Are heat pumps efficient for home heating?

Yes, heat pumps are highly efficient for home heating, offering significant energy savings and environmental benefits compared to traditional systems.

There are three types of heat pumps – Air-source heat pump (ASHP): This specifies the type of heat source being used (air); Ground-source heat pump (GSHP): This specifies the type of heat source being used (ground); Reversible heat pump: This emphasizes the ability to both heat and cool a space.

Here are some reasons why:

  1. Heat pumps move existing heat rather than having to produce heat from combustion like in a furnace. This makes them over 300% efficient or COPs (Coefficient of Performance) ranging from 3 to 4 – for every 1 unit of electricity used to power the heat pump, over 3 units of heat energy can be provided, compared to a gas boiler’s efficiency of around 0.9. This significantly lowers heating costs.
  2. Heat pumps provide both heating and air conditioning, doing double duty as a home’s HVAC system. Having one system for both functions increases efficiency.
  3. The operating costs of heating with an electric heat pump tend to be lower compared to alternative heating fuels whether that’s oil, propane, or natural gas depending on energy rates.
  4. Heat pump technology and efficiency, especially in cold weather operation, has improved greatly in recent years increasing their viability for home heating.
  5. Using a geothermal heat pump that transfers heat to/from the ground can be up to 400-600% efficient for heating, the most efficient option available.

While heat pumps work optimally in temperate climates, modern units combined with proper insulation and supplemental heating can make heat pumps an efficient primary home heating method in many areas. Their overall heating costs are competitive if not substantially lower than most alternatives.

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George Nicola

George is a seasoned interior designer and property marketing strategist with over 13 years of experience. He specializes in transforming properties into visually stunning spaces, helping clients recognize the potential and beauty in each property. With an impressive international client base of exciting projects throughout Europe and America.

TL;DR How Heat Pumps Efficiently Heat and Cool Homes?

A heat pump works by transferring heat between a building’s air and either the ground or outdoor air using an efficient refrigeration cycle. It moves heat from a cool space to a warm space by circulating refrigerant that absorbs or releases heat.

While heat pumps originated in the 1930s and 40s, they became popular options for whole-home heating and cooling in North America starting in the 1970s energy crisis when efficiency became more valued.

With variable speed compressors and improved cold weather capabilities, today’s heat pumps can operate below freezing. However, they work best above 20°F outdoor temperatures before needing supplemental heat.

Some key advantages of heat pumps are:

  • They provide both heating and cooling from one system.
  • They can be over 300% efficient by moving existing heat rather than converting it from a fuel like gas.
  • Heat pump systems tend to have lower operating costs than alternatives.

Some disadvantages are:

  • They do not produce heat as well in extremely cold climates. Additional backup heat may be needed.
  • Installation costs can be higher than some other heating system options.

Modern heat pumps can operate efficiently in cold climates by using variable speed compressors and advanced outdoor coils. However, their heating capacity decreases as outdoor temperatures drop below freezing.

Heat pumps require refrigerant to function. They use the refrigeration cycle to absorb heat at one place and release it another. So without refrigerant, a heat pump would not provide any heating or cooling.

Heat pumps are very efficient because they move existing heat rather than having to convert fuel to heat. By absorbing heat from one place and moving it elsewhere, they can provide over 3 units of heat energy for every 1 unit of electricity used. This makes their operating costs quite low.

How Heat Pumps Work

Heat pumps use electricity, which can be generated from renewable sources like solar or wind, significantly reducing their carbon footprint compared to fossil fuel-powered systems.

Forklift carrying a box of heat pumps.
Forklift carrying a box of heat pumps.

Air-source heat pumps transfer heat between indoor and outdoor air. 

They contain a refrigeration cycle with four key stages:

  1. Evaporation: In heating mode, refrigerant absorbs heat from outside air, evaporating into a gas in the outdoor coil.
  2. Compression: The compressor pressurizes the gas, concentrating the captured heat.
  3. Condensation: Hot pressurized gas condenses to liquid in the indoor coil, releasing concentrated heat indoors.
  4. Expansion: The refrigerant expands and cools before repeating.
  5. Evaporator: The evaporator, another coil (usually located indoors), absorbs heat from the indoor air, warming it up. Imagine it as the opposite of the collector, taking heat from the internal environment instead of the external.
  6. Cycle Repeats: The cooled refrigerant then travels back to the compressor, and the cycle starts all over again. This continuous loop efficiently transfers heat from the outdoor air to your home, even when the outside temperature is quite low.

In cooling, the cycle reverses, transferring heat from indoors to outside. Less electricity than the captured heat energy is required to run the compressor.

Ground-source (geothermal) heat pumps use piping buried underground instead of outdoor coils. Fluid circulating in these pipes absorbs and transfers heat between the earth and indoor space.

Dual source heat pumps tap into both ground and outdoor air, combining the sources’ heat transfer advantages. The piping loop connects into a common compressor with the air coils.

Ductless mini-split heat pumps distribute heating/cooling directly from an outdoor unit to an indoor space without ductwork. Multiple indoor wall-mounted units can connect to one outdoor compressor.

While system configurations vary, all pump ambient warmth rather than combust fuel for heating, achieving over 300% efficiency. Supplemental heat may still assist in extremely cold weather.

How Does a Heat Pump Look?

A heat pump system for heating and cooling consists of an outdoor unit which looks like an AC unit, which holds the compressor, condenser coil, and refrigerant lines connected to an indoor unit with a heat exchanger and blower fan that distributes air.

The key parts of a heat pump system are:

Outdoor Unit – Contains the compressor, fan, condenser coil and necessary refrigerant connections. This is often mistaken as the air conditioner.

Indoor Unit – Usually a furnace with a heat exchanger, blower fan and air filter. Some ductless systems have wall-mounted indoor units instead.

Thermostat – The user control device, increasingly wi-fi connected smart thermostats, to set temperatures and system modes.

Refrigerant Pipes – Copper tubing that allows refrigerant to flow between the indoor and outdoor units. This is sometimes thought to distribute air or water, but only refrigerant passes through.

Ductwork – Forced air systems distribute heated/cooled air from indoor units throughout homes using a duct system – commonly confused as carrying refrigerant rather than air.

Types of Heat Pumps

Heat pumps aren’t a one-size-fits-all solution. Choosing the right type depends on various factors like climate, budget, and your needs.

Men working on heat pumps in front of a house.
Men working on heat pumps in front of a house.

Air-Source Heat Pumps (ASHPs)

  • Energy Source: Outdoor air.
  • Pros: Most affordable option, easy installation, suitable for moderate climates.
  • Cons: Efficiency can dip in extreme temperatures, may require backup heating source in colder regions.


  • Split-system: Outdoor and indoor units connected by refrigerant lines.
  • Mini-split: Multiple indoor units with one outdoor unit, ideal for zone heating/cooling.
  • Solar assisted heat pumps – paired with solar panels
  • Hybrid heat pumps – utilize both air and ground sources
  • Air-to-air, cascaded, and exhaust air heat pumps: are all variations of air source units.

Ground-Source Heat Pumps (GSHPs):

  • Energy Source: Ground or water below the surface (geothermal energy).
  • Pros: Highly efficient year-round, less impacted by outdoor temperatures, environmentally friendly.
  • Cons: Higher upfront cost, installation requires trenching or drilling, may not be feasible everywhere.


  • Horizontal loop: Pipes buried shallowly in the ground.
  • Vertical loop: Pipes inserted deep into the ground.
  • Open loop: Uses well water as the heat source, requires specific water quality and permits.

Water-Source Heat Pumps (WSHPs):

  • Energy Source: Existing body of water, like a lake, pond, or well.
  • Pros: Similar efficiency to GSHPs, lower installation cost than GSHPs in suitable locations.
  • Cons: Requires access to a suitable water source, water quality and temperature fluctuations can affect efficiency.


  • Open loop: Similar to open loop GSHPs.
  • Closed loop: Uses a heat exchanger to transfer heat from the water without direct contact.

Choosing the Right Heat Pump:

Consider your climate, budget, available resources, and heating/cooling needs. Consult with qualified professionals to assess your specific situation and recommend the optimal type of heat pump for your home.

Remember, regardless of the type you choose, heat pumps offer a more sustainable and efficient alternative to traditional heating systems. Embrace the eco-friendly warmth!

Benefits of Using Heat Pumps

  1. Extreme cost efficiency – Heat pumps can provide over 3 times more energy for heating than they consume in electricity. This 300-600% efficiency results in lower utility costs.
  2. Dual heating and cooling – One heat pump system provides both functions, working as a central air conditioner in summer and heater in winter. Less equipment needed.
  3. Quiet comfort – Modern systems feature brushless motors and fans enabling quiet airflow. They provide consistent comfort without noise disruption.
  4. Zoning flexibility – Ductless mini-split heat pumps allow specific rooms to be targeted independently for heating or cooling without ductwork.
  5. Advanced controls – Programmable thermostats fine-tune temperatures hour-by-hour matching comfort needs through the day and night for greater efficiency.
  6. Safety – Unlike combustion based furnaces or boilers, heat pumps don’t directly burn gas or oil in the home reducing risks and need for venting.
  7. Improved Air Quality: Some heat pumps feature built-in air filtration systems, improving indoor air quality and reducing allergens.
  8. Lower Maintenance: Unlike furnaces or boilers, heat pumps have fewer moving parts, leading to less frequent and less expensive maintenance needs.
  9. Long Lifespan: With proper care and maintenance, heat pumps can last up to 15-20 years, offering a long-term investment.
  10. Reduced Emissions: Heat pumps primarily rely on electricity, which can be generated from renewable sources like solar or wind, significantly reducing their carbon footprint compared to fossil fuel-powered systems.
  11. Sustainable Choice: By using less electricity or natural gas, heat pumps contribute to a more sustainable energy future and combat climate change.
  12. Eco-Friendly Refrigerants: Modern heat pumps utilize environmentally friendly refrigerants with minimal impact on the ozone layer.
  13. Increased Home Value: Homes with energy-efficient features like heat pumps are often more attractive to potential buyers and can command higher resale values.

With both cost savings and comfort improvements, heat pumps are an appealing option modernizing both newly built and existing homes’ energy efficiency and heating solutions.

Heat Pump engineers standing outside of a house.
Heat Pump engineers standing outside of a house.

More benefits of thermal heat pumps:

  • Existing hot water or forced air radiators can often be used with a new heat pump system. The heat pump simply replaces the boiler or furnace while using the existing water or air distribution system.
  • A geothermal heat pump works by circulating liquid through pipes buried underground to transfer heat between the earth and a building. It uses the relatively constant temperature of the earth a few feet below the surface as a heat source in winter and a heat sink in summer.
  • Most air source heat pumps can provide efficient heating down to around 0°F (-18°C). However, below 25°F (-4°C), they begin to lose capacity and efficiency. The lowest temperature an air source heat pump can effectively operate at depends on its specific technology and construction, but most struggle below -10°F (-23°C).
  • While whole-home systems are most common, there are more compact heat pumps designed to condition smaller spaces like additions, garages, or workshops. Ductless mini-split heat pumps work well for zoning and heating/cooling isolated spaces.
  • Improving insulation, sealing ducts, positioning the outdoor unit in sunlight, using a programmable thermostat, and having yearly maintenance checks will help a heat pump work even better.
  • A dual-fuel system can be combined to use a heat pump paired with a propane furnace. The heat pump acts as the main heating source down to a set outdoor temperature, then the system automatically switches to propane heat when additional heating is needed in very cold weather.

Smart Home Integration

Modern heat pumps can be incorporated into whole-home smart environments for added automation and efficiency benefits. Through Wi-Fi connections and advanced smart thermostats, heat pump systems can provide:

  • Remote Monitoring – View real-time performance data and adjust temperatures from mobile devices or computers for greater control, awareness, and responsiveness.
  • Automated Scheduling – Create customized heating and cooling schedules tailored to your family’s routines and needs, automatically adjusting home temperatures hour-by-hour.
  • Usage Alerts – Get notified if unusual runtimes or inefficient operation are detected so proactive adjustments can be made to the system.
  • Predictive Optimization – Smart algorithms study environmental factors and usage patterns to optimize startup timing so that target home temperatures are reached exactly when needed.
  • Integration with Smart Lighting and Water Heating – Enable beneficial energy use synchronization between connected systems for greater efficiency.

This smart connectivity gives homeowners an enhanced level of insight into heat pump operation while also enabling automation that balances comfort with maximum energy savings throughout daily and seasonal heating/cooling cycles. Your HVAC technician can advise on smart system capabilities.

Ways to make a heat pump system work better?

A table comparing the different types of heat pump types.
A table comparing the different types of heat pump types.

Improving the building envelope and using the heat pump appropriately for the climate are key ways to enable a heat pump to work at peak efficiency. Regular maintenance is also essential.

  • Make sure outdoor unit coils are clean and free of debris, ice, or snow buildup
  • Seal ductwork to minimize air leaks
  • Insulate the building well including walls, attic, windows, and doors
  • Use a programmable thermostat to maximize efficiency
  • Position the outdoor unit out of cold winds and direct sunlight
  • Have a professional technician service the system yearly
  • If needed in very cold climates, install an auxiliary heat source like electric coils or a dual-fuel system

Top Heat Pump Types and Brands in 2024

Choosing the right heat pump depends on your specific needs and circumstances. Brand popularity and rankings can vary based on location, specific models, and individual preferences.

Here’s an overview of popular types and brands to consider:


Air-Source Heat Pumps (ASHPs): Most affordable and widely used, suitable for moderate climates. Brands:

  • Samsung EHS Monobloc (Best overall, efficiency, quiet operation)
  • Hitachi Yutaki M RASM-4VNE (Most efficient)
  • LG Therma V R32 Monobloc (Excellent cold climate performance)
  • Daikin Altherma (Best for colder climates)
  • Nibe F2040 (Best for small homes)

Ground-Source Heat Pumps (GSHPs): Highly efficient year-round, but have higher upfront costs. Brands:

  • Viessmann (Wide range of GSHP options, reliable)
  • Daikin (Advanced technology, energy-efficient)
  • Bosch (Durable and dependable)
  • WaterFurnace (Specializes in GSHPs, offers geothermal systems)
  • GeoStar (Leading manufacturer of GSHPs, innovative designs)

Water-Source Heat Pumps (WSHPs): Less common, require access to a suitable water source. Brands:

  • Stiebel Eltron (Renowned for quality and efficiency)
  • Carrier (Offers multiple water-source pump options)
  • Trane (Known for durability and performance)
  • ClimateMaster (Specializes in geothermal and water-source heat pumps)
  • Deschutes Industries (Custom water-source systems, strong warranties)

Additional Factors to Consider:

  • Climate: Your local climate significantly impacts heat pump performance and suitability.
  • Budget: Costs vary depending on type, brand, features, and installation.
  • Home size and needs: Choose a capacity that matches your heating and cooling demands.
  • Professional guidance: Consult qualified HVAC professionals for personalized recommendations.

How much does it cost on average a heat pump (by type)?

Overall for most homes, air-source heat pumps provide very good utility for both heating and cooling at the lowest upfront investment. This makes them the most broadly useful heat pump variety for homes needing upgraded HVAC systems. 

However in some regions, the higher install costs of ground-source units can pay off long-term via utility savings.

Here is a comparison of residential heat pump costs from most to least expensive along with their relative utility:

Most Useful & Expensive: Ground-source (Geothermal) heat pumps, with installed costs averaging $15,000-$36,000. They utilize stable underground temperatures for excellent efficiency. However high install costs mean longer payback periods.

Middle Usefulness & Cost: Water-source heat pumps at $13,000-$30,000 installed. They leverage water bodies for heating/cooling but need access to an underground well or surface water. Complexity raises costs.

Ductless Mini-Split Heat Pumps: Ductless mini-split systems are ideal for homes without existing ductwork or for adding heating and cooling to new additions or specific rooms. These systems consist of an outdoor unit connected to one or more indoor units, allowing for temperature control in specific zones or rooms. The average cost of a ductless mini-split system in Q4 2023 was $16,965 after incentives, with a wide range depending on the number of zones required. Small single-zone projects might have minimal out-of-pocket costs, while extensive multi-zone setups could exceed $65,000.

Cheapest option: Air-source heat pumps for $3,500-$7,500 installed. They transfer ambient outdoor air and are the most affordable option. Performance declines in extreme cold. Most cost effective for moderate climates. However, if you opt for a high-end brand, the cost may be closer to $7,000 to $11,000. The installation cost can significantly increase if your home does not currently have ductwork, with air duct installation costs ranging from $250 to $12,000, depending on the size of your home.

Specific model and features: Higher efficiency models and added features like dual-fuel capability or smart controls can increase the cost.

Local market and installation complexity: Labor costs and permit requirements can vary by region. Installing in remote areas or requiring extensive trenching for GSHPs can significantly increase the cost.

Size and capacity: Larger heat pumps suitable for bigger homes are naturally more expensive.

Government incentives and rebates: These can bring down the initial cost considerably. Check with your local authorities and utility companies for available programs.

Additional Considerations

  • Location and Climate: The local climate can influence the size and power output needed from your heat pump, potentially affecting the cost.
  • Removal of Old Unit: If replacing an old system, the cost to remove the old unit can range from $200 to $400 per hour.
  • Energy Efficiency: Higher efficiency units may cost more upfront but can provide significant savings on energy bills over time.
  • Incentives and Rebates: Federal, state, and local incentives can reduce the upfront cost of heat pump installations. For geothermal systems, the federal Residential Renewable Energy Tax Credit offers a tax credit equal to 30 percent of the total installed cost.

Heat Pump Installation and Maintenance

How to Choosing the Right Location for Installation?

Proper placement both outside and inside is key for heat pumps to operate efficiently. The ideal locations enable full airflow, protection from elements, and good heat transfer into living spaces. Considering long-term landscaping growth, roof runoff, noise, and visual impacts will lead to optimum mounting spots.

Outdoor Heat Pump Unit Location

  • Ensure at least 2-3 feet clearance on all sides for sufficient airflow and access. Avoid placing too close to walls or other obstructions.
  • Position in an area with some shade protection, avoiding direct sunlight which reduces efficiency. But don’t place under eaves where moisture can drip on it.
  • Pick a spot away from windows, patios, and neighboring properties to minimize noise disturbances.
  • Choose a location with proper drainage where condensate or defrost water can drain safely away and not pool around the unit.
  • Leave ample service access space around the unit for technicians to perform maintenance and repairs.
  • Check local regulations for placement distance from property lines or noise ordinances.
A truck with three types of heat pumps on it.
A truck with three types of heat pumps on it.

Indoor Heat Pump Unit Location

  • Mount centrally within the home for most even heating and cooling distribution through existing or new ductwork.
  • Place high on walls for best airflow without furniture blocks or dead space reducing performance.
  • Keep away from corners, air flow obstructions, door swings or storage areas.
  • Ensure the space can accommodate the indoor unit size without cramming.
  • Limit refrigerant line lengths to recommended distances for optimum efficiency.

Consulting HVAC professionals for site-specific placement recommendations can optimize system performance. And consider professional installation for proper integration with your home. Regular maintenance will keep a properly positioned system running efficiently for years.

How to Choosing the Right Location for Installation?

Properly maintaining a heat pump keeps it operating at peak efficiency for effective heating/cooling. Adhering to a consistent maintenance schedule can prevent costly heat pump repair and extend the life of your system. 

Seasonal Checkups:

Clean or replace air filters monthly – Dirty filters reduce airflow and efficiency.

  • Spring: Schedule a professional tune-up before the cooling season. During this service, the technician will clean the coils, inspect electrical connections, check refrigerant levels, and ensure everything is functioning optimally. Trim back encroaching plant growth around outdoor units.
  • Fall: Before the heating season, get another professional tune-up. This focuses on cleaning the outdoor unit, checking defrost mechanisms, and verifying heating operation. Clear debris and leaves from outdoor unit coils and fans seasonally. Ensure nothing obstructs airflow.

DIY Maintenance:

  • Visually check the refrigerant lines for damage or leaks. Have a technician repair any issues detected.
  • Flush the condensate drains to prevent clogging, doing this at the start and end of each season.
  • Arrange professional tune-ups before the heating and cooling seasons to clean, inspect, and service the entire system.
  • Check that air vents or registers aren’t blocked by objects impeding airflow.
  • Set the thermostat fan to “auto” allowing the unit to cycle on and off automatically as needed rather than continuously run.
  • Install a surge protector to defend against power spikes damaging the equipment.
  • Have a qualified technician service the heat pumps if any unusual noise, smell or performance change occurs.

Additional Tips:

  • Follow the manufacturer’s recommendations: Refer to your heat pump’s manual for specific maintenance guidelines and instructions.
  • Invest in a programmable thermostat: This allows for automatic temperature adjustments, optimizing energy usage and reducing wear and tear on the system.
  • Seal air leaks: Sealing air leaks around windows, doors, and ducts can improve your home’s overall energy efficiency and reduce the workload on your heat pump.
  • Address issues promptly: Don’t ignore any unusual noises, performance dips, or error messages. Promptly contact a qualified professional to diagnose and fix any problems before they worsen.
  • Bonus Tip: Consider enrolling in a maintenance plan offered by your HVAC provider. These plans often include annual tune-ups, discounted repairs, and priority service, further adding to your peace of mind and ensuring your heat pump stays in top shape.

Remember: Regular maintenance is an investment that pays off in the long run. By following these tips, you can ensure your heat pump delivers efficient comfort for years to come, saving you money and minimizing environmental impact.

Troubleshooting Common Issues

Do-It-Yourself Fixes

  • No airflow – Check all return vents for blockages, clean filters, remove debris blocking outdoor unit, and check circuit breakers
  • Frozen outdoor unit – Turn system off for a few hours to let ice melt, then clear snow/leaves so airflow resumes normally
  • Noisy unit – Check for debris that’s stuck and vibrating in outdoor unit fans, remove if found
  • Leaking condensate line – Clear blockage, check slope of drain line and refit if needed to carry water away properly

Professional Repairs Needed

  • Compressor not activating – The start capacitor, relay, or compressor motor itself likely needs replacement
  • Refrigerant leaks – Only certified HVAC technicians can detect leaks, recover refrigerant, and recharge the sealed system properly
  • Electrical control failure – If the defrost control board, reversing valve, or other key components malfunction, a technician must test and replace the faulty part
  • Blown fuse/tripped circuit breaker – Have an electrician inspect for any shorts in wiring and correct the issue
  • Incorrect thermostat wiring – Improper connections can prevent proper cycling. A technician can identify and remedy wiring problems
  • Major error codes – If the manual doesn’t offer solutions or the error code seems serious, seek professional help.
  • Defrost system problems – Improper defrosting can damage the system. Leave it to the professionals.
  • System performance decline – If your heat pump isn’t heating or cooling efficiently despite routine maintenance, a professional can diagnose and address the issue.

Heat Pump Energy Efficiency and Cost Savings

Comparing Energy Efficiency Ratings

When you’re considering a heat pump for your home, comparing energy efficiency ratings is crucial.

These ratings, such as the Seasonal Energy Efficiency Ratio (SEER) and Heating Seasonal Performance Factor (HSPF), provide insight into how effectively a unit converts energy into heating or cooling power. The higher the rating, the more efficient the heat pump.

A family sitting around a fireplace in a living room, radiating warmth and ambiance.
A family sitting around a fireplace in a living room, radiating warmth and ambiance.

To make an informed decision, consider the following steps:

  1. Look for the EnergyGuide label on each heat pump, which displays the efficiency ratings.
  2. Compare the SEER and HSPF ratings of different models to determine which offers the best efficiency for your climate.
  3. Remember that while higher-rated units may be more expensive upfront, they can lead to significant savings on your energy bills over time.

Calculating Potential Cost Savings

To calculate potential cost savings from installing a heat pump, review current energy bills to establish a heating/cooling cost baseline, research installation and operating costs for a new heat pump system, estimate efficiency improvements compared to your current system, and calculate projected annual utility cost savings from improved efficiency.

Additional potential savings from tax rebates, reduced maintenance, and system lifespan should be factored in as well when determining cost benefit analysis.

Consulting with HVAC contractors on projected utility costs with a new system can further refine cost saving estimates specific to your home. Maintenance requirements and lifespans for materials should be factored in as well.

Here are some tips for calculating the potential cost savings from installing a heat pump:

  1. Review current heating and cooling bills to establish a baseline for annual expenditures on energy to heat and cool your home. Natural gas, oil, propane, or electric bills can provide this.
  2. Research the average installation cost for a heat pump system in your area, taking into account your home’s heating/cooling needs. Also factor in any federal or local rebates available.
  3. Find data on the coefficient of performance (COP) for the type of heat pump system suited to your climate. The COP measures efficiency. The higher the number, the greater the efficiency and savings potential.
  4. Compare heat pump system specs to your current heating and cooling system. Estimate potential efficiency improvements. often between 20-40% for newer units.
  5. Calculate the approximate annual cost for electricity to run the new system using local electric rates along with the improved efficiency percentage.
  6. Compare the estimated yearly savings in fuel/electric costs from improved efficiency to the installation cost to determine simple payback period.
  7. Consider additional savings like potential tax rebates and reduced maintenance costs relative to older existing equipment.

Incentives for Energy-Efficient Systems

Investing in an energy-efficient heat pump system can be financially savvy, thanks to various incentives offered by governments and utility companies. These incentives are designed to offset the initial cost and encourage homeowners to make eco-friendly choices.

Federal Tax Credits – Heat pumps can qualify for certain amount of money in renewable energy tax credits. There are also special tax credits for the most efficient units. For example, the current tax credit for geothermal heat pumps in the USA is 26% of the cost of the system, up to a maximum of $2,000.

Utility Rebates – Many electric and gas utilities offer rebates for heat pumps, often $250-$500 per system. These incentives help offset upfront costs.

State & Local Incentives – Some states and municipalities have additional rebates, tax credits, or loan programs for high-efficiency heat pumps and weatherization upgrades. These can save you 10-30% on project costs.

Manufacturer Discounts – Many heat pump manufacturers provide special seasonal discounts or rebates on high-efficiency system models to make them more affordable.

Property Tax Exemptions – A few areas provide a property tax assessment exemption when you install an ENERGY STAR certified heating/cooling system. This lowers costs long-term.

Energy Mortgages/Loans – Special financing products feature lower interest rates or longer terms for the portion of a mortgage/loan funding energy-efficient home improvements like ductless heat pumps.


utilizing thermal energy exchange with the surrounding air, water, or ground. This allows heat pumps to transfer ambient heat rather than burning fuels to create heat.

In winter, heat pumps draw existing warmth from outdoor air or the ground, concentrating it and moving it indoors to comfortably heat living spaces. This process requires up to 75% less electricity than heating systems that create heat through combustion of oil, propane, or natural gas.

In summer, the cycle reverses as indoor heat gets transferred outdoors for cooler indoor comfort. This dual heating and cooling capacity in one integrated system increases efficiency further with versatile performance.

Because heat pumps leverage thermal energy for both heating and cooling, they reduce homes’ energy consumption, utility bills, and carbon footprint compared to conventional HVAC systems. With recent improvements, air source models can sufficiently heat homes even in colder climates down to below freezing temperatures.

For homeowners looking to save on heating expenses, increase renewable energy use, and reduce environmental impact, installing an efficient heat pump system checks all boxes as a green upgrade improving seasonal comfort and sustainability. The ability to cost-effectively harness natural thermal energy makes heat pumps a versatile solution improving affordability for homeowners while also conserving resources.