Yes, a Heat Pump Can Help Save You Money and Reduce Your Emissions

Maxine Betteridge-MoesJune 1, 2023

If you’re looking for ways to reduce your household energy bills while also doing your part for the environment, you might have heard the buzz about heat pumps as a low-emissions, cost-efficient alternative to traditional heating and cooling systems.

But what exactly is a heat pump, and will it save you money? Let's dig in.

Heat pumps regulate the temperature of your home, and emit fewer greenhouse gas emissions than traditional heating and cooling systems that rely on fossil fuels. The name ‘heat pump’ can be a bit misleading, as they work to both heat and cool your home.

There are many kinds of heat pumps, but they all operate on the same basic principle: heat transfer. During the colder months, heat pumps use electricity to extract heat from the outdoor air or ground and move it inside to warm your home. In the warmer seasons, heat pumps cool your home by moving heat from inside to the outdoors.

The two most common types of heat pumps in Canada are:

Heat pumps can help to reduce the household greenhouse gas emissions because they are powered by electricity. Electricity across Canada is often a cleaner energy source than natural gas — especially if the electricity in your area is generated by a renewable energy source, like hydro.

Deciding if your home is suitable for a heat pump depends on several factors:

The cost of heat pump installation in Canada varies, depending on some of the factors above.

The cost of installing an ASHP can range from approximately $4,000 to $10,000 or more, depending on the size of the system, the efficiency rating, and the complexity of the installation.

GSHP installations tend to be more expensive due to the additional cost of ground loop installation. The cost can range from $15,000 to $30,000 or more, depending on factors such as the size of the system, the length and type of ground loop (horizontal or vertical), and the specific site conditions.

Try to obtain multiple quotes from reputable HVAC contractors in your area and use this to compare with your current energy spending to determine whether a heat pump can help you save money in the long run.

The Canadian Greener Homes Initiative aims to help homeowners save money, create new jobs nationwide for energy advisors and fight climate change. The initiative offers various incentives and programs, including the Oil to Heat Pump Affordability Grant, which provides eligible households with up to $5,000 to cover costs that include the purchase and installation of heat pumps, necessary electrical upgrades, and safe removal of the oil tank.

Some municipalities and utility companies across Canada also offer their own energy efficiency programs and incentives, including for heat pump installations. Check with your local municipality, utility company, or HVAC contractor for more information.

The RBC Energy Saver Loan can also help you to finance energy-efficient products or services, while saving on your borrowing costs.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

Maxine Betteridge-MoesJune 1, 2023

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