Heat Pumps are Lowest-Cost Option for Heating and Cooling Most Households, New Research Finds

September 28, 2023

New research by the Canadian Climate Institute finds that heat pumps are already the lowest-cost way for most households across Canada to heat and cool their homes. 

The new report, Heat pumps pay off: Unlocking lower cost heating and cooling in Canada, examines the cost of heating and cooling options across building types in Vancouver, Edmonton, Toronto, Montréal, and Halifax. It compares the costs of different heat pump configurations against gas furnaces and air conditioning.

The research finds that heat pumps beat gas furnaces and air conditioners on cost in most cases. On average, the lifetime cost of a standard heat pump with electric backup is 13 per cent less than a gas furnace with air conditioning. This is in part driven by the high energy-efficiency of heat pumps, which are up to five times as efficient as gas furnaces, providing significant savings on energy bills.

In addition, those in the market for new heating or cooling appliances can use a new online calculator developed by the Institute (www.heatpumpcalculator.ca) to find out the lowest-cost option for their situation. The calculator provides detailed information that shows how heat pumps stack up against alternatives in each of the five cities modelled—both in terms of costs and emissions impact. 

Heat pumps are a vital technology for reducing climate pollution in Canada’s buildings and protecting people from extreme heat. They are highly energy efficient, run without burning fossil fuels, and double as a cooling technology, which will become increasingly important as extreme summer heat becomes more frequent.

The new report includes policy recommendations targeting barriers that are holding households back from installing a heat pump. These recommendations include maintaining existing government policies and rebates, streamlining supports for consumers, establishing maximum indoor temperature limits and cooling requirements, and requiring non-polluting, high-efficiency heating and cooling technologies in new buildings in regions where they are already cost-competitive. 

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