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Canadian Climate Institute Heat Pumps Pay Off Report

Heat Pumps Pay Off: New Research Confirms Heat Pumps Less Costly Than Gas & Air Conditioning

Heat pumps are the lowest-cost option for heating and cooling in most homes in Canada. That’s the headline from the Canadian Climate Institute’s latest research on heating and cooling costs.

The report – Heat Pumps Pay Off: Unlocking Lower Cost Heating and Cooling in Canada – underscores that these devices are pivotal in shifting from fossil fuels to clean electricity and are more affordable than traditional gas and air conditioning systems in most scenarios.


Efficiency is a hallmark of heat pumps. On average, a standard heat pump with electric backup is 13% less expensive than a gas furnace combined with air conditioning. This cost benefit is primarily due to heat pumps being two to five times more efficient than gas furnaces, translating to substantial savings on energy bills.


The research undertook an extensive regional analysis, assessing heating and cooling costs across cities such as Vancouver, Edmonton, Toronto, Montréal, and Halifax. It revealed that heat pumps are especially cost-effective for single-family homes and townhouses. However, costs can vary based on local gas and electricity prices. For instance, regions like Montréal, Halifax, and Vancouver lean towards heat pumps despite challenging scenarios with high electricity costs. On the other hand, Edmonton currently prefers gas, influenced by its distinct climate and energy pricing, although this could shift as heat pump technology advances and policies change.


The Canadian Climate Institute launched a heat pump calculator alongside the report. Click here to try it out.

heat pumps are more cost competitive than gas furnaces and air conditioning in most households
Photo courtesy of the Canadian Climate Institute

Existing policies, including carbon pricing and consumer rebates, bolster the competitiveness of heat pumps. The Institute advises governments to not only maintain these beneficial policies but also to enhance them. For example, streamlining rebate programs can make them more accessible, and establishing centralized hubs could guide consumers through the entire heat pump installation process.

Furthermore, the report emphasizes the importance of building code modifications. By setting maximum indoor temperatures and enhancing space cooling access for renters, we can further the adoption of heat pumps. Aligning policies with broader objectives, such as reducing emissions and improving resilience, is also crucial. And as heat pumps become increasingly cost-competitive, there’s a clear rationale for new buildings to embrace these technologies.

Although a heat pump is often a wise choice to improve a home’s comfort and efficiency, it’s just one of many impactful retrofit options. Making the right choice for one’s home is a complex calculation that depends on many factors unique to the building and the homeowner. Luckily, Climative has developed machine-learning models to help homeowners and city managers understand which retrofits will have the most significant impact, how much they will cost, and how they will affect emissions and energy use.

Contact us to learn more about Climative’s data platform for creating personalized low-carbon plans for every building.

Jenny Keleher

Jenny Keleher

Jenny has 12 years professional marketing experience with successes in home sustainability, biotechnology, agriculture, and more. She loves translating technology into stories and using stories to build communities.


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