Nunavut's Qulliq Energy Corporation is undertaking this project on buildings in Rankin Inlet and Iqaluit.
Indian and Northern Affairs is the major supporter.
In Rankin Inlet the new health centre, high school and water treatment plant are being looked at as possible places where this technology will have an impact.
According to the Government of Nunavut, 10 per cent of total electrical energy demand in Nunavut is consumed in Rankin Inlet.
"I'm really pleased with the project," Ed Picco, minister responsible for the power corporation said recently.
"It's going to save us a lot of money over a five-year period."
Using Iqaluit as an example, Picco said three million litres of fuel are burned each year at the Iqaluit power plant.
"If we could save 100,000 litres a year over five years -- 500,000 litres multiplied by 70 cents a litre, we'll have the whole cost of the project paid for," Picco said.
Without the new power system, diesel generators only convert about one-third of fuel energy into electricity.
The new waste heat recovery project promises not just to save communities money, but to reduce greenhouse gas emissions by 2,000 tonnes a year.
If the final engineering report is approved by the Qulliq Corporation, the cost of installing the heat recovery system in Rankin Inlet is estimated at $3.2 million.
Shakir Alyward, CEO of Qulliq Corp., was travelling and unavailable for comment.