Clean Energy Canada | Heat pumps in Canada’s clean energy transition 
August 29, 2023

Buildings are the third-largest source of carbon emissions in Canada, with space and water heating being the major contributors. 

It is necessary to move toward cleaner and more affordable ways of heating and cooling buildings to achieve net-zero emissions by 2050. Heat pumps can play a key role in the clean energy transition, all while protecting your pocketbook. Learn more about the cost-saving benefits of heat pumps in our upcoming 2024 affordability report.

How heat pumps work

Heat pumps use technology similar to that in a refrigerator or air conditioner. They function by transferring and compressing heat, which can be used in the form of hot air for forced air heating or to heat up water (either for hot water use or for central heating systems). Heat pumps also provide cooling, which means you won’t need a separate air conditioner in your home.

There are two kinds of heat pumps: air source and ground source. The former are the most common and take heat from the ambient air. Even when the air outside feels cold, there is still heat energy present that a heat pump can leverage. Ground source heat pumps take heat from underground, where geothermal energy provides a never-ending source. 

Benefits of heat pumps

Household savings

  • Installing a heat pump is already the most cost-effective option for most Canadian households over the lifetime of the system due to higher efficiency. Specifically, standard air source heat pumps with a backup are generally more cost-effective than gas-fired heating with air conditioning.
  • There are federal and provincial rebates available for home energy upgrades to help with upfront costs. Check out our report, A Clean Bill, to see what’s available and where.
  • Heat pumps with electric backup tend to be the lowest-cost options, particularly for single-detached homes and townhouses, in Vancouver, Halifax, and Montreal. 
  • By moving away from gas altogether, a household can remove its natural gas hook up, which can save between around $170 and $470 a year depending on the province. 
  • A household in St. John’s, Newfoundland, that switches from baseboard heating to a heat pump could knock $860 a month off their bill. 
  • A family living in a detached house in a Toronto suburb that adopts all-electric cars and a heat pump could save $550 on their monthly energy bills (including equipment costs) compared to one that remains reliant on fossil fuels. The same scenario in Vancouver could save a family $725 on their monthly energy bills.

Emissions savings and efficiency

  • Heat pumps are key to decarbonizing buildings. In fact, electrifying heating with heat pumps could cut global emissions by over 500 million tonnes by 2030.
  • Heat pumps, on average, operate three times more efficiently than electric resistance or electric boiler heating and  two to five times more efficiently than a natural gas furnace. 
  • Electricity-powered heat pumps can lead to nearly zero-emissions heating and cooling in regions where the electrical grids are powered by clean energy. Even when running on emissions-intensive electricity, heat pumps emit between 20% and 30 % less carbon than gas furnaces because of their high efficiency.
  • Emissions savings from heat  pumps will only increase with time as the grid becomes increasingly cleaner.

Heat pumps cool as well as heat

  • Heat pumps can address both heating and cooling needs, making them not only a great deal but also a tool to protect people during dangerously hot days.
  • Compared to dedicated air conditioning units, which are unable to heat, heat pumps offer energy savings benefits as they provide cooling along with heating, thus eliminating the need for an additional, separate appliance. 

What about the Canadian Winter?

  • Heat pumps are most popular in some of the coldest countries: Finland, Norway, and Sweden.

    • Studies in Finland found several heat pump models that maintained heating efficiency at outside temperatures as low as -30C.  

  • Since air source heat pumps work through compressing heat from the outside air, they are less efficient in cold weather. However, this does not prevent air source heat pumps from lowering emissions and costs even in cold climates. There are a range of new models of “cold climate” air source heat pumps that can withstand Canadian winters.

    • In a government-led trial in the Yukon, heat pumps were successfully used at temperatures down to -29C. To put this in context, Toronto only saw temperatures drop below -20C on 16 days between 2018 and 2023.

  • Ground source heat pumps, which use heat from underground rather than the outside air, could also be a good option in some places in Canada, offering very high heating efficiencies in the coldest winter months— even when the mercury drops below -30C.