems that use a heat pump and mini-split units that heat a portion of a home but he says the increase is predominantly residents buying smaller, mini-split units.

Alteen says the vast majority of people buying heat pumps are ratepayers already using electric heat but adding a heat pump to reduce their electricity consumption, not people switching from heating with oil to heating with electricity.

Newfoundland Power said about 400 customers are taking advantage of a program that helps residents finance the purchase of a heat pump.

Newfoundland Power included this graphic in its presentation to the Newfoundland and Labrador Public Utilities Board hearings on rate mitigation on Tuesday. (Newfoundland Power)

Alteen said the cost of electricity won't necessarily increase if more people use less of it to heat their homes.

"Over the long term we're also looking at what we can do to increase customer usage along other lines, like electric vehicles," he said.

Heat pumps not for everyone

But the province's consumer advocate is pouring some cold water on the smoking-hot interest in heat pumps.

"Heat pumps seem to be in vogue and they are working for some people but not everyone can afford a heat pump," said Dennis Browne.

"The government program that gives a thousand dollars to a thousand people to assist them in the purchase of heat pumps will assist some people but not all."

Browne says heat pumps are a good idea for many people — but not everyone. (Mark Quinn/CBC)

Browne also says mini-split heat pumps may not be a good idea for older residents.

"Depending on your age group a heat pump may not be for you,' he said.

"If you are retired it may take 10 years to pay off a heat pump. If you are in the 30-to-35 age group and you are building a house or just moved into one it's the perfect answer. So I would recommend a heat pump to that particular demographic."

Mitchell Stead, owner of Heat Pump Solutions, told CBC News that mini-split units that heat part of a home cost between $3,500 and $5,000, whole a centralized, large pump that heats a whole home with ducts costs between $16,000 and $25,000.

Browne agreed with Alteen that if consumer conservation drives down the demand for electricity, the price of it doesn't necessarily have to increase.

"The Synapse Energy report advises people to conserve energy every way possible and then sell energy to the market to make it up at that end," he said.

He says that may be a challenge because the market for energy is currently flat.

If the province is selling electricity for just three cents a kilowatt-hour, it might be wise to try to increase domestic electricity use, such as through electric vehicles.

"The province may be best served by using that particular option — more electrification here. We can't just give it away."

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