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A heat pump costs more to install than a gas furnace: $10,000 to $19,000 (RBC, May 2024) vs $4,000 to $6,500 (RBC, May 2024). Alberta has no provincial heat pump rebate. Some cities finance upgrades through the Clean Energy Improvement Program, a loan repaid on your property tax bill. The federal National Heat Pump Rebate ($2,000, or up to $10,000 for households below the median income) was announced on October 8, 2026 but isn't open yet.
Key facts
| Heat pump | Gas furnace | |
|---|---|---|
| Typical installed cost | $10,000 to $19,000 (RBC, May 2024) | $4,000 to $6,500 (RBC, May 2024) |
| Heats and cools | Yes, one system does both | Heats only; AC is separate |
| Rebates in Alberta | 4 current programs on file | None on file |
| Federal rebate | $2,000, or up to $10,000 for households below the median income (not open yet) | None |
| Running costs | Over its life, a heat pump with electric backup costs about 13% less on average than a gas furnace plus AC in the cities studied (Canadian Climate Institute). | Gas and delivery charges, plus electricity for AC |
| Main downside | Higher upfront cost; output drops in deep cold | No cooling, and few or no rebates |
Heat pump vs gas furnace in Alberta: installed costs from named sources, rebates from our program database
Program data last verified
RebateHub, “Is a heat pump worth it in Alberta? Heat pump vs furnace”, https://rebatehub.ca/compare/heat-pump-vs-furnace-alberta#key-facts (last verified October 12, 2026).
Add up your heat pump rebates
Pick how your home is heated now. The receipt adds up every open program in Alberta, with the federal rebate on its own line until it opens.
Your rebate stack
Alberta · Heat pumps
2 programs
Could add up to
if you qualify for each program
$0
+ $2,000 when the National Heat Pump Rebate opens
Verified against official sources ·
How it adds up
- National Heat Pump Rebate+ $2,000
Cold-climate air-source heat pump (other eligible homeowners) · Rebate · Not open yet · not in the total
- Banff Post-Purchase Rebate Programup to $750
Heat pump (on NRCan list) · Rebate · Banff only
City loans in 3 Alberta cities · not counted
Program maximums for an air-source heat pump. Ground-source systems can get more. Your amount depends on your home and the equipment. City-only programs aren’t counted in the total.
1 income-qualified program hidden.
Upfront cost
These are typical installed prices before rebates and tax. No neutral source publishes a province-by-province range, so these are Canada-wide figures; installer estimates are labelled.
| System | Typical installed cost | Source |
|---|---|---|
| Cold-climate air-source heat pump, whole home | $10,000 to $19,000 | RBC (citing CBC), May 2024 |
| Natural gas furnace, installed | $4,000 to $6,500 | RBC (citing FurnacePrices.ca), May 2024 |
| High-efficiency natural gas furnace | $4,000 to $7,000 | RenoQuotes, Sept 2026 (installer estimate) |
| Dual-fuel system (heat pump plus furnace) | $9,000 to $18,000 | RenoQuotes, Sept 2026 (installer estimate) |
Typical installed costs, heat pump vs gas furnace
Typical ranges before rebates and tax, not quotes. Your price depends on the home, the ductwork and the equipment. Ask for at least two written quotes.
A heat pump replaces both the furnace and the air conditioner, so compare it with the price of both if you would replace your AC too. Put your own quote into the rebate finder to see what you'd pay after rebates.
Rebates in Alberta: heat pump vs furnace
Alberta has no provincial heat pump rebate. Some cities finance upgrades through the Clean Energy Improvement Program, a loan repaid on your property tax bill. The federal National Heat Pump Rebate ($2,000, or up to $10,000 for households below the median income) was announced on October 8, 2026 but isn't open yet.
- Last verified October 12, 2026OpenFederalCanada-wide
Canada Greener Homes Affordability Program
Federally funded, no-cost home energy upgrades for low- and median-income homeowners and tenants. You apply through your province's or utility's partner program, not through Ottawa.
Upgrades at no cost to eligible households
Free upgrade - Last verified October 12, 2026OpenMunicipalBanff
Banff Post-Purchase Rebate Program
Banff residents can claim rebates after buying heat pumps ($750), heat pump water heaters ($500), windows (up to $200 each), efficient appliances and EnerGuide evaluations (up to $500).
$100–$750 per item; up to $500 for an energy audit
Rebate - Last verified October 12, 2026UpcomingFederalCanada-wide
National Heat Pump Rebate
A new federal rebate announced on October 8, 2026 that will pay $2,000 toward an eligible cold-climate air-source heat pump, or up to $10,000 for households below the median income. Applications are not open yet.
$2,000
max rebate
Up to $10,000 if income-qualified
Rebate
We have no current rebate for a new gas furnace in Alberta on file. See every furnace and boiler program in Alberta.
Running costs
Running costs
Over its life, a heat pump with electric backup costs about 13% less on average than a gas furnace plus AC in the cities studied (Canadian Climate Institute). Read the report
Averages from the study, not a promise for your home.
Running costs swing with gas and electricity prices, your home's insulation and how cold your winters get. Air sealing and insulation lower both bills: see insulation rebates.
Which one should you choose?
- Choose a heat pump if you also want cooling, your AC is old too, or your home is heated by electricity, oil or propane. Those homes usually get the biggest rebates.
- Choose a furnace if your ducts and gas line are in place, you need the lowest upfront price this week, and no heat pump rebate applies to you.
- Choose both (dual fuel) if you want a backup for the coldest days. See dual fuel vs all electric.
Can you use both?
Yes. A heat pump can be added to an existing gas furnace, which then runs only when it's very cold. Rules on keeping a furnace differ by program, so read the rules on the program page before you book. If your furnace has failed, the furnace-died guide covers the order to do things in so you don't lose a rebate.
Honest downsides of each
Heat pump: costs more upfront, its output falls as the temperature drops (most rebate programs require a cold-climate model for that reason), and an older electrical panel may need an upgrade. Rebates often require a registered or participating installer and, for some programs, approval before installation.
Gas furnace: heats only, so you still need an air conditioner for summer. Almost no program pays for one, and you keep paying the fixed monthly charges on a gas bill as well as an electricity bill.
Frequently asked questions
Sources
Last updated . Amounts and rules come from the official program pages below. If something has changed, please tell us.
- 1Clean Energy Improvement Program (Alberta) · Alberta Municipalities, on behalf of participating municipalitiesceip.abmunis.ca
- 2City of Calgary Residential Clean Energy Improvement Program · City of Calgarycalgary.ca
- 3City of Edmonton Residential Clean Energy Improvement Program · City of Edmontonedmonton.ca
- 4National Heat Pump Rebate · Government of Canadacanada.ca