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Dual Fuel Heat Pump in Ontario: Heat Pump Plus Gas Furnace, How the Switchover Works, the Economic vs Equipment Balance Point, the Controls, the Cost and When It Beats All-Electric
Heating, Cooling & Ventilation
Dual Fuel: A Heat Pump and a Gas Furnace Taking Turns, and the Number That Decides Who Works When
Dual fuel means a heat pump sitting on top of a gas furnace and sharing the ducts. The heat pump heats when it is the cheaper or better machine for the weather, the furnace takes over when it is not, and both are never running against each other. It is the most common heat pump install in a gas-heated Ontario house, and for good reason. It is also the one most often set up by default and never adjusted, which leaves money on the table every winter. This page explains the two balance points, the controls, the cost, and the arithmetic on when dual fuel beats going all-electric.
What It Costs
| Dual fuel setup | Range | Default |
|---|---|---|
| Standard heat pump replacing the AC on a working gas furnace | $7,000 to $12,000 | $9,500 |
| Cold-climate heat pump on the existing furnace and ducts | $9,000 to $18,000 | $13,000 (3 ton) |
| New high-efficiency gas furnace, if the old one is done too | $4,000 to $9,000 | $6,000 |
| Dedicated 240 V circuit, if there was no AC before | $500 to $1,500 | |
| For comparison: furnace plus central AC together, existing ducts | $6,500 to $12,500 | $10,500 |
The heat pump lines are on the heat pump cost page and furnaces on the furnace replacement cost page. The thermostat or control that runs the switchover is normally in the heat pump price; ask.
Why Ontario prices are all over the map: the contractors and price guides we checked for this page quoted very different prices for a heat pump on an existing furnace. For the cold-climate unit, one heat pump price guide said $12,000 to $18,000 and up, a national HVAC cost guide said $7,000 to $12,000, and a home-services marketplace said $4,500 to $10,000 with existing ducts, about a $13,000 spread for the same class of machine. Some include the control wiring, the line set, the pad and the rebate paperwork; some include a box on a truck. A September install and a January one are not priced the same either. Budget $13,000 for a cold-climate 3 ton, and get two or three quotes on the same written scope.
Two Balance Points, and Only One Is About Money
The equipment balance point is the outdoor temperature where the heat pump’s output drops to the house’s heat loss. Above it, the heat pump can carry the house alone. Below it, it cannot, and something has to help. On a standard heat pump that might be around freezing; on a cold-climate unit in a reasonably tight house it can be well below. The F280 heat loss and the unit’s published capacity at each temperature give you this number. Nobody should guess it.
The economic balance point is where a delivered kWh from the heat pump costs the same as one from the furnace. Gas at $0.45 a cubic metre all in, 10.4 kWh per cubic metre, through a 95 percent furnace, is about 4.6 cents a delivered kWh. Electricity at 16 cents all in divided by the heat pump’s COP has to beat that, so the break-even COP is 16 divided by 4.6, about 3.5. In mild weather a good variable-speed unit can run above that; as it gets colder its COP falls and gas gets cheaper per kWh.
So on Enbridge gas at today’s prices, the switchover is usually set by money, and it is set higher than the equipment could manage. At 15 cents power the break-even COP drops to about 3.3; at 18 cents it rises to about 3.9. That is why the first thing I ask is the bill: divide the electricity total by the kWh used and you have your own number. The heat pump vs gas calculator does the division for you and gives the break-even COP.
The Controls Are the Whole System
A dual fuel system is two machines and one brain, and the brain is where most installs go wrong. The thermostat or the heat pump’s own control needs an outdoor temperature reading and a switchover setting. Too low and the heat pump grinds through cold mornings at a COP that costs more than gas. Too high and you paid for a heat pump that heats ten days a year.
- Set the switchover from your rates, not the factory default. Write the temperature on the commissioning sheet.
- Make sure they never run together on the same coil unless the equipment is designed for it. A furnace blowing hot air across a running heat pump coil is how compressors get hurt.
- Revisit the setting when rates change. The OEB’s new supply prices take effect November 1, 2026, and the Ontario Electricity Rebate drops to 15.7 percent the same day.
- Keep the furnace serviced. It runs fewer hours but it still runs on the coldest nights, which is when you need it most. $150 to $250 a year for each machine is a fair allowance.
The furnace is still gas, so the old rules stay: TSSA-registered contractor and a certified gas technician for any furnace work, venting checked, and a CO alarm on every floor.
When Dual Fuel Beats All-Electric
Take a house that needs 18,000 kWh of delivered heat a year. All gas, at 4.6 cents, is about $828. All heat pump at a seasonal COP of 2.5 and 16 cents is about $1,152; at COP 3.2 it is about $900. On those numbers gas is cheaper per kWh, and the heat pump in a dual fuel system earns its keep mostly in mild weather and in summer as the air conditioner.
Now a worked split. Say the switchover lets the heat pump carry 40 percent of the year, 7,200 kWh, in mild weather at an average COP of 3.6: 7,200 divided by 3.6 is 2,000 kWh of electricity at 16 cents, $320. The furnace carries the other 10,800 kWh at 4.6 cents, $496.80. Total $816.80 against $828 all gas. That is a wash on the heating bill, and I will not dress it up.
What changes the picture is the fixed gas customer charge, about $25 to $30 a month whether you burn gas or not, $300 to $360 a year. Dual fuel keeps paying it. All-electric drops it, if nothing else in the house uses gas, which puts the $1,152 all-electric bill against roughly $1,128 to $1,188 for gas plus the charge. Close enough that the deciding things are the price of the electrical work, the panel, the age of the furnace and how you feel about one fuel or two. On propane at 13.3 cents a delivered kWh, none of this is close: the heat pump wins easily and dual fuel would hand the cold days to the expensive fuel.
Rebate note: in an Enbridge gas-heated home, a cold-climate unit on the NRCan list can qualify for $500 per ton up to $2,000 through Home Renovation Savings, counted at 8.3 C, with pre-approval through a participating contractor before installation. A standard unit gets nothing. If you qualify, it narrows the $3,500 gap between the $9,500 and $13,000 defaults; check the program site before you sign.
Questions people ask
What is a dual fuel heat pump?
A heat pump installed on an existing or new gas furnace, sharing the ducts and one control. The heat pump heats in milder weather and cools in summer; the furnace takes over below a switchover temperature. They take turns rather than running together.
What temperature should a dual fuel system switch to gas?
Wherever the heat pump’s COP drops below your electricity price divided by your gas cost per delivered kWh. At 16 cents power and gas at 4.6 cents delivered, that break-even COP is about 3.5. The outdoor temperature where your unit hits it is on its performance data; the installer should set it and write it down.
Does dual fuel save money over a gas furnace in Ontario?
At October 2026 prices on Enbridge gas, the heating saving is small, close to a wash on a typical house. The case for it is the air conditioner you were replacing anyway, a lower-carbon house, and a second heat source if one machine quits. Neither one runs in a power failure; the furnace needs hydro for its blower and controls too. On propane or oil the heat pump saves real money.
Can I use a standard heat pump for dual fuel?
Yes, and it is the cheaper way in, about $9,500 against $13,000 for cold-climate. The furnace covers what a standard unit cannot. A standard unit does not qualify for the heat pump rebate, and the cold-climate page explains what you give up.
Find your own switchover number
The heat pump vs gas cost calculator takes your electricity total and kWh, your gas price and your house, and gives the break-even COP, the annual cost each way, and the 15-year number. If you have a dual fuel quote and an all-electric quote side by side, the $99 review says which one fits your house.
Sources and further reading
- Heating and Cooling With a Heat Pump: Natural Resources Canada: how air-source, ductless, ground-source and air-to-water heat pumps work in a Canadian climate, sizing, backup heat and balance points.
- Ontario Energy Board: electricity prices from November 1, 2026: the time-of-use, ultra-low overnight and tiered prices and the Ontario Electricity Rebate rate used in the operating cost arithmetic.
- Enbridge Gas Ontario rates: the current gas supply, transportation and delivery charges and the monthly customer charge.
