Heating With · Propane
Heating With Propane: The Costs Nobody Puts on the Tank
Propane heats a lot of rural Ontario well. It also charges you in ways that never show up in the per-litre price — and propane homes qualify for the biggest heat pump rebates in the province.
What does heating with propane actually cost, all-in?
More than the per-litre price suggests. Start with the fuel itself: propane is priced per litre, the price swings with the season — winter demand pushes it up exactly when you burn the most — and delivery isn't free: many suppliers add delivery or hazmat fees per fill. Then there's the tank. If you rent your tank, you're paying a monthly or annual rental indefinitely, and a rented tank usually locks you to that supplier — you can't shop the per-litre price around. If you own your tank, you skip the rental and can buy from anyone, but the tank's inspection and eventual replacement are yours. Either way, a propane home typically spends in the same band as oil — and the new system typically heats for roughly 45–55% of that cost.
Why do propane homes get the top rebate rate?
Because Ontario's Home Renovation Savings program pays for leaving expensive delivered fuels. Propane homes get the same rate as oil homes: $1,250 per ton, up to $7,500 — two and a half times the natural gas rate. Stack the new federal rebate — $2,000, or up to $10,000 for households below the median income, for installs on or after November 1, 2026 — and a typical 3-ton propane home sees $5,750 to $13,750 back. No energy assessment is required; a participating contractor files your Ontario pre-approval before install. The rebate guide has the full picture.
What are the switching paths for a propane home?
Two real options. Heat pump + propane backup: a high-efficiency propane furnace handles the coldest nights, when it's cheaper per hour than electric backup. You keep a tank and a fuel account, but your propane use collapses — the heat pump does most of the season's work, so fills become rare. This is the pragmatic pick if your electrical panel is small. Heat pump + electric backup: the clean exit — tank gone, rental gone, deliveries gone. Backup elements handle the deep-cold hours; they cost more per hour but run so few hours that the season's math still wins. The electric vs propane backup guide compares them head-to-head, including the tank rental question.
Does the tank rental change the decision?
It can. If you rent your tank and keep propane backup, the rental stays as long as the tank does — price that into the comparison. If you own your tank, propane backup carries no rental cost and gets more attractive. Either way, if you go fully electric, get the rental tank's removal and any contract terms in writing before the switch, so the last bill from your propane company is actually the last one.
Heating with propane — common questions
Will switching get me out of my propane contract?
Tank rental and supply agreements vary by supplier — some have terms or removal fees. Check yours before the install is booked; your advisor can help you read it. Owning your tank makes this a non-issue.
My propane also runs my stove and water heater. Can I still switch my heating?
Yes — and that's the case where keeping propane as backup fuel often makes the most sense, since the tank stays anyway. Your heating, which is the overwhelming majority of your propane use, moves to the heat pump.
How much propane will I still burn with a heat pump + propane backup?
A fraction of what you burn now — the furnace only fires below the system's balance point, a few dozen nights a year in this region. Many switched homes go from multiple fills a winter to one small top-up, or none in a mild year.
Propane homes: check your rebate
Top Ontario rate, federal rebate stacked, and a real choice on backup heat. See your number first.
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