Heating System Cost Guide 2024: How Much to Budget?

In Canada, winters are often long and harsh, so choosing the right heating system is important. On average, homeowners spend 64% of their household energy expenditures on heating, with bills skyrocketing to $1,200 for an average-sized home.

How can you lower your heat-related energy expenditures? Should you consider replacing your heating system to save energy in the long run?

While it represents a major investment, doing so is the best avenue. However, weighing your options by opting for the most cost-effective, eco-friendly, and low-maintenance heating system is essential to ensure your family’s comfort.

How Much Is a Whole New Heating Device in Canada?

Affordable Options

Heat Pump

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If you don’t already know about the heat pump (HP) concept, here’s a brief description. This electric device is used to transfer heat from one area in a home to another. A heat pump doesn’t generate heat; it extracts air from outside the house and transfers it inside. A heat pump provides both heating and cooling functions.

The cost of a heat pump varies based on its power and installation characteristics. Prices range from $1,000 to $15,000, depending on tonnage and required energy efficiency. However, a home visit is mandatory for quoting purposes (free in most cases).

In most Canadian provinces, a standalone heat pump can’t meet household heating needs during the winter given that cold temperatures significantly weaken the unit’s efficiency. Hence, it must be connected to another heating system capable of taking over once a certain temperature threshold is cleared. Note that when it comes to poorly sealed and ineffectively insulated houses, the energy gains will be all the more limited.

Electric Heating

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Electric furnaces are known for their safety and straightforward installation, allowing for air conditioning units to be added. Their appeal to homeowners resulted in fairly advantageous power rates. Beyond its use of clean technology, electric heating systems are quiet and consume much less energy compared to select systems. Once installed, electric heating systems require very little maintenance, boasting durable performances over time. An electric furnace costs between $2,000 and $4,000.

When it comes to electric heating systems, adjustable temperature settings at any time are a definite advantage. The most efficient heaters reach their pre-set temperature in just a few minutes. Electric inertia radiators respond immediately to information communicated via the programming unit. This system allows for programming the temperature in individual rooms at once, on requested days and times. It’s a concern no more!

Standard-Priced Products

Natural Gas Furnace

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The upside to using this system is that natural gas is a non-renewable fossil fuel. This means that its energy comes from plant and animal decomposition from millions of years ago. Natural gas is made up of 70–95% methane (CH4). When using the same amount of energy, burning natural gas emits 30% less CO2 than burning fuel oil and 45% less than burning coal. Therefore, natural gas is the cleanest fossil fuel.

Aside from its ecological factor, natural gas can heat a home quickly without removing too much moisture in the air, preventing excessively dry indoor air. Thanks to this heating system, you can save energy, while cutting down time for pre-set temperatures to be reached.

Natural gas heating system equipment costs range from $4,000 to $8,000 (including grid connection and labour). Add $250–$300 for a technician's annual services and filter replacement.

Different types of natural gas heaters:

• Hot water boiler: Reliable and efficient; relies on simple and inexpensive maintenance.

• Warm air central heating: Evens out the temperature in all the rooms and offers great comfort to dwellers.

• Underfloor heating: This heating system is installed under the flooring, potentially covering an entire room or storey, generating constant heat.

• Gas fireplace: Entirely modular depending on your preferences, doesn’t generate ash and emits very few fine airborne particles, unlike a wood-burning fireplace.

Propane Heating System

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Propane is one of the lighter hydrocarbons; it’s composed of carbon and hydrogen, generated from petroleum refining practices. Even though it emits more particles than natural gas, it remains relatively cleaner, as it emits less CO2 than coal, fuel oil, and wood. A study done by the Canadian Propane Association (CPA) shows that propane appliances produce 52% fewer greenhouse gases compared to electric water heaters and 38% fewer than oil furnaces.

Propane gas heats quickly while maintaining breathable air levels. Note that product models range significantly and can be easily equipped with an air filter or humidifier. Propane heating systems are also known for their durability, which is estimated around 20 years. If you opt for a propane heater, the replacement cost ranges from $5,000 to $7,500.

Propane heating systems are also deemed good alternatives for homes located in isolated or off-the-grid areas with no access to natural gas. However, using such a heating system means installing a tank in your house. Fortunately, you can get an underground tank, kept out of sight. They’re typically leased out to customers while suppliers remain official owners.

High-End Option: Geothermal Heating

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Geothermal energy is famous for being clean, renewable, and derived from the earth. This solution is used for both heating and cooling needs. Geothermal energy is energy-efficient and has proven its worth for over 30 years, continuously evolving.

Geothermal heating systems function courtesy of two components: an underground circuit and a heat pump. According to Hydro-Québec, it allows for heating expenditure savings of up to 60% compared to electrical resistance heating (ERH). Geothermal energy is above all a sustainable solution given that an underground circuit’s service life spans over 50 years and geothermal heat pumps last roughly 20 years.

As one might expect, durability comes at a price and often requires a hefty upfront investment. For an average-sized home, plan on spending anywhere between $24,000 and $48,000 for a geothermal system. Prices vary depending on several factors, such as heating or cooling distribution system adjustments. Moreover, installing an underground circuit changes depending on the soil type and if drilling is necessary.

What Factors Affect Home Heating Costs?

Heating System Type and Efficiency

The selected heating system plays a crucial part in efficiency and cost. Traditional systems, such as gas boilers or electric heaters, may have differing installation fees and varying energy performances. Modern systems, such as geothermal heating, often yield better energy efficiency, which can lead to long-term savings on heating bills.

Labour

Labour cost is another important factor to consider when gauging heating system installation fees. Rates can vary based on the hired HVAC technician’s experience, installation complexity, and region. A qualified professional can guarantee a proper and safe installation, which can prevent problems down the line and optimize the system’s efficiency.

Duct System

Ductwork is essential to a heating system’s proper functioning. The system's design and installation can affect heating efficiency and airflow. Properly installed ducts allow for optimal airflow, reducing heat loss and improving indoor comfort. Additional costs may apply based on the current ductwork or necessary changes.

HVAC Installation Timing

Installation timing can also affect costs and service provider availability. Installing a heating system outside the busiest seasons, for example, can result in off-season rates or greater technician availability. However, planning your heating system installation before the cold front sets in is paramount, ensuring adequate comfort. Weather-related factors can also affect the installation duration and complexity. 

What Are the Additional Costs?

Maintenance

Regular upkeep is essential to ensure the heating system’s proper functioning and extend its lifespan. Maintenance includes periodic inspections, cleaning components, and replacing used or damaged parts. A good maintenance routine can also improve the system’s energy efficiency, which translates into heating bill savings. Overlooking these important aspects can lead to expensive system breakdowns and weakened performances.

Heating System Upgrades

Heating system upgrades may be necessary to improve energy efficiency or meet current requirements. Upgrades can include adding smart, programmable thermostats, improving the ductwork, or replacing obsolete components. While costs may seem relatively high at first, in the long run, they will result in significant energy savings and increased comfort.

Our Tips to Make a Well-Informed Decision

In conclusion, choosing a suitable heating system is crucial to face harsh Canadian winters, where energy costs can be quite high. By weighing your options, such as heat pumps, gas boilers, and geothermal heating, you can find something that merges efficiency, comfort, and environmental respect. Despite the initial upfront investment, long-term savings and increased comfort are worth it. Also, consider labour, maintenance, and upgrade costs to ensure long-term system performance. 

FAQ

What is the cheapest residential heating method?

The cheapest heating method, both in terms of upfront cost and installation, is most likely electric baseboard heaters. This system is relatively affordable to install given that it doesn’t require complex ductwork or heavy equipment. However, cost-in-use can be high given electricity rates, especially for large homes or during periods of intense cold.

How much is a new furnace?

On average, a new natural gas furnace typically costs between $4,000 and $5,000, including installation.  

What is the most cost-effective heating system in Canada?

In the long term, the most cost-effective heating system in Canada is typically a heat pump. It can generate more heat than it consumes electricity, which makes for a very effective choice.

Pairing a heat pump and space heaters (electric baseboards for colder months) is often considered the most worthwhile option to face the harsh Canadian climate. Moreover, there are grants available, promoting the installation of energy-efficient heat pumps. 

Is gas banned from new constructions in certain Canadian provinces?

Installing gas-fired heating systems isn’t banned in Quebec, but more restrictions are established to promote the use of clean energy. Natural gas heating systems are still authorized, but certain cities like Montréal and Vancouver have started limiting the installation of new gas-fired heating systems in new residential constructions to reduce greenhouse gas emissions.

These initiatives are part of a global energy transition effort geared toward more eco-friendly solutions, such as electric heat pumps. However, already installed gas-fired heating systems can still be used and maintained. New regulations to come could reinforce said restrictions over the coming years.