Heating cost calculator: gas vs heat pump vs electric
At typical Ontario rates, a 96% gas furnace is still the cheapest way to make heat, a cold-climate heat pump costs about the same to run as an older 80% furnace, and electric baseboards cost two and a half to three times as much. Your own bill and rates decide it.
You need one number from your gas bill: the cubic metres (m³) used in the last 12 months. No bill handy? Switch to the estimate. Every price is editable.
Compare your yearly heating cost
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Heat pump vs gas furnace, per year
At these prices, a heat pump averaging COP 2.5 costs $180 more a year to run than the 96% gas furnace.
- Heat the home needs18,880 kWh a year
- Heat pump matches gas atCOP 3.0
- Heat pump vs electric baseboards$1,700 less
Energy costs only. If gas stays in the house for a water heater, stove or backup furnace, the fixed monthly gas charge stays too, whichever heating option you pick.
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Planning estimate of energy cost from your inputs, not a quote and not a promise of savings. Real bills move with the weather, thermostat settings, the equipment, the installation and rate changes.
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A worked example
Take a 1970s two-storey in London that burned 2,500 m³ last year, 500 m³ of it in a gas water heater, with an 80% furnace. The furnace's 2,000 m³ delivered 2,000 × 10.35 × 0.80 = 16,560 kWh of heat, and that heat need stays the same whichever system makes it.
| Option | Energy used | Yearly cost |
|---|---|---|
| Keep the 80% furnace | 2,000 m³ | $1,000 |
| New 96% gas furnace | 1,667 m³ | $833 |
| Heat pump, seasonal COP 2.5 | 6,624 kWh | $994 |
| Electric baseboards | 16,560 kWh | $2,484 |
Energy only. The water heater keeps its 500 m³ and the gas account keeps its fixed charge in all four cases.
Swapping the old furnace for a heat pump barely moves this heating bill. A new 96% furnace saves about $170 a year, and leaving electric baseboards for a heat pump would save about $1,490. In a gas home, the heat pump's case rests on other things: it also replaces the air conditioner, burns no gas for heat, and gains if you buy a unit that beats a 2.5 season. Compare heat pump prices with furnace prices before you choose, or see both on one scale in the Ontario Furnace Prices index.
The formulas behind the numbers
- Heat need, kWh
- (yearly gas m³ minus non-heating m³) × 10.35 × furnace AFUE
- Gas furnace
- heat need ÷ (10.35 × AFUE) × gas price per m³
- Heat pump
- heat need ÷ seasonal COP × electricity price per kWh
- Electric resistance
- heat need × electricity price per kWh
- Break-even COP
- electricity price × 10.35 × AFUE ÷ gas price
The 10.35 is the energy in one m³ of natural gas, about 37.3 MJ. AFUE is the share that reaches your rooms: about 80% for a mid-efficiency furnace venting into a chimney, 95% to 96% for a condensing furnace with PVC pipes. Baseboards turn each kWh into a kWh of heat, a COP of 1. The estimate method swaps the bill for floor area × a heat-loss factor (4.5 kWh per sq ft a year for homes built since 2012, up to 11 for a pre-1960 house) × a climate factor (0.9 from Windsor to Toronto, up to 1.35 in the north). Those are planning assumptions, so a real bill beats them.
What COP means in an Ontario winter
COP (coefficient of performance) is heat delivered per unit of electricity: at 2.5, 1 kWh from the grid puts 2.5 kWh of heat into the house. It falls as the air gets colder. Around 8°C a cold-climate heat pump can manage 3 to 4, around -15°C it is often closer to 2, and hours on electric backup strips count at 1.
The seasonal COP is the average over the winter, weighted toward the cold weeks when the house needs the most heat. The same unit does better in Windsor than in Ottawa, and an undersized one leans harder on backup. Use 2.5 for a well-installed cold-climate unit in southern Ontario and about 2.0 for colder regions or older equipment. Our heat pump buying guide covers sizing and cold-climate ratings.
Price a heat pump and a furnace for your house
Running cost is half the decision. A free in-home estimate gives you installed prices for both, sized to your home.
Free, no obligation. About a minute to request.
Dual fuel: let the price pick the heat source
A dual fuel system pairs a heat pump with a gas furnace and switches between them. At $0.15 per kWh and $0.50 per m³, the heat pump is the cheaper source whenever its COP is above about 3.0 against a 96% furnace, or 2.5 against an 80% one. So it carries the mild spring and fall weeks and the furnace takes the coldest ones. Ask the installer what outdoor switchover temperature they will set, and why.
Dual fuel keeps the gas account and its fixed charge. It typically costs $11,000 to $20,000 installed, against $9,000 to $18,000 for a ducted heat pump alone; the heat pump cost calculator estimates yours.
What this calculator leaves out
- The fixed monthly gas charge. It stays while the account is open, so it is only a saving if every gas appliance goes.
- Cooling. A heat pump also does the job of a central air conditioner.
- Upfront price and rebates. Programs change and some need approval before installation; see heat pump rebates in Ontario.
- Your exact rates. For gas, divide a year of charges, less the fixed monthly charges, by the m³ used; for power, divide total charges by kWh. The defaults are rounded Ontario figures, reviewed October 2026.
Questions people ask
Is a heat pump cheaper to run than a gas furnace in Ontario?
Not at today's typical rates, unless the heat pump is very efficient. At $0.50 per m³ and $0.15 per kWh it needs a seasonal COP of about 3.0 to match a 96% furnace, or 2.5 to match an older 80% one. Against electric baseboards, a heat pump usually cuts the heating cost by half or more.
How do I find out how much gas I used last year?
Your gas bill shows the cubic metres used in each billing period, and many bills chart the past year. Add up 12 months, or check the usage history in your online account. Use a full year so summer is counted, then subtract the water heater share if it also runs on gas.
What seasonal COP should I enter?
Use 2.5 for a well-installed cold-climate heat pump in southern Ontario. Drop to about 2.0 for Ottawa, Barrie or northern winters, an older unit, or one not rated for cold climates. Go above 3.0 only if an installer models a seasonal figure for your house.
Will I still have a gas bill if I install a heat pump?
Yes, if anything still uses gas: a water heater, stove, fireplace, dryer or a dual fuel backup furnace. The fixed monthly charge stays while the account is open, however little gas you use. It only goes if you replace every gas appliance and close the account.