Understand how air-source and ground-source heat pumps heat and cool Canadian homes, how they handle winter, and how to choose one wisely.
Space heating is the single biggest use of energy in most Canadian homes, and for decades it has mostly meant burning natural gas, oil or propane, or running electric baseboards. Heat pumps offer a different approach: instead of creating heat, they move it from outside into your home in winter and reverse the process in summer to provide air conditioning.
Heat pumps have improved dramatically. Cold-climate models now keep heating through much of the Canadian winter, and ground-source geothermal systems have been heating Canadian homes reliably for decades. Yet many homeowners still hear mixed messages about whether heat pumps work here, what they cost to run, and how they fit with an existing furnace.
This course walks you through the fundamentals: how heat pumps work, the main types, how they handle cold weather, when geothermal makes sense, how to read efficiency ratings, and how to compare costs honestly with your current system. Sundamentals is an independent non-profit, so we don't sell equipment or favour any brand.
The course is free, self-paced and takes about an hour. It has three modules with short knowledge checks and a 10-question final exam. Score 80% or higher on the exam to download your PDF certificate of completion.
A heat pump works on the same principle as your refrigerator. A fridge pulls heat out of its insides and releases it through coils into your kitchen. A heat pump does the same thing on a larger scale, pulling heat from the outdoor air or the ground and releasing it inside your home. In summer, it runs in reverse and works as an air conditioner.
Even cold outdoor air contains heat energy. Inside the heat pump, a fluid called a refrigerant circulates in a loop. It absorbs heat outdoors as it evaporates, a compressor squeezes it to raise its temperature, and it releases that heat indoors as it condenses. A valve can reverse the flow to switch between heating and cooling.
Because a heat pump moves heat rather than generating it, it can deliver more heat energy than the electricity it consumes. This is measured as the coefficient of performance, or COP. A COP of 3 means the system delivers three units of heat for every unit of electricity. Electric baseboard heaters, by comparison, have a COP of 1, and even the best fuel-burning furnace delivers slightly less than one unit of heat per unit of fuel energy.
The COP isn't fixed. It is highest in mild weather and falls as the outdoor temperature drops, because there is less heat to gather and a bigger temperature difference to overcome. Understanding that pattern is the key to understanding how heat pumps perform in Canada.
Air-source heat pumps are the most common type. A ducted, or central, air-source heat pump has an outdoor unit and an indoor coil that connects to your existing ductwork, often alongside a furnace or air handler. It is a natural fit for homes that already have ducts.
Ductless mini-split heat pumps have an outdoor unit connected by small refrigerant lines to one or more wall- or ceiling-mounted indoor heads. They suit homes heated by baseboards, boilers or wood stoves, additions, and older homes without ducts. Each head can be controlled separately, which allows room-by-room comfort.
Cold-climate air-source heat pumps are designed and tested to keep delivering useful heat at low outdoor temperatures, typically using variable-speed compressors that ramp up and down smoothly instead of switching fully on and off. For most of Canada, choosing a model with good cold-climate performance is strongly recommended.
Two other arrangements are worth knowing. A hybrid, or dual-fuel, system pairs a heat pump with a gas or propane furnace, letting the furnace take over in the coldest weather. Ground-source heat pumps, often called geothermal, draw heat from the earth instead of the air; Module 2 covers them in detail. There are also air-to-water heat pumps that feed hot-water systems like radiators or in-floor heating.
Choosing among these types depends on your home. Ask yourself whether you have ducts in good condition, how many rooms or zones you need to heat, whether you plan to keep your existing furnace for a while, and how cold your winters get. A good contractor will explain why a particular type suits your home rather than simply offering the model they happen to stock.
The most common question about heat pumps in Canada is whether they work when it is truly cold. Modern cold-climate models can keep heating at outdoor temperatures of around minus 25 degrees Celsius, and some even colder, according to manufacturer specifications. However, both their heating output and their efficiency drop as temperatures fall.
That is why most Canadian installations include some form of backup or supplementary heat. This could be electric resistance elements in the air handler, existing baseboards, or a gas furnace in a hybrid setup. On the coldest days, the backup fills the gap; for most of the heating season, the heat pump does the bulk of the work at a much higher efficiency.
In winter you may notice the outdoor unit pausing to defrost. Frost builds up on the outdoor coil in cold, humid weather, and the unit briefly reverses to melt it. You may see steam rising from the unit. This is normal. The outdoor unit should sit on a raised stand or wall bracket above typical snow depth, with clear space around it and away from roof drip lines.
Comfort also feels different. Heat pumps usually deliver air that is warm rather than hot, running longer and more steadily than a furnace that blasts hot air in short bursts. Many people find the steadier temperature more comfortable once they get used to it.
If you are considering a heat pump, ask the contractor what temperature your system is expected to handle on its own and at what point backup heat takes over. This is sometimes called the balance point. Knowing it helps you understand how much of the winter the heat pump will carry by itself, and what you should expect from your energy bills during a cold snap.
A few metres below the surface, the ground stays at a fairly steady temperature all year, cooler than the air in summer and much warmer than the air in a Canadian winter. Ground-source heat pumps take advantage of that stability. Instead of pulling heat from cold winter air, they draw it from the earth.
The system circulates a fluid, usually water mixed with antifreeze, through a loop of plastic pipe buried in the ground. The fluid picks up heat from the earth and carries it to a heat pump inside the home, which concentrates it and distributes it through ducts or a hot-water system. In summer, the process reverses and heat from the home is released into the ground.
There are a few loop designs. Horizontal loops are laid in trenches and need a large area of land. Vertical loops run down boreholes drilled deep into the ground and suit smaller lots. Open-loop systems pump groundwater from a well, pass it through the heat pump and return it to the ground, but they depend on suitable water supply and local rules.
Because the ground is warmer than winter air, a ground-source system runs at a more consistent and generally higher efficiency through the coldest months than an air-source unit. It also has no outdoor unit to deal with snow or defrost cycles.
Ground-source systems can also be set up to help with domestic hot water, for example by preheating water for your water tank. Inside the home, the equipment looks much like a furnace and is usually installed in a basement or utility room, so there is nothing visible outdoors once the loop is buried and the landscaping has been restored.
Geothermal systems usually cost considerably more to install than air-source heat pumps, mainly because of the drilling or excavation needed for the ground loop. In exchange, they offer steady efficiency, long equipment life and very low operating costs. The buried loop is typically designed to last for decades, well beyond the life of the indoor heat pump unit.
Geothermal tends to make the most sense in a few situations: rural homes with plenty of land, new construction where excavation is already happening, homes currently heated by expensive fuels like oil, propane or electric resistance, and owners who plan to stay in the home long enough to benefit from the lower running costs.
Site conditions matter. The type of soil and rock affects drilling costs and loop design, and access for drilling equipment is needed. Choose a contractor experienced with ground-source systems, and ask about loop design calculations, drilling permits, and the warranty on both the loop and the heat pump.
Some Canadian neighbourhoods and developers are also exploring shared or community geothermal systems, where several homes connect to a common ground loop. These can lower the cost per home, but they are still relatively uncommon. If geothermal is not practical for you, a cold-climate air-source heat pump offers many of the same benefits at a lower up-front cost.
When you compare quotes, look beyond the installed price. Ask each contractor for an estimate of yearly operating costs compared with your current system, the expected life of the indoor unit and of the loop, and what maintenance is needed. A system that costs more up front can still be the better long-term choice if it runs efficiently for decades with modest upkeep and few repairs.
Correct sizing is one of the most important parts of a good heat pump installation. A contractor should calculate your home's heat loss, room by room, based on insulation, windows, air leakage and local climate. In Canada, this is often done using the CSA F280 standard. Sizing based only on the old furnace's size or a rule of thumb can lead to poor comfort and efficiency.
An undersized system will rely heavily on backup heat. A badly oversized system may cycle on and off frequently, waste energy and remove humidity poorly in summer. Variable-speed equipment is more forgiving, but a proper load calculation is still essential. Improving insulation and air sealing first can let you buy a smaller, less expensive heat pump.
Heat pumps carry efficiency ratings. HSPF2 rates heating efficiency over a season, SEER2 rates cooling efficiency, and higher numbers are better for both. For Canadian winters, look specifically at cold-climate data, such as how much heating capacity and what COP the unit delivers at minus 15 degrees Celsius and below. ENERGY STAR certification and published cold-climate performance listings can help you compare models.
Installation quality matters as much as the equipment. Refrigerant lines must be sized, sealed and charged correctly, ducts may need sealing or modification, and the outdoor unit needs a stable, well-drained base. Ask whether the contractor is certified to handle refrigerants, whether they will commission the system and show you the settings, and what their workmanship warranty covers. A well-installed mid-range unit often outperforms a poorly installed premium one.
Whether a heat pump lowers your energy bills depends mainly on what you heat with now and on local electricity and fuel prices. Savings are usually largest when a heat pump replaces electric baseboards, heating oil or propane. Replacing a natural gas furnace can save less, or sometimes cost a bit more to run, depending on your province's rates.
Recent policy changes affect the math. The federal consumer carbon charge on fuels such as natural gas, propane and heating oil was set to zero in April 2025, which lowered the price of those fuels relative to electricity. A good contractor or energy advisor should compare costs using your actual rates and usage, not national averages. Remember that a heat pump also replaces your air conditioner, which is part of its value.
Incentives change frequently. The federal Canada Greener Homes Grant, which helped many Canadians install heat pumps, closed to new applicants in 2024. In 2026, a new federal Canada Greener Homes Affordability Program focused on low- and median-income households began rolling out through provincial and utility partners in some provinces. Many provinces and utilities also run their own programs. Use the Sundamentals rebate finder to see what is available where you live, and check each program's rules before you sign a contract, since some require pre-approval.
To run the numbers yourself, look up how much fuel you used for heating last year and what you paid, then ask your contractor or energy advisor for an estimate of the heat pump's electricity use for the same heat. Remember to factor in any savings from removing a separate air conditioner or ending a fuel delivery contract, and any change in your monthly fixed charges if you disconnect from gas service entirely.
Heat pumps work best with steady settings. Large overnight setbacks can trigger backup heat in the morning as the system tries to recover quickly, wiping out savings. Many contractors recommend modest setbacks or none at all. A thermostat designed for heat pumps, set up correctly, helps the system choose when to use backup heat.
Maintenance is straightforward. Clean or replace filters regularly, keep the outdoor unit clear of snow, ice, leaves and debris, and keep shrubs trimmed back. Schedule periodic professional servicing to check refrigerant levels, electrical connections and drainage. Ductless indoor heads have washable filters that should be cleaned often.
Heat pumps typically last about as long as other home heating and cooling equipment, often around 15 years or more with good care. Ground loops last far longer. Ask about the warranty terms and whether registering the product extends them, and keep records of installation and servicing.
Finally, don't ignore the rest of your home. Air sealing and insulation reduce the amount of heat your heat pump needs to deliver, making it more comfortable in the coldest weather and cheaper to run all year.
Get to know your system's controls and sounds. Outdoor units hum and whir, and you may hear a whoosh during defrost cycles. Ductless units often have several operating modes, so make sure you are using heating mode in winter rather than auto or fan-only settings. If rooms feel cool, check that indoor heads are not blocked by furniture or curtains before calling a technician for service.
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