How Heat Pumps Save Homeowners Money Year-Round

Heat pumps save money in three ways: efficient heating, efficient cooling and rebates on the upfront cost. How much you save depends mostly on what you heat with today.

Installation Insights. Updated October 22, 2026

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Winter: moving heat instead of making it

An electric baseboard turns one unit of electricity into one unit of heat. A heat pump uses electricity to move heat from outside, so in mild weather it can deliver two to three times as much heat for the same electricity. Its efficiency drops as it gets colder, but cold-climate models stay well ahead of electric resistance heat through most of a Durham winter.

Who saves the most

  • Electric baseboard or electric furnace: usually large savings.
  • Oil or propane: usually large savings, and the biggest rebate.
  • Natural gas: smaller savings that depend on energy prices. A hybrid system that uses gas only on the coldest days is often the best balance.

Summer: an efficient air conditioner

A heat pump is also a high-efficiency air conditioner. If you are replacing an older AC anyway, you gain heating ability for the difference in price.

Rebates

Through the Home Renovation Savings program, homes heated with electricity, oil, propane or wood can get $1,250 per ton, up to $7,500, for a cold-climate air-source heat pump. Homes heated with natural gas can get $500 per ton, up to $2,000. Pre-approval is required before installation.

Get the most out of it

  • Get the size right, based on a heat-loss calculation.
  • Seal drafts and top up attic insulation if you can.
  • Avoid big thermostat setbacks that trigger backup heat.
  • Keep filters clean and the outdoor unit clear of snow.

Common questions

How much will I save per year?

It depends on your current fuel, energy prices, your home and the system. Ask the contractor to estimate running costs as part of your quote.

General information for Ontario homeowners, not advice for your specific home. Rebate programs and rules change, so confirm current terms before you buy.

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