We are comparing the cost of buying a new gas furnace, water heater and conventional AC to the cost of an “all in” heat pump conversion (e.g., a cold weather air source heat pumps that provides space heating, water heating and AC).
We are assuming 85% of current gas use is for space heating and 15% is for water heating (also assuming you currently have a gas water heater). We have not factored in any cost savings from ending a water heater rental agreement when moving to a heat pump water heating system.
We assume full disconnection from gas service with heat pump conversion. If you have a gas stove or fireplace, you will need to continue to pay a fixed monthly service fee (currently this amounts to approximately $265 per year) or convert these to electric. See this article on the health impacts of gas stoves. We assume you will switch from a gas-fired water heater to a heat pump water heating system (separate from space heating and cooling heat pump system). Costs for this new system are included in our calculations.
We assume new furnace and water heater will be 5% more efficient (use 5% less gas) than current equipment.
We assume full federal Greener Homes rebate will be put toward cost of heat pump system ($5000).
We have included a $2,000 charge in the cost of the heat pump system for upgrading electrical service to 200 Amps.
We assume an increase in carbon pricing to 2030 as set out under current federal legislation. While we assume the price remains constant after that date, it is possible the price will increase to meet climate targets.
We are using an average cooling load of 20.7 Gigajoules per year. Your actual cooling usage may be higher or lower. Cooling cost using this average is about $3450 (over 15 years) with a conventional AC unit and about $3000 with a heat pump.
Costs are projected over 15 years, which should be the minimum to average lifespan of the equipment.
We are using Toronto prices for electricity and natural gas. These prices are currently 12 cents per kWh for electricity and 49.45 cents per cubic meter for gas, plus a fixed annual service charge of roughly $265 per year. We have held these prices constant (no increase) over 15 years.
This is a rough estimate calculator and should not be relied on for making financial decisions. You need a proper quotation from a contractor to fully understand costs. But this will help you get a sense of whether it is worth pursuing that and how you might benefit from converting to a heat pump system.