A dual-fuel heat pump system pairs an air source heat pump with a gas furnace as a backup heat source. It's one of the most practical configurations for Ontario homeowners who want heat pump efficiency without fully committing to electric-only heating — and it's eligible for HRS Program rebates.
How a dual-fuel system operates
In a dual-fuel system, the heat pump handles all heating demand above a set temperature threshold (called the balance point or switchover temperature). Below that threshold, the gas furnace takes over. The switchover is automatic and controlled by a thermostat or control board that monitors outdoor temperature.
The logic behind this configuration: heat pumps are most efficient at moderate temperatures (above -5°C to 0°C), where their COP might be 2.5–3.5. As outdoor temperature drops, COP declines. At some point, running the gas furnace becomes more cost-effective per unit of delivered heat than running the heat pump at reduced efficiency. The balance point is set at approximately this crossover temperature.
Setting the balance point correctly
The balance point in most Ontario dual-fuel systems is set somewhere between -10°C and -15°C. Below that temperature, the gas furnace handles heating. Above it, the heat pump handles heating. The specific setting depends on local electricity rates, gas rates, and the heat pump's rated performance at various temperatures.
As electricity rates rise or fall relative to gas, the optimal balance point changes. Some newer control systems can automatically optimize the switchover based on real-time energy prices.
The dual-fuel case in Ontario's rate environment
Ontario's electricity rates make dual-fuel a practical middle ground. A fully electric heat pump is most cost-effective when electricity is cheap relative to gas. Where rates are closer to parity — as in Ontario — keeping the gas furnace for the coldest hours reduces operating cost while the heat pump delivers efficiency gains during the much larger number of moderate-temperature heating hours.
Installation requirements
Dual-fuel systems require existing forced-air ductwork (or installation of ductwork), an existing gas furnace (or new installation), and a compatible heat pump. Most modern heat pumps from major manufacturers support dual-fuel configurations with the appropriate thermostat and control system. The heat pump and furnace must be correctly matched — a contractor should size the heat pump based on the home's heating load, not simply on the existing furnace capacity.
Rebate eligibility
Dual-fuel heat pump installations can qualify for the HRS Program rebate of up to $4,000 for the heat pump component, provided the equipment meets current efficiency specifications and the pre-retrofit audit was completed before installation. The gas furnace component does not qualify for a separate heat pump rebate, but may qualify for Enbridge high-efficiency furnace rebates if it's a new installation.
We map both rebate streams as part of the upgrade planning process and ensure the pre-retrofit audit sequence is in place before any equipment purchase.
Who dual-fuel makes sense for
- Homeowners with existing gas forced-air systems and functional, well-maintained furnaces — where replacing the entire system with an electric-only heat pump isn't warranted
- Homeowners who want the majority of heat pump efficiency gains without the risk of electric-only performance at extreme temperatures
- Those with homes that aren't yet optimized for all-electric heating (under-insulated, significant air leakage) — dual-fuel reduces the cost of those shoulder hours while longer-term envelope work proceeds