If your furnace or central AC needs replacing, consider installing a heat pump. Here’s how to choose your system and find heat pump rebates in Canada.
Should your next furnace be a heat pump? Or, more precisely, should your next furnace and air conditioning unit be a heat pump? FYI, it can warm and cool your home, making it usable all year long. If you’ve never heard of this option, you’re not alone—heat pump awareness and usage are pretty low. These devices are a best-kept secret, considering the technology has been around since 1856.
With all the buzz around ChatGPT right now, I decided to ask it to explain what a heat pump is, and it came back with “a heat pump is a device that acts like a magic box, moving warm or cool air to make your home comfortable, like a heater in the winter and an air conditioner in summer.”
Beyond the simple AI info, here are some compelling facts for using a heat pump. The “magic” lies in the fact that heat pumps are 300% more efficient than baseboard heaters and furnaces, and 50% more efficient than AC units. And, unlike most furnaces, they run on electricity, not gas (unless it’s a hybrid heat pump). Speaking of gas, a recent study found that heat pumps are more efficient than gas heating, even in cold weather. And here’s another consideration that could convince you to transition to a heat pump sooner than later: some parts of Canada have banned fossil-fuel heating systems in new homes.
That said, despite their superior efficiency, heat pumps haven’t been adopted in Canada as readily as in other parts of the world. As of 2021, heat pumps were the primary source of space heating in only 6% of Canadian homes. That’s far lower than in Europe, where an estimated 16% of residential and commercial buildings used them as of 2022, says Natural Resources Canada (NRCan). And that gap could widen further with year-over-year heat pump sales growing by nearly 40% in Europe last year (including both air-heating and water-heating heat pumps), compared to 11% for the rest of the world, according to the International Energy Agency.
So, why aren’t Canadians jumping on board, recognizing the potential energy savings of heat pump solutions? “When discussing the differences between Canada and Europe, one of the main drivers that impacts the uptake of home heating electrification is energy prices,” says Robin Librach, the communications officer for NRCan. The cost of gas, electricity and natural gas have skyrocketed in many parts of Europe since Russia invaded Ukraine, so European consumers are understandably searching for more cost-efficient ways to heat and cool their homes.
Few Canadian households have a heat pump, but NRCan numbers suggest that the tide may finally be turning. Since the Canada Greener Homes initiative was launched in May 2021, more than 47,000 Canadian home owners have received grants for heat pumps. And heat pumps are the most frequent retrofit undertaken by those participating in the program, followed by windows and doors, home insulation, air sealing and solar panels.
Currently, the Canada Greener Homes Grant provides three levels of heat pump rebates, ranging from $2,500 to $5,000 depending on the type of heat pump as well as performance specifications. In Ontario, where the Canada Greener Homes Grant has been replaced by what’s known as the Home Efficiency Rebate Plus program, heat pump grants go up to $7,800.
FurnacePrices.ca cites quite a broad range of heat pump prices in Canada, from $3,500 to $15,000, “with a simple ductless mini-split air conditioner system sitting at the lower end of the price range while a geothermal or ground-source heat pump comes with a remarkably higher price.” (See below for more on different heat pumps.) Factors such as the size/type of home, type of system, local installation charges and the brand of product all factor into the final heat pump cost.
NRCan’s website provides a comprehensive overview of heat pumps and explains the two main types of residential heat pumps: air source and ground source. Air-source heat pumps pull heat from the outside air during colder months and do the reverse, removing warm air from inside the house, during the hotter months. The main difference with ground-source heat pumps is the actual source. The earth, ground water or both heat your home in the winter and cool it in the summer.
Another key differentiator: how the air is exchanged. A central ducted heat pump solution works in tandem with the existing ductwork of your home. For homes without ductwork, owners can opt for mini split-system heat pumps, which consist of an outdoor compressor/condenser and one or more indoor handling units that are mounted on the wall—much like a room air conditioning unit.
Heat pumps can also work in condos or apartments, provided you have a standalone HVAC system. But if you’re part of a whole-building system, then the decision to adopt this technology will come down to what your condo corporation or building manager decides to do. But it’s certainly possible to install a heat pump in a larger building.
Reflecting Canada’s cooler climate for much of the year, the vast majority of heat pumps (about 75%) purchased to date through the Canada Greener Homes Grant have been cold-climate air-source heat pumps (ccASHPs). These units operate well below freezing, with current models producing heat from air as cold as -25°C.
Which brings us back to the grants available. Both Canada Greener Homes and Home Efficiency Rebate Plus specify that you first need to get an Energuide home energy efficiency evaluation by an energy advisor who is registered with NRCan. And when that evaluation comes back and says your home qualifies for a heat pump retrofit, your system must be installed by a licensed and trained professional. So, no home handyman installs—no matter how handy you happen to be.
Your installation company will work with you to identify what type of system makes the most sense, whether ground or air source, ducted or ductless. And ultimately, the dollar value of the heat pump rebate will depend on what type of system you have installed, which must also meet proscribed performance criteria.
For your heat pump to qualify for the Canada Greener Homes grant of $2,500, it must be an Energy Star–certified air-source heat pump (so not considered “cold air”) capable of producing 12,000 BTUs per hour when outside temperatures are as low as 8.3°C. And from a cooling standpoint, the unit must meet a Seasonal Energy Efficiency Rating (SEER) equal to or greater than 15.2. (SEER ratings range from 13 to 30.)
To help you grasp what SEER means, here’s how the Mitsubishi Electric site describes it: “SEER is the miles per gallon of HVAC and represents how much electricity is required to run a unit at full capacity during a given period of time.” (Instead of miles per gallon, think kilometres per litre, here in Canada.) So, the higher the SEER, the less electricity required to run the unit. And typically, the higher the SEER, the more expensive the heat pump.
Mini or multi-split cold-climate air-source heat pumps also qualify for a $2,500 grant. Energy Star air-source heat pumps for centrally ducted systems or split systems with three or more air supply outlets are eligible for a $4,000 rebate. And cold-climate air-sourceheat pumps for central or ductless with three or more outlets will get you $5,000.
All of these systems must also comply with the minimum heating and cooling performance numbers mentioned above. All products and equipment must be purchased in Canada.
Note that some of these grants are not available for residents of Nova Scotia or Quebec, so it’s best to consult with your local heat pump installer to learn about your options. Or if you want to do some initial research, NRCan itemizes the various heat pump grants described above (including exclusions). If you live in Ontario, check out the Enbridge Gas webpage dedicated to the Home Efficiency Rebate Plus program (a partnership between NRCan and Enbridge). In Nova Scotia, go to Efficiency Nova Scotia, and in Quebec, the Rénoclimat program.
Whether or not you should install a heat pump depend on a lot of variables, including how big your energy bills are, the size and energy efficiency of your home and, at least for some, whether or not you want to lower your personal carbon footprint.
Canadians also need to overcome the notion that heat pumps won’t work during winter months. As observed by NRCan’s Librach, “Contrary to common misconceptions, electric heat pumps are a proven technology in cold climates,” and the newest prototypes are capable of producing heat from air as cold as -31°C.
Yet another perceived barrier is cost. But Librach helps to put this into perspective: “Heat pumps can cost more up front than conventional heating systems, but their higher efficiency can pay off in the long run, especially when considering available incentives.” For many home owners, Librach adds, the value of the grant they receive could represent 15% to 25% of their installed costs.
Then again, the overall efficiency of a heat pump—or any heating or cooling system—also depends on how well insulated and sealed the home is. An Energuide audit will both itemize and prioritize the energy upgrades you should consider getting done. Librach recommends that home owners take an “envelope-first approach” that helps to minimize heat (and cooling) loss and lowers the heat (and cooling) load of a home.
If your home is already well insulated and you need to replace your existing furnace or AC unit, installing a heat pump could prove to be your best option. Consider getting one—heat pumps are here to stay, and you’ll enjoy having a cleaner, more energy-efficient way to heat and cool your home.
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Having recently installed a heat pump myself, I wanted to add a couple of cautionary comments to this great article. First, a GoC study on heat pump economics involving a variety of households in major cities across the country warns that although heat pumps are a viable option here, you may find that if you choose to keep fossil gas as a backup during vey cold periods, your total utility bill may be higher because of the persistent fixed charges from both electricity and gas accounts. Second, to delete fossil gas and go fully electric requires the house to have at least a 200 amp service. This upgrade will cost anywhere from $5000 (overhead lines) to over $20,000 (buried lines). This last cost is a major drawback for heat pump adaptation in Canada, and is not covered under the Greener Homes program.
One problem rarely discussed in articles about heat pumps is the noise. In a large city where there is little separation between houses/yards, the noise impact to your neighbour can be significant with the pump/fan unit now outside the home. People usually discover this after it’s too late, not a great option for that reason in my opinion.
Heat pump efficiency is decreasing with ambient temperature going down. It requires supplemental heating when it is -15C and below outside. This is the main problem for using heat pumps in Canada.
Comparing operating efficiencies of HP vs natural gas furnace is misleading. The operating efficiency of a natural gas furnace does not change as outdoor temperature drops! Heat output is constant.
An air source HP efficiency decreases as outdoor temperature drops, as does its ability to provide heating.
Subsequently, what you can claim is HP’s are more efficient than natural gas furnaces. However, HP’s may not deliver more heat than a natural gas fired furnace at low outdoor temperatures!
Personally, I’ll take heating capability over efficiency anyway. Natural gas also cost about a 1/3 less than electric!
The best of both worlds is a HP and natural gas fired furnace, each of which operate as a function of a fossil fuel switch which determines which appliance provides heating service as a function of outdoor temperature.
Doesn’t have to be confusing!
This is a good introduction. Just one comment. In AC mode heat pumps are basically identical to standard AC units in efficiency so I don’t know where the comment on AC efficiency comes from. If you compare older window AC units to an inverter minisplit I could maybe justify this number.
Also, many multifamily buildings (condos and rentals) don’t allow window AC units but some floor mounted units have a heating mode. Might be noisy but it works. New design window heat pump units are coming on the market to provide summer AC and winter savings.
I’ve had 10 ducted and ductless systems installed in our own houses and in rental properties as well as s geoexchange system and they work well if you put in a quality brand with a good installer.
Just one glitch with our heat pump. It works as promised right down to -20C but one day it showed an error code and it was shut down. It restarted after disconnecting it using the breaker. Not a good prospect when away for an extended period of time during cold weather with no automatic backup e.g. pre-existing baseboard heaters (or alarm).
Heat pumps don’t work when it’s below minus 30. In Western Canada and the north, heat pumps are not feasible for the cold days and you still need gas. They only work in moderatly cold climates warmer than minus 39. Sadly, most articles about heat pumps leave off this detail. Heat pumps are NOT A SOLUTION for many parts of Canada.
Heat pumps only work in climates warmer than minus 30 (revision to my comment below)
Glad you explained seer. Now tell the other side of story that you still have to have a backup source to heat pump. As per building code.and insurance. So still need your heating system
So how exactly is a heat pump better at warming up air that is already minus 20° c or even minus 10 degrees Celsius compared to a furnace when it’s heating air at 15 to 22 degrees Celsius in the winter?
Had a heat pump on Vancouver Island good in summer, however at -10C the heating element came on. If you’re living in a cold climate (most of Canada) better do your homework. Been 20 years or so since I was out there, maybe they have improved. I think gas is a safer bet.
The upshot is that this technology requires subsidies in order to be adopted on a large scale. I’ll stick with my natural gas, thank you.
When you talk gas, are you talking propane gas or natural gas? If your talking natural gas, no way heat pumps are cheaper to run. Ground source heat pumps are close to high efficiency furnaces, but you have to be rich to have one. Besides, pay back time is approximately 15 years.
We have a oil fired hot water boiler system. No duct work just hot water rads that resemble electric baseboards. Is there a way of introducing a heat pump system into the equation ?
Liberal propaganda
How do you heat your home once the temp drops below -25C for half of December, January, February and half of March?
Northern part of Canada easyly over -31c. How to provide hot air? So you can not disable furnace. Use it for three seasons.
Mine right from the get go never properly worked. is always broken (maytag) cools well, but always ices up once below zero, not a shoftage if freon. Stupid installers could never figure it out. Money for nothing. But at least cools well in summer. Use the electric furnace in winter spent anothe 500 dollars for still not finding the problem. Why spend more to fix something that never works. Old York was a tank, get on going over 20 years
Electric baseboard heating is the Best!
Thermostat in each room and quiet operation that’s full control.
Heat pumps, bulky furnaces, noisy machines, don’t go for that heat pump scam, be smarter than your smart thermostat.
Sounds interesting. My question would be regarding areas which frequently lose their power during winter storms and a comparison complete with wood furnaces, which of course are using fossil fuels, but keep your house warm if your power is out for days.(maritimes) Although I have been considering a ducted heat pump, I have heard many complain that installers will not service and clean them and finding someone to clean them has not been successful. Could you please speak to those concerns?
I read your article with interest. This is not an argument against heat pumps for residential heating and cooling, I have two. However it should be noted that some insurance providers do not recognize these as a primary source due to loss of efficiency in extreme cold weather. Improvements have been made in this category. Also, it is difficult to understand the efficiency of heat pumps compared with fuel fired sources. They do not generate heat as fuel fired sources do but move heat from one area to the other so the only cost, not including installation and maintenance, is the cost of operating the equipment. With fuel fired sources, the costs include the costs of operating the equipment and the cost of the fuel. The only comparable parameter would be the cost per heat unit (BTU) of each unit.
-31c isn’t low enough
We see temperatures below -40 not including wind chill in north central saskatchewan.
Farther north experience these temperatures for far longer during the winter months.
The minimum operating capacity for heat pumps has to be around -60 to ensure that it would be able to completely replace existing heating options without needing some form of backup.
So sure these units would be great for Vancouver but they are not a viable option yet in a vast majority of the country
Our heat pump costs us $600/MONTH to run in our Saskatchewan winter. The amount of electricity – because SK doesn’t use clean energy – means our carbon footprint is twice as high as if we used propane. There are no incentives to KEEP this system, and if costs get much higher, we will have to switch to wood heat or something else.
Heat pumps are useless in canadian winters. Any thing below -15 and you have no heat. Did not see that in your article.
Heat pumps can produce heat at minus 31 is useless information. What is needed is how much electricity is consumed to raise a home approx 1500 square feet x 8 feet high, 12,000 cubic feet, inside temperature to approx 22c or 72 F when heat loss of building is average and ambient temp under 8c. Whatever your structure is the efficiency of a heat pump starts rapidly dropping off at 12c and eventually runs all day long and never get your house to your magic comfort number. It might keep it above freezing. Thats not good enough. You need dual fuel heat pump gas furnace combination which needs to be programable to 1/switch to gas when outside temp drops below a set point and 2 if really smart runs heat pump when electric rates are low and ambient temp is warm enough. Its really hard to get data that shows efficincy drop off in ambient from 20c to minus 20c and what the max temp of output at those degrees is, with lots or reasonable distribution flow in a structure
I m a homeowner and Daikin does quite well for us. Comprehensive Canadian data was basically non existrnt for us 5 years ago and it takes s lot of digging to get to the facts. Some miniscule amount of heat at -20 and runs 24/7 is not user friendly.
If installing a heat pump , you better have a warm sweater to go with it. You will need it !!
I am not impressed with the system I bought ten yrs ago 18,000 dollars was in my home 10yrs had a propane back up furnace and heat pump, air conditioning system. York. In the 10 yrs nothing but a lemon, came so many times to fix it, I can’t count. A nightmare actually 10yrs warranty, what a joke, we asked for a new one but no one ever replaced it. Came every year inspection, turn it on when getting cold alway problems. Last straw with the system was 3 times one day to come and fix it, finally got it torn out of here and another 18,000.00 spent, Rheem this time, its been a year now so far so good but only good up to – 13 or so. Remember this. Installed a little over a year ago.
Regarding the Greener Homes Grant – in order to qualify for the full grant for the heat pump, in Alberta at least, you have to not only order a heat pump, but also a brand new furnace, even though the new furnace is not in anyway better than the current furnace I have. I understand that I will need a gas furnace as a backup, but making me buy a new furnace for no reason whatsoever is stupid. I understand matching heat pump and furnace but this is just dumb. The GHG program is a waste of money.
Hi,in N.S.( Cape Breton ) Our Power Rates & Proper Maintenance,of Our Are Unstable, Nova Scotia Power Is Privately OWNED ( which the PC. Party Sold ) ! They Have A Monopoly Which I Think Was Illegal & Shouldn’t Have Taken Place ! This Was Shown In Few Issues Fiona ( Power Lost For Almost a Month in some Places ) Broken Rotten Power Poles ) & CEO Was Paid Hundreds of Thousands Dollar For Making N.S.P. Share Holder Huge Profits !!! How Can We Change Over To Greener Electric HEAT SOURCE !! TY. Eric Funari.
Let me tell u guys heat pump is absolute scam it doesn’t even heat ur home it just keep it a little warm absolute useless in cold place like Canada I can see it useful for Texas or something but canada is way to cold u need to keep ur furnace and bring gas period heat pump is a gimmick scam DO NOT INSTALL it I wish I can change back to my old furnace I’m getting my asss freeze up this January for sure smhh
To improve this article, you might want to add that when considering a heat pump the price of electricity relative to the price of natural gas in your province (or heating oil in maritimes) is very important. If a heat pump is 300% more efficient, but the electricity price is often 10 times greater than natural gas in the prairie provinces then your operating costs are not going to be cheaper. Also, in many provinces the only savings (according to NRCan own studies) you really get with a heat pump is when you cut off your natural gas line, but NRCan also recommends having a ng furnace as backup, so again no savings.
I like heat pumps, the technology has improved greatly, but right now even with a federal grant there is no financial benefit for those in provinces with cheap natural gas.
Not only do heat pumps not make sense for Canadian winters, they don’t make sense economically. Retro-fitting a heat pump (upping your electrical amperage, making your house air-tight) will set you back several thousand dollars on top of the cost of the heat pump itself. Also, if you think electricity won’t go up in price once more people have electric heat pumps and electric pumps, you’re in for a shocking surprise.
People with heat pumps are never going to break even on the costs.
Heat pumps are sold by presenting pages of meaningless facts. No distortion, no misrepresentation, just no information which is relevant to making an informed decision. ONE simple graph of energy cost vs temperature, of gas and electricity is all that is needed. This is purposely NEVER given. Once you have this information, you can factor in the cost of a heat pump and amortize it over your projected life expectancy? If you have a gas water heater you have the fixed cost of a gas account, or the cost of changing the water heater? A heat pump will never win this comparison. This article is written by a fellow who has no ability to understand anything. He is just a parrot, presenting the pages from the heat pump industry.
All the hype about efficiencies and rebates has no doubt generated a lot of consumer interest. But I suspect that most consumers don’t realize that these enticements don’t necessarily translate into monetary savings, despite many HVAC companies being all too willing to include a “savings” claim with their advertising and sales pitches.
When competing with natural gas, it all comes down to the relative $/MM BTU’s (or giga joules) costs of electricity vs gas (efficiency of the gas furnace factored in) and the COP efficiency of the heat pump being considered. The COP’s of even cold climate heat pumps drop sharply with temperature. Even if still 200% efficient at a very cold temperature, if the energy cost of electricity is more than twice that of gas, it will be less expensive to heat with gas rather than a heat pump.
So in this context there are really two types of efficiencies to consider … energy efficiency and cost efficiency. And unless reducing carbon output is your main driver, it’s the latter that will be important to consumers.
In my case, for example, for one high end cold climate heat pump the COP drops to 2.09 at -8 C. But based on my current energy costs, the COP needs to be at least 2.34 before I will save money using this heat pump. And besides that, a cold climate heat pump will likely have an up front cost of at least 3x that of a high efficiency gas furnace, assuming I would need a new one to begin with.
Nobody talks about the noise this system produces. Sleepless nights after we moved from a home with propane heat to a newly built house with an electric/propane heat combination. At this point I don’t care about savings! Ready to throw out that system (and money) and go back to propane heating!