Does a heat pump cost less to run than natural gas?
Sometimes, not always. Compare the delivered heating energy you need, your gas price and furnace efficiency, your electricity price, the heat pump's seasonal performance, and how often backup heat operates. Climate, insulation and utility rate design can change the outcome. A heat pump also may supply cooling, but that value should be considered separately.
Natural Resources Canada describes coefficient of performance (COP) as heat delivered divided by electricity consumed; real COP changes with outdoor temperature. A rated COP at a mild test condition is not the system's full-winter performance. Ask for cold-weather capacity and regional seasonal-performance data relevant to your location.
A transparent arithmetic example—not a forecast
Suppose a house needs 20,000 kWh of useful heat during a season. In this illustration only, natural gas costs $0.10 per input kWh, a furnace is 95% efficient, electricity costs $0.16/kWh, and the heat pump achieves an assumed seasonal COP of 2.5. These assumed prices are not verified current rates for any Canadian city.
| Calculation | Illustrative result |
|---|---|
| Gas input energy: 20,000 ÷ 0.95 | 21,053 kWh equivalent |
| Gas variable energy cost: 21,053 × $0.10 | About $2,105 |
| Heat-pump electricity: 20,000 ÷ 2.5 | 8,000 kWh |
| Heat-pump variable energy cost: 8,000 × $0.16 | $1,280 |
| Illustrative difference in variable energy charges | About $825 |
This comparison omits delivery and fixed account charges, applicable taxes, backup heat, equipment purchase/financing, maintenance and cooling. If the actual seasonal COP falls, the electricity price rises, or gas has a more favourable tariff, the outcome changes. Do not quote the $825 as your home's expected savings.
Why the site's savings calculator is simpler
Home Cost Canada's existing calculator is an editorial operating-cost scenario based on the current annual heating expense, existing fuel type, home efficiency and heat-pump scenario. It does not compute a full energy balance from local hourly weather, furnace AFUE, utility tariff tiers, COP curves or electric backup heat. Its result represents assumptions to explore, not a contractor assessment or guaranteed savings.
For a more reliable decision, assemble 12 months of both fuel and electricity bills; identify which charges are actually avoidable, and ask a qualified designer for a room-by-room heat-loss calculation and cold-weather equipment capacity. If you have a dual-fuel system, check the temperature at which backup fuel takes over.
Questions that make installer proposals comparable
- What is the design heat loss of the building and the proposed system capacity at local winter design temperatures?
- What equipment performance data applies at -8°C or colder, and what supplemental heating is included?
- How much of the existing ductwork, electrical panel, ventilation or controls needs changes?
- What parts of the annual heating load will use the heat pump versus backup heat?
- Does the quote include commissioning, permits, disposal, taxes and service coverage?
Rebate and total-cost pitfalls
Do not count a rebate until you've confirmed the specific program, effective date, equipment eligibility, application order and funding availability. Installed capital cost and monthly utility costs are different decisions: a device that lowers bills can still have a long payback when installed prematurely. Compare replace-now versus end-of-life installation scenarios.
Common questions
Can a heat pump work in cold climates? Some cold-climate products operate at low temperatures, but output and efficiency vary with model and weather. Verify certified test data and backup design.
Should I enter my full gas bill? Only if you understand what portion relates to heating and which fees remain after switching. A whole-account amount that includes hot water or fixed service charges can mislead.
Inputs and regional multipliers represent transparent editorial scenarios; they cannot replace a written local quote, professional assessment or current local rule check.
Read the full methodology →Adjust the assumptions in the calculator.
Planning information only. Confirm prices, eligibility, permits, taxes and property-specific conditions with the relevant professionals and authorities.
Sources and model limitations
Official links support the general guidance, not the accuracy of the site’s editorial dollar estimates. All examples are model assumptions or separately labelled arithmetic, not observed contractor bids, guaranteed savings, a permit determination or a rebate-eligibility decision. Sources checked October 11, 2026; verify changes at the source.