Chart of the Week | Heat pumps

Heat Pumps in the News

The federal government recently announced new supports for Canadians to retrofit their homes with heat pumps, which are more energy efficient than older electric-heating systems and furnaces that burn natural gas or fuel oil. Prime Minister Mark Carney said the program will include up to $2 billion in federal funds over the next eight years to help up to 1.1 million households – roughly 6.5% of total households in Canada – make the switch. Ottawa says the program will reduce energy usage, cut greenhouse gas emissions and save Canadians money.

How Heat Pumps Work

Heat pumps work fundamentally differently than traditional furnaces and electric heaters. Rather than burning fuel or using electricity to generate heat, they use electricity to gather heat from the outside air, concentrate it, and move it inside. (It’s like an air conditioner running in reverse.) This process is more efficient than generating heat directly, even at relatively low temperatures, as cold outdoor air still contains some amount of heat that can be captured. The most efficient furnaces turn about 98% of their fuel into usable heat, but heat pumps achieve 1.5 to 5 times that level of efficiency. In other words, they can deliver several times more energy in heat than they consume in electricity, although that level of efficiency drops in very cold temperatures (below –20 C).

Charts of the Week

While heat pumps are relatively rare in some parts of Canada, they are increasingly common in Atlantic Canada.

Adoption has been highest in New Brunswick, where nearly half of homes used heat pumps as their primary source of heating as of 2023, according to the latest data from Statistics Canada. Heat pump adoption has also risen rapidly in recent years in Nova Scotia, Prince Edward Island and Newfoundland and Labrador.

Heat-pump adoption in Ontario and across the Prairies, by contrast, has been much slower. In these provinces, the dominant energy source for home heating is natural gas, which has seen relatively low and even decreasing retail prices in recent years, thereby reducing the economic incentive to switch. In addition, availability of cold-climate heat pumps that can operate in colder temperatures reached in some of these regions is only starting to increase. 

The economic incentive to switch to heat pumps is especially high in Atlantic Canada, where many households rely on fuel-oil furnaces. Fuel oil prices are notoriously volatile and have risen sharply in recent years. Electricity prices, by comparison, have been relatively low and stable, making the switch to electric heat pumps particularly appealing to Atlantic Canadians. The proximity to the Atlantic Ocean also means somewhat milder winters, without the frequent, extreme low temperatures experienced on the Prairies.

Related work at the University 

To learn more about heat pumps, see the following work in progress and past work from UCalgary affiliates to the Electricity Centre. 

Work in progress

• Rivers, N., Shaffer, B., & Myers, E. Hybrid or Electric? Experimental Evidence on Heat Pump Performance and Decarbonization in Cold Climates.
• Garg, T., Hernandez-Cortes, D., McCord, G., Wichman, C., & Myers, E. The Price of Electrification: Experimental Evidence on Heat Pump Subsidies

Past work

• Fry, N., Khajehdehi, O., Hastings-Simon, S., Shor, R., & Mwesigye, A. (2026). Geothermal energy network transition dynamics for the existing building stock—A case study for New York. Energy Strategy Reviews, 65, 102238.
• Edenhofer, O., Gerster, A., Gessner, J., Myers, E., Pahle, M., & Palmer, K. (2025). Targeted policies to break the deadlock on heating bans. Nature Climate Change, 15(6), 578–580. 
• Hastings-Simon, S. (2023). Heat pumps in Alberta may be greener, but is the weather too cold for them? (2023). CBC Interview.[BS6] 
• Calero, F., Cañizares, C. A., Bhattacharya, K., Anierobi, C., Calero, I., De Souza, M. F. Z., Farrokhabadi, M., Guzman, N. S., Mendieta, W., Peralta, D., Solanki, B. V., Padmanabhan, N., & Violante, W. (2023). A Review of Modeling and Applications of Energy Storage Systems in Power Grids. Proceedings of the IEEE, 111(7), 806–831.
• Oke, K., Dees, J., Goldstein, H., McCoy, S., Sanchez, D. L., & Simon, A. J. (2022). Emissions reduction pathways in ethanol mills: Carbon capture and storage or electrification? SSRN. 
• Shaik, A., Benneker, A., & McCoy, S. (2022). Achieving net negative CO2 emissions with sorbent direct air capture under different energy inputs and climate variations. SSRN.