Electrification of commercial heating

Most Canadian commercial buildings are heated by natural gas, either through boilers serving hot water loops, rooftop units with gas heat sections, or make-up air units. Heating is usually the largest source of direct greenhouse gas emissions from these buildings. Electrification means replacing that combustion with electrically driven heating, most often heat pumps, so that emissions depend on the electricity grid rather than on burning fuel on site.

Electrification is driven by federal and provincial climate policy, municipal building performance standards, corporate carbon targets, and rising carbon pricing on fuel. Done well, it can cut emissions sharply. Done carelessly, it can raise operating costs, overload electrical services and leave occupants cold in a January cold snap. This guide covers the decisions that separate the two outcomes.

Why heat pumps, not resistance heat

Electric resistance heating converts electricity to heat at a coefficient of performance (COP) of 1. A heat pump moves heat from a source (outdoor air, ground or a water loop) and typically delivers two to four units of heat per unit of electricity, depending on source and supply temperatures. Because electricity usually costs several times more per unit of energy than natural gas in most provinces, resistance heating alone rarely makes economic sense at scale. Heat pumps close much of that cost gap.

Resistance heat still has a role as backup, for small loads, or for the coldest hours where a heat pump's output falls off.

The main technology routes

Many successful projects combine several of these, for example heat recovery for the base load, air-to-water heat pumps for most of the season, and electric or gas backup for extreme cold.

Cold climate realities

Air-source heat pump capacity and efficiency fall as outdoor temperature drops, just as the building's heat loss rises. Modern cold climate units continue to operate well below minus 20°C (minus 4°F), but at reduced capacity and COP. Design heating temperatures in Edmonton, Calgary and Winnipeg are around minus 30°C (minus 22°F) or colder per the NBC climatic data.

This leads to three common design strategies:

• Full electric with backup resistance: the heat pump is sized for most hours and electric resistance covers the remainder.
• Hybrid (dual fuel): the heat pump carries the load down to a balance or switchover temperature, and existing gas equipment takes over below it. This captures most of the emission reduction while avoiding the coldest, least efficient hours.
• Ground or water source: the source temperature is stable, so capacity does not collapse in winter.

The right balance point depends on utility rates, carbon pricing, emission targets and electrical capacity. See cold climate heat pumps for selection details.

Electrical service capacity

Electrical capacity is often the binding constraint. Replacing a gas boiler with heat pumps and backup resistance can add a large peak demand at exactly the time when the building's existing electrical load is also high.

Steps to evaluate it:

1. Review 12 months or more of interval electrical demand data to find actual peak demand, not just the nameplate service size.
2. Estimate the added heating demand at design conditions, including defrost and any backup resistance.
3. Apply the Canadian Electrical Code (CSA C22.1) demand calculation methods, as adopted by your province, to determine whether the service and distribution can carry the load.
4. Talk to the utility early. Service upgrades can involve transformer replacement and long lead times.
5. Look for ways to reduce peak: envelope improvements, heat recovery, thermal storage, demand limiting controls, or hybrid operation in the coldest hours.

Hot water temperature and distribution

Many existing hydronic systems were designed for supply water around 82°C (180°F). Most air-to-water heat pumps produce water efficiently at 45 to 55°C (113 to 131°F), with some refrigerants such as CO2 able to go higher for certain applications. Lowering supply temperature reduces the output of existing radiators, fan coils and heating coils.

Before electrifying a hydronic system, test whether the building can be heated at lower water temperatures. Many systems were oversized, and envelope improvements or ventilation heat recovery can reduce the load enough. Our guide to air-to-water heat pumps covers this in detail.

Operating cost and carbon

Operating cost depends on the ratio of electricity to gas prices, the seasonal COP achieved, demand charges and carbon pricing. Emissions depend on the provincial grid. In provinces with predominantly hydroelectric or nuclear generation, such as Quebec, British Columbia, Manitoba and Ontario, electrification reduces heating emissions dramatically. In provinces with more fossil-fuel generation, such as Alberta and Saskatchewan, the reduction is smaller today but grows as grids decarbonize.

An honest analysis models both cost and emissions hour by hour and includes demand charges, because peak winter demand can dominate the electricity bill.

Planning a phased transition

Electrification rarely happens in one step. A practical roadmap aligns with equipment end of life:

1. Reduce the load first: envelope repairs, air sealing, heat recovery on exhaust and ventilation, and controls tuning.
2. Lower system temperatures: test and reset hot water supply temperatures; identify terminal units that limit low-temperature operation.
3. Add heat pumps for the base load: often a heat recovery chiller or air-to-water heat pump alongside existing boilers.
4. Replace equipment at end of life with heat pumps rather than like-for-like gas units.
5. Retire or keep gas as backup once electrical capacity and performance are proven.

An energy audit is a sensible starting point for building that roadmap.

Frequently asked questions

Will electrification increase my energy bills?

It can, depending on local rates, the efficiency achieved and demand charges. Hybrid systems and load reduction measures often keep costs close to current levels while still cutting emissions substantially.

Can I keep my existing boilers?

Yes. Keeping boilers as backup or for peak loads is a common first stage. It reduces risk and avoids sizing heat pumps for the coldest hours.

Do I need refrigerant safety reviews?

For systems with large refrigerant charges in occupied spaces, such as VRF, CSA B52 limits apply. Air-to-water and ground-source systems often keep the refrigerant in a mechanical room or outdoors, which simplifies compliance.

Key takeaways

• Heat pumps, not resistance heat, are the backbone of cost-effective electrification.
• Cold climate capacity loss, backup strategy and balance point are central design choices on the Prairies.
• Electrical service capacity and utility upgrade timelines are often the limiting factor; check them early.
• Existing hydronic systems usually need lower supply temperatures, so test them before committing.
• A phased plan tied to equipment end of life spreads cost and reduces risk.