Furnace or heat pump? Why not heat your home with both?

Can’t decide whether to ditch your furnace for a heat pump? Having a hybrid system with both kinds of heating comes with advantages, say researchers and those in the HVAC industry. Here’s a closer look at the pros and cons, and whether this is the right choice for your home.

Why you might want a heat pump in the first place

Heat pumps are a very efficient form of electric heating that governments are encouraging Canadians to install through a number of incentive programs (more on that later).

That’s due to a number of benefits:

Heat pumps run on electricity, so they’ll cut your carbon emissions if you’re moving away from fossil fuel heating such as oil, gas or propane (reducing the impact on climate change, since fossil fuel emissions are the main cause). And they use less electricity compared to other kinds of electric heating.

Heat pumps don’t just offer heating but also or – something that more and more Canadians want or need as the Earth’s temperature warms with climate change and we get more heat waves. (Canada just had its hottest summer in 76 years.)

In many cases, heat pumps can save money compared to other forms of heating, especially oil, propane and electric heating with baseboard heaters or electric furnaces, which are less efficient.

Why add a heat pump to your existing system instead of replacing it?

You can often combine your existing heating system with a heat pump. If they use two different sources of energy, that’s called a hybrid, dual fuel or dual energy system.

Why might you want to add to your system instead of replacing it completely?

This was the case for Jeremy Sager, a research engineer at CanMet Energy, a division of Natural Resources Canada, who had recently bought a new furnace, but whose air conditioner was very old and loud.

Sager, who describes himself as “quite environmentally motivated” had done research showing that gas furnace-heat pump hybrid systems can cut greenhouse gas emissions. So in October, he replaced his air conditioner with a heat pump.

Victor Hyman is executive director of the Climate Care Cooperative, which includes 30 HVAC contractors across Ontario. He recommends considering a hybrid system if your gas furnace is less than 10 years old (not close to its 12 to 15 year lifespan).

“If you’ve got a furnace that’s five years old or younger, adding a heat pump is a no brainer,” he said.

Meanwhile, he added, heat pumps are “way more efficient” at cooling than a typical air conditioner. And the grants available for heat pumps will “pick up the vast majority of the cost.”

“It will cost you less today to install a very good [cold climate] heat pump than to install an average air conditioner. So please don’t make that mistake.”

This could be for technical or financial reasons, or even unfamiliarity with heat pump technology.

“The opportunity to do a hybrid system kind of alleviates some of that anxiety,” Hyman said.

Just replacing your air conditioner with a heat pump is cheaper than a whole heating/cooling system upgrade.

From a technical perspective, older homes or homes without ductwork (such as those that have radiators) can be more complicated and expensive to completely electrify.

How much can hybrid systems cut greenhouse gas emissions?

Studies show hybrid heating systems reduce greenhouse gas emissions, but how much depends on the local climate, the size of the heat pump, and emissions generated by the local electricity system. It also depends on when you use each system — if you mostly use the heat pump, even when it’s very cold, you will cut emissions more.

A 2021 case study from the Toronto and Region Conservation Authority’s Sustainable Technologies Evaluation Program found that a hybrid system reduced natural gas consumption for space heating by 65 per cent in a century-old Toronto home.

Sager did a study in Ottawa, where the climate is colder, from 2016 to 2019, where the air conditioners were replaced with heat pumps the same size (too small to fully heat the homes all the time), and the system switched to the furnace whenever it was cheaper to run. In that case, adding the heat pump reduced emissions by 30 per cent.

Given that there are more than five million homes in Canada heated with natural gas, he said this technology has “huge potential” to cut greenhouse gas emissions, especially give the low investment required.

Sager added that you can cut emissions even more by installing a cold-climate heat pump that’s large enough to fully heat your home. That’s what he did, and he plans to run the heat pump even when it’s so cold that it would be cheaper to heat the house with the gas furnace

Hyman says most people with a cold-climate heat pump set their system to switch to the furnace at -5 C or -10 C. “If it’s sized a little bit more aggressively, you might be able to go down to even -15 C.”

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OK, but do hybrid heating systems save money?

As mentioned, the up-front cost of adding a heat pump to your furnace can be less than the cost of adding an air conditioner, once government incentives are factored in.

As for energy bills, in both the Toronto and Ottawa studies the hybrid system was slightly more expensive to run than a gas furnace alone — $64 more over the heating season (December 2020 to May 2021) for the Toronto house (about 8 per cent). That was small compared to the emissions reduced.

But both studies took place when the federal carbon price and natural gas prices were lower than they are now, and they noted that the hybrid system should become cheaper relative to the furnace as the federal carbon price increases and if gas prices rise.

As with other fossil fuels, the cost of natural gas can also be volatile. Hyman said being able to switch between gas and electricity is “great way of hedging against the future cost of natural gas.”

A number of thermostat companies are now making smart controls available, similar to the ones in the Ottawa study, that can switch between the furnace and the heat pump depending on the local electricity price, which has the potential to save more money.

What kinds of heating can work with a heat pump?

Pretty much any kind of heating system can work with ductless heat pumps, which are installed in the exterior wall like a ductless air conditioner. That can include wood stoves, electric baseboards or boiler and radiator systems, among other things.

Ductless heat pumps can work with just about any heating system, including boilers and radiators and wood stoves. They can also provide air conditioning. (CBC)

But forced-air gas furnace systems with ducts lend themselves especially well to integration with a heat pump.

In such cases, the heat pump’s indoor and outdoor parts can usually just be swapped for the indoor and outdoor parts of the air conditioner, and the furnace’s blower or fan is used to distribute the hot or cold air.

With an all-electric heat pump system, an extra fan called an air handler needs to be installed (in place of the furnace’s blower), and this can have more electrical requirements and add extra cost.

Can I get government incentives or rebates for adding a heat pump to my existing heating?

Yes, you can.

Hybrid systems have been eligible for $5,000 from the federal Greener Homes Grants since the program launched in May 2021, Hyman said. (Be warned that the program is running out of money.)

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And in December 2022, the government made eligible more “coil only” heat pump systems (with no air handler) designed to work with a gas furnace, Natural Resources Canada confirmed.

A number of provincial programs also offer incentives for natural-gas and heat pump hybrid or “dual energy” systems including ones in Quebec, B.C., and Ontario, which has additional grants for specific Ontario communities.

What are the disadvantages compared to going all-electric?

Obviously, going all-electric will reduce greenhouse gas emissions more than just heating part- time with a heat pump and part-time with gas.

There are also other risks associated with natural gas appliances, including carbon monoxide leaks.

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From a financial perspective, there are fixed monthly costs associated with being connected to gas that you need to pay regardless of how low your gas usage is. Hyman said there are more and more people going all-electric and disconnecting from gas to save themselves that charge.

In some cases, people who initially install a hybrid system end up disconnecting their gas later, as in the case of former Toronto city councillor Mike Layton.

Hyman recommends going with a whole heat pump system rather than just adding to your furnace if your system is more than 10 years old or getting close. He says hybrid heating systems are an intermediate step, similar to hybrid cars, as our society transitions to lower carbon options.

“The technology is getting better and better every year,” Hyman said, “and it would not surprise me in 10 years if we’re only doing all-electric systems.”