The Short Answer
In the Lower Mainland in 2026, a modern heat pump and a 96% efficient gas furnace cost about the same to run: roughly $550 to $700 a year in heating energy for a typical detached home. That is a big change from a few years ago. It is mostly because BC’s consumer carbon tax on natural gas ended in April 2025, which made gas cheaper.
So the decision is no longer mainly about running costs. It comes down to four things:
- Upfront cost: furnaces are cheaper to install, but heat pumps get rebates.
- Cooling: a heat pump is also your air conditioner. A furnace isn’t.
- Climate: coastal winters suit heat pumps perfectly, while the colder Fraser Valley pushes toward cold-climate models or dual-fuel.
- What you’re replacing: if you have electric baseboards or an old 80% furnace, a heat pump wins clearly.
Running Costs: The Actual Numbers
To compare fairly, we used one example home: a detached Lower Mainland house that needs about 50 GJ (13,900 kWh) of delivered heat a year. That’s typical for a 2,000-2,500 sq ft home with average insulation. Your numbers will scale up or down with your home, but the ratios hold.
Rates used (mid-2026):
- FortisBC natural gas (Mainland): about $12.60 per GJ in variable charges (delivery $8.469 + storage and transport $2.472 + cost of gas $1.660), plus a basic charge of about $0.42/day. See FortisBC residential rates.
- BC Hydro electricity: 14.08¢ per kWh, the Step 2 rate. Heating load sits on top of your home’s base electricity use, so in winter most heating kWh land in Step 2. Using the Step 2 rate is the honest comparison.
| Heating system | Efficiency | Energy used | Annual heating cost |
|---|---|---|---|
| Electric baseboards / electric furnace | 100% (COP 1.0) | 13,900 kWh | ~$1,955 |
| Old gas furnace | 80% AFUE | 62.5 GJ | ~$790 |
| New gas furnace | 96% AFUE | 52 GJ | ~$655 |
| Ducted heat pump (standard) | Seasonal COP ~3.0 | 4,630 kWh | ~$650 |
| Cold-climate variable-speed heat pump | Seasonal COP ~3.5 | 3,970 kWh | ~$560 |
| Dual-fuel (heat pump + 96% furnace backup) | Mixed | Mostly electric | ~$560 - $620 |
What this table tells you:
- Heat pump vs new furnace: roughly a tie. A good variable-speed heat pump edges ahead by about $100 a year.
- Heat pump vs electric baseboards: the heat pump saves about $1,300 to $1,400 a year. That is the single biggest win in BC home heating.
- Heat pump vs an old 80% furnace: the heat pump saves about $140 to $230 a year.
- Going fully electric: if a heat pump lets you disconnect gas entirely (no gas stove, water heater or fireplace), you also drop the FortisBC basic charge of about $155 a year.
A heat pump’s efficiency depends on the outdoor temperature. It is most efficient in mild weather, which is most of a Lower Mainland winter, and less efficient on the coldest days. The seasonal COP figures above are realistic averages for coastal BC, not lab maximums.
Upfront Cost and Rebates
| Gas furnace | Ducted heat pump | Dual-fuel | |
|---|---|---|---|
| Typical installed cost (before rebates) | $4,000 - $8,000 | $8,000 - $15,000 | $10,000 - $18,000 |
| Rebates | None for a furnace on its own | CleanBC: up to $13,000 ducted, income-qualified (gas furnace removed) | FortisBC, starting Oct. 15, 2026: up to $4,000 (up to $8,000 income-qualified), replacing a gas furnace 15+ years old |
| Provides air conditioning | No | Yes | Yes |
| Typical lifespan | 15 - 20+ years | 15 - 20 years | 15 - 20 years |
Rebates change the math, if you qualify. Under the CleanBC Better Homes Energy Savings Program, income-qualified households switching from gas to a ducted heat pump can receive up to $13,000 (Income Level 1), $7,000 (Level 2) or $3,500 (Level 3), and up to $16,500 for a combined space and water heat pump. The gas furnace has to be removed, backup heat must be electric or wood, and the home’s assessed value must be under the program cap. BC Hydro offers separate rebates for homes heated with electricity.
Dual fuel has its own rebate again. Starting Oct. 15, 2026, FortisBC gas customers who replace a gas furnace that’s at least 15 years old with a qualifying dual fuel system (new furnace plus heat pump, switchover set at 5°C or lower in the Lower Mainland) can get up to $4,000, or up to $8,000 if income-qualified. That makes keeping gas as backup a rebate-friendly option for the first time in a while. You can receive one primary heating rebate per home, so it’s the FortisBC dual fuel rebate or a CleanBC heat pump rebate, not both. A gas furnace on its own still gets no rebate.
For a household that qualifies for a large rebate, a heat pump can end up costing the same or less upfront than a new furnace. For a household that qualifies for little or nothing, the furnace is cheaper upfront by several thousand dollars. For a full furnace price breakdown, see our furnace replacement cost guide.
These rebates require installation by a contractor listed with the Home Performance Contractor Network (our technicians have completed the FortisBC dual fuel training), and rules change during the year, so confirm eligibility on FortisBC’s rebates page or Better Homes BC before you sign.
Comfort and Cooling
Heat pumps deliver steady, lower-temperature heat over longer cycles. Variable-speed models run almost continuously at low output, which keeps temperatures very even. In summer, the same system is your central air conditioner. After the 2021 heat dome and the hot summers since, cooling has become a major reason Lower Mainland homeowners choose heat pumps.
Gas furnaces blow hotter air in shorter bursts. Some people prefer that “warm air from the vent” feel. Two-stage and modulating furnaces narrow the gap by running longer on low fire. A furnace provides no cooling, so you would need a separate AC unit, typically $4,000 to $10,000 installed.
Climate: Where a Heat Pump Alone Is Enough
Modern variable-speed heat pumps keep producing useful heat down to -15°C to -25°C, depending on the model. The question is how efficient they are on your coldest days, and whether you want backup.
- Above 0°C (most Lower Mainland winter hours): heat pumps are at their best, typically 3-4 times more efficient than electric resistance heat.
- -5°C to 0°C: still very efficient on any modern unit.
- Below -10°C: standard units lose capacity, while cold-climate units keep going. Backup heat (electric strips or a gas furnace) covers the gap on the few days a year it’s needed.
Coastal Lower Mainland vs. the Fraser Valley
Vancouver, Richmond, White Rock, Delta and the North Shore. The coastal climate is close to ideal for heat pumps. Temperatures rarely fall below about -5°C, and only for a few days in a typical winter. A properly sized heat pump with electric backup strips handles the whole year comfortably. For most Richmond and Vancouver homes, a standalone ducted or ductless heat pump is the simplest and greenest choice, and keeping gas only makes sense if you have other gas appliances you love.
Abbotsford, Chilliwack, Mission and Hope. The eastern Fraser Valley gets colder and windier. Arctic outflow winds through the Fraser Canyon can push Abbotsford and Chilliwack to -10°C or lower for several days, and Hope gets colder still. Here we usually recommend a cold-climate heat pump rated for full capacity well below -15°C, or a dual-fuel system where a gas or propane furnace takes over below a set outdoor temperature. Rural properties on propane often see the biggest savings from adding a heat pump, because propane costs considerably more per unit of heat than natural gas.
Surrey, Langley, Coquitlam and Maple Ridge sit in between. A good variable-speed heat pump handles most homes on its own. Dual-fuel is a reasonable choice if you already have a newer furnace that can stay as backup.
Which Should You Choose?
| Your situation | Best fit |
|---|---|
| You have electric baseboards or an electric furnace | Heat pump (biggest savings, BC Hydro rebates) |
| You want air conditioning | Heat pump or dual-fuel |
| You qualify for income-tested CleanBC rebates | Heat pump |
| Your furnace is old (80% or less) and failing | Heat pump or dual-fuel |
| Tight upfront budget, no rebate eligibility, no interest in cooling | New 96% gas furnace |
| Fraser Valley, propane, or you want gas as backup | Dual-fuel or cold-climate heat pump |
| Your gas furnace is 15+ years old | Dual-fuel (FortisBC rebate up to $4,000 starting Oct. 15, 2026) or a heat pump (CleanBC) |
| Your furnace is under 10 years old and works fine | Add a heat pump to make it dual-fuel (no rebate for keeping the existing furnace) |
Bottom Line
At 2026 rates in the Lower Mainland, a heat pump and a new high-efficiency gas furnace cost about the same to heat your home. A heat pump wins clearly against electric baseboards and old furnaces, adds air conditioning, and produces far lower emissions on BC Hydro’s mostly hydroelectric grid. A furnace wins on upfront cost if you don’t qualify for rebates and don’t need cooling. And if your gas furnace is 15+ years old, a dual fuel system with FortisBC’s rebate, starting Oct. 15, 2026, gives you both.
For most coastal homes we recommend a heat pump. For the colder Fraser Valley, a cold-climate heat pump or dual-fuel system gives you efficiency without worrying about the coldest week of the year.
Want both options priced side by side for your home? Call 604-991-4894 or send us a message. We install heat pumps and furnaces across the Lower Mainland and Fraser Valley, and we’ll check which rebates you qualify for as part of the quote.
Frequently Asked Questions
In the Lower Mainland in 2026, a modern heat pump and a 96% efficient gas furnace cost roughly the same to run - about $550 to $700 a year in heating energy for a typical detached home. A heat pump is much cheaper to run than electric baseboards or an old 80% furnace. The bigger differences are upfront cost, rebates, and the fact that a heat pump also provides air conditioning.
Yes. Coastal Lower Mainland cities like Vancouver, Richmond and White Rock rarely drop below about -5°C, and modern variable-speed heat pumps keep heating efficiently well below that. In the Fraser Valley, where outflow winds can push Abbotsford and Chilliwack to -10°C or lower for a few days, a cold-climate heat pump or a dual-fuel system with a gas furnace backup is the safer choice.
A gas furnace is cheaper upfront: typically $4,000 to $8,000 installed in the Lower Mainland. A ducted heat pump typically costs $8,000 to $15,000 before rebates, depending on the system and whether ductwork needs work. Income-qualified CleanBC rebates of up to $13,000 for a ducted system (when the gas furnace is removed) can close most or all of that gap. Starting Oct. 15, 2026, a dual fuel system that replaces a gas furnace 15+ years old can get up to $4,000 from FortisBC (up to $8,000 if income-qualified). A gas furnace on its own gets no rebate.
A dual-fuel system pairs an air-source heat pump with a gas furnace. The heat pump handles cooling and most of the heating, and the furnace takes over only on the coldest days below a set outdoor temperature (the balance point). It is a common choice in the Fraser Valley and for homeowners who want to keep gas as backup. Starting Oct. 15, 2026, FortisBC pays up to $4,000 (up to $8,000 if income-qualified) for a qualifying dual fuel system that replaces a gas furnace at least 15 years old, with the switchover set at 5°C or lower in the Lower Mainland. Tank propane homes can use CleanBC's dual fuel rebate instead.
A heat pump usually makes sense if you want air conditioning, qualify for CleanBC rebates, have electric baseboards or an old low-efficiency furnace, or want to cut emissions. A new high-efficiency furnace makes sense if your budget is tight upfront and you don't want cooling. Dual-fuel is the middle path, and starting Oct. 15, 2026 it has its own FortisBC rebate of up to $4,000 when it replaces a gas furnace 15+ years old.
A heat pump, by a wide margin. About 98% of BC Hydro's electricity comes from clean or renewable sources, mostly hydro. A heat pump running on BC Hydro power produces a small fraction of the emissions of a natural gas furnace heating the same home.
