Replacing a Failing Furnace: Heat Pump or New Furnace?

How do you decide between a heat pump and a new furnace?

Start with the question that decides most cases: what does a unit of heat cost you each way? A gas furnace converts most of the fuel into heat. A cold-climate heat pump moves heat from outdoor air and delivers more than one unit of heat for each unit of electricity. Whether that wins depends on your local rates, and rates differ a lot between provinces and from year to year.

Look at a recent winter bill for each fuel, then ask a contractor for the seasonal performance of the models they propose. The wider comparison is in heat pump vs furnace in Canada, and natural gas vs electric heating explains the rate logic.

What does the house need before a heat pump?

Run through this list before the contractor arrives.

• Electrical panel. Is there spare capacity for a new circuit, and what amperage is the service? A load calculation decides, not guesswork.
• Ductwork. Heat pumps move more air at lower temperatures than a furnace. Small or leaky ducts cause noise and weak heating.
• Envelope. Drafty, poorly insulated houses need a bigger system. A home energy audit can show whether insulation or air sealing should come first.
• Outdoor space. The unit needs clearance, drainage and a spot away from snow slides and bedroom windows.

What about the coldest days?

Heat pump output drops as the outdoor temperature falls, and each model has a published capacity curve. Ask for the figure at your design temperature, not at a mild test point. If the house needs more heat than the unit can deliver on the worst nights, there are three common answers: electric resistance backup, a bigger heat pump, or keeping the gas furnace as a backup in a hybrid dual-fuel system.

For sizing logic in cold regions, see heat pump sizing for cold climates. A contractor who cannot explain backup heat on the coldest night has not done the homework.

Which choice suits which situation?

A new high-efficiency furnace tends to make sense when gas is cheap, the panel is full, the ducts are in poor shape and you plan to sell soon. A heat pump tends to make sense when you also want cooling, when gas prices are high relative to power, or when you intend to cut fossil fuel use. A hybrid fits in between: the heat pump handles most of the season and the furnace covers the worst cold.

Grants and incentives may influence the answer, so check the current terms with the federal energy-efficiency pages, your provincial energy ministry and your utility rather than relying on a contractor's summary. How to check heat pump rebates covers where to look.

What should you ask for in writing?

Request both options priced in the same format: equipment, install, electrical, duct changes, permits and warranty. Ask for the estimated annual running cost under stated rate assumptions, and for the heat loss figure behind the sizing. If one quote cannot show its math, treat it as a guess. Dlsc.ca takes the same approach with its low-temperature solar heating explainer: design numbers first, equipment second.

A quick worked comparison

Take an invented house for illustration: it needs about 60 gigajoules of heat a year, gas costs a fixed amount per gigajoule and a modern furnace turns about 95 percent of that fuel into heat. A cold-climate heat pump averaging a seasonal efficiency of 2.5 delivers 2.5 units of heat per unit of electricity. Convert both fuels to the same unit, multiply by your own local rates and the winner appears in a few lines.

Those figures are assumptions, not forecasts. Swap in the numbers from your last bill and the efficiency printed on each quote. If the result is close, the tie-breakers are cooling, backup heat, panel capacity and how long you plan to stay in the house.

Quick answers