Air Source Heat Pump vs. Geothermal: Which Is Best In Canada?

Heat pump problems
Heat pump problems

When Canadian winters bring temperatures well below freezing, choosing the right heating system becomes crucial for both comfort and cost-effectiveness. While most homes rely on natural gas furnaces, oil heating, or electric baseboard systems, rising energy costs are driving homeowners to explore more efficient alternatives.

The geothermal vs. heat pump debate has become one of the most important decisions when upgrading your heating system. Understanding which option works best requires careful consideration of your property, budget, and climate needs. 

This guide will help you make an informed decision about which heat pump technology is right for your Canadian home.

Understanding Heat Pumps

Heat pumps transfer heat from one place to another rather than generating it through combustion. In winter, they extract heat and move it indoors. In summer, they reverse the process to cool your home.

The key difference between an air source heat pump and a geothermal heat pump lies in where they source their heat. Air source heat pumps extract heat from outdoor air, while geothermal (ground-source) heat pumps draw geothermal heat from the earth below the frost line, where temperatures remain relatively constant year-round.

Air Source Heat Pumps

How They Work

An air source heat pump uses refrigerant to absorb heat from outdoor air and compresses it to a higher temperature before releasing it inside your home. Modern cold-climate heat pumps (built within the past 10-15 years) can extract heat from air temperatures as low as -30°C, making them viable options even during harsh Canadian winters.

These systems consist of an outdoor unit (which looks similar to a central air conditioner) and an indoor unit that distributes warm air through your existing ductwork or through ductless mini-split heat pump heads mounted on walls. The outdoor unit must be raised on a stand to keep the unit above the snow level for defrosting.

Energy Efficiency in Cold Climates

Today’s cold-climate air source heat pumps represent a significant improvement over older models. Advanced technology allows them to maintain efficiency even when temperatures drop well below zero. 

However, their efficiency does decrease as outdoor temperatures fall, meaning they work harder (and use more electricity) during the coldest periods.

Most modern units maintain a coefficient of performance (COP) of 2.0 or higher even at -15°C, meaning an air source heat pump will produce twice as much heat energy as the electrical energy they consume.

Installation & Maintenance Considerations

Installation of an air source heat pump is relatively straightforward and less invasive than geothermal systems. The outdoor unit needs adequate clearance for airflow and should be elevated above expected snow levels. 

Many Canadian installations place units on platforms or wall brackets to prevent snow burial. Understanding common heat pump problems can help you identify issues early and maintain optimal performance.

Geothermal (Ground Source) Heat Pumps 

How They Work

Geothermal heat pumps circulate fluid through pipes buried underground, where temperatures remain stable between 4°C and 10°C year-round. This consistent heat source makes geothermal systems extremely energy-efficient, as they don’t have to work against extreme temperature differences.

The underground loop system can be installed horizontally (requiring significant yard space) or vertically (requiring deep drilling but less surface area). The heat pump unit inside your home extracts warmth from the circulating fluid and distributes it through your ductwork.

Energy Efficiency in Cold Climates

Geothermal systems excel in cold climates because ground temperatures remain constant regardless of how cold the air gets. This stability means their efficiency doesn’t fluctuate with weather changes, providing consistent heating performance throughout winter.

With typical COP values between 3.8 and 5.0, geothermal heat pumps are among the most energy-efficient heating options available. They can reduce heating costs by 10-20% compared to a best-in-class air-source heat pump and maintain this efficiency regardless of outdoor temperature extremes. Geothermal heat pumps do NOT require defrosting due to the warm source temperatures.

Installation & Maintenance Considerations

Installing a geothermal system requires substantial upfront investment and planning. Horizontal installations need approximately 1,500 to 3,000 square feet of yard space, while vertical systems require drilling 150 to 400 feet deep. 

Vertical loops require professional drilling equipment, and horizontal loops require a high hoe to dig trenches about 5’ deep and 5’ wide.

The underground loop system, once installed, requires virtually no maintenance and can last 50+ years. Property considerations include sufficient land area, proper soil conditions, drilling equipment access, and local regulations

Think of the geothermal loop as a propane tank that is ALWAYS full and never has to be refilled.

Geothermal vs Air Source: Key Differences

Efficiency

Air source heat pumps maintain good efficiency in moderate cold, but will need supplementary heat during extreme cold snaps below -30°C.

Geothermal systems maintain consistent efficiency regardless of outdoor temperatures. The stable ground temperature ensures reliable heating performance, whether it’s -5°C or -35°C outside.

Cost

Air source heat pumps have lower upfront costs, with installation expenses varying based on system size and complexity. Homes with existing ductwork require less investment since the distribution system is already in place.

Geothermal systems require significantly higher upfront investment—typically three to five times more than air-source systems. Drilling costs represent the largest expense, particularly for vertical loop installations that require boring deep into the ground.

However, operational costs tell a different story. While air source heat pumps are more affordable compared to traditional heating methods, geothermal systems typically cost 65% less to operate than electric furnaces. 

Over 20 years, geothermal systems often recover their higher initial costs through energy savings. Now that the loop is installed, it can be connected and reused for several generations of indoor geothermal units. 

In fact, we have one loop with its 3rd geothermal heat pump connected to it after close to 40 years of operation!

Environmental Impact

Both systems significantly reduce greenhouse gas emissions compared to fossil fuel heating. Air source heat pumps typically reduce carbon footprint by 30-50%, while geothermal systems can cut emissions by 50-70%. The exact environmental benefit depends on your regional electricity grid’s energy sources.

Installation Considerations

Air source systems work for virtually any property type, including homes with small yards, urban properties, or rental units. Installation takes 1-3 days and causes minimal property disruption.

Geothermal systems require specific property characteristics: 1-2 acres for horizontal loops (or drilling access for vertical systems), suitable soil conditions, proper distance from wells and septic systems, and heavy equipment access.

Government Incentives and Rebates

Canadian homeowners may qualify for federal and provincial rebates when installing heat pumps, though specific programs and amounts vary significantly by region.

Ontario residents can access the Home Renovation Savings Program. Other provinces operate their own incentive programs with different rebate structures and eligibility requirements. 

To explore available incentives:

Program requirements, rebate amounts, and eligibility criteria change regularly, so verify current details before planning your installation.

Our Recommendations

Choosing between an air source heat pump and a geothermal heat pump depends on your specific circumstances, property characteristics, and long-term goals.

Choose an air source heat pump if you:

Choose geothermal systems if you:

Smart purchases will ALWAYS include emergency back-up heat added to any heat pump. When a heat pump fails, it generally is NOT as fast to repair, and parts are often not as readily available as the more common gas furnace.

Ready to explore heat pump options for your home? Request a quote from ATEL Air. 

Our team has been installing and servicing heat pumps in Eastern Ontario since the 1970s, giving us the experience to recommend the right solution for your specific needs!

Request A Quote Today!