When a heating system fails, replacement is urgent and the decision gets made quickly. That urgency produces a common and expensive mistake: sizing the new system to the house as it is rather than as it could be.
Why the order matters financially
Heating equipment is sized to peak heat loss. A leaky house has high heat loss, so it gets a large system.
Insulate afterwards and you own a system oversized for the house — which costs more to buy, cycles inefficiently, and in the case of heat pumps runs meaningfully less efficiently at part load.
Insulate first and the same house needs a smaller, cheaper system that runs closer to its efficient range.
Why this year specifically
Running costs are rising. Dutch TTF futures have climbed roughly 120% since the start of 2026, and winter forecasts are moving toward an average near €60/MWh from €45/MWh, with some analysis suggesting over €100/MWh may be needed to divert flexible US LNG from Asia.
Storage is depleted, and drought and heat are curbing hydro and nuclear output while record temperatures raise demand.
An oversized system is a permanent tax on a rising input price.
When you cannot wait
Sometimes a system fails in November and there is no time for an envelope project. Two things still help:
Ask the installer to size for the insulated case and document what work that assumes. Some will do this and note the condition; it is a reasonable request.
Do the air sealing first anyway. It takes days, not weeks, and it is the cheapest part of the envelope work. Even a short delay to complete it changes the sizing calculation.
The material cost context
Renovation materials remain above pre-2020 levels due to supply-chain pressure and tariffs. Lumber, roofing and imported tile are up significantly, and cabinets, steel and appliances carry exposure — heating equipment sits in that last category.
Insulation materials and labour do not carry the same exposure, which is another reason the envelope work has become relatively better value.
Questions for the quote
What heat loss calculation was this sized on? A specific answer indicates it was calculated rather than estimated from floor area.
What happens to efficiency at part load? Particularly relevant for heat pumps.
Is the quote before or after HST? In Ontario 13% applies to labour and materials; permits add $400 to $2,000+.
The system you buy this winter will run for fifteen years at prices nobody can forecast. Sizing it for a house that leaks is the one part of that you control.
Sources
- Euronews — Europe’s gas prices have doubled
- CNBC — Europe’s gas storage and winter prices
- Reno Quotes — Canada renovation cost guide 2026