Last updated: By HeatPumpIndex Evidence Desk
A saving in dollars a year is only half a decision. This divides it into what the equipment costs, so the answer is a number of years, and it is honest about the case where that number does not exist.
Shown at NRCan's 2,700 m3 for a new average sized detached Canadian home.
NRCan puts the Canadian market between HSPF 7.1 and 13.2. Shown at the top of it.
Does not pay for itself
No payback
A heat pump would cost $475 a year more to run than what you have, so there is nothing for the equipment to pay back out of. The equipment still buys you cooling, and the answer moves with the electricity price.
Installed cost is the published GTA range for a ducted system: $5,000 to $12,000, Imperial Heating (Toronto, 2026 price guide). Nothing is taken off for a rebate, because what Ontario pays depends on the fuel the home burns today. Both bills exclude fixed monthly charges, which you pay for the connection rather than the heat.
An electric baseboard converts one kilowatt hour of electricity into one kilowatt hour of heat. There is nothing wrong with that and nothing clever about it either: a coefficient of performance of exactly one is what resistance heating is. A heat pump on the same meter, at the same price, at a coefficient of performance near four, buys the same heat for a quarter of the electricity.
Because both sides are billed at the identical rate, the price cancels out of the comparison entirely. The saving is one minus one over the coefficient of performance, which is about 74 percent at the top of NRCan’s published market range and about 52 percent at Canada’s regulated minimum. It does not matter how big the house is or which electricity plan it is on, and the calculator returns the same percentage whichever you set.
On the house NRCan describes, that saving is more than three thousand dollars a year, against an installed cost the GTA market publishes at $5,000 to $12,000. Fewer than four years, and often fewer than two. This is the Ontario household that should be reading about heat pumps, and it is not the one most of the marketing is addressed to.
A gas furnace at 96 percent is a hard thing to beat here, and the reason is a price ratio rather than anything about heat pumps. A cubic metre of gas delivered in a Toronto heating month costs 26.87 cents and holds 0.038 gigajoules, which is about two and a half cents for a kilowatt hour of energy. The same kilowatt hour of electricity delivered on the tiered price is nearly seven times that. A coefficient of performance under four does not close a gap of seven, so the annual figure this calculator returns for a gas house is a loss, and a loss cannot pay anything back.
Three things genuinely change that answer and none of them is a rhetorical flourish. The first is the electricity price: on the ultra low overnight plan a saving appears immediately, though the payback is long. The second is the equipment being replaced, because a household buying a heat pump is often not also buying the air conditioner it would otherwise have needed, and none of that shows up in a heating comparison. The third is what the household is optimising for, since a heat pump in a gas home is bought to stop burning gas rather than to save money on it.
What should not change the answer is the framing. A payback calculator that produced a number for every input would be a marketing instrument rather than a calculator, and this one says no when the arithmetic says no.
Two energy prices, one consumption figure, one efficiency range and one installed cost. Every one is published by a regulator, a utility, a federal department or a named GTA installer, and none is averaged or converted from a United States figure.
A payback under four years is worth three written quotes. Ask each installer for the HSPF of the equipment they are proposing, because that single figure moves the answer on this page more than anything else you can control. HeatPumpIndex lists 221 heat pump installers across the Greater Toronto Area; the three below rank highest on our HeatPumpIndex score.
In its own words, from its website: Experience top-notch HVAC repair and maintenance services in Milton and Oakville ON with Free Air Heating & Air Conditioning Ltd. Trust our expert team for AC, furnace, ductless mini-split, heat pump services, and more. Schedule your service today!
Carried on this directory for ductless mini split work and heat pump installation from a base in Leaside. Their own website names heat pump work, and the company appears on Ontario's Home Renovation Savings register.
In its own words, from its website: Family-owned for 75+ years. Service, repairs, installations & honest pricing.