What Is a Heat Pump?

By Michael Thomas

What Is a Heat Pump?

Electric heat pumps are home appliances that can both heat and cool a home. They can replace both a traditional air conditioner and a home heating system like a furnace, boiler, or inefficient baseboard heat

The main advantage of an electric heat pump compared to other HVAC systems is their efficiency. Because of the genius way they work, heat pumps are 2-3 times more efficient than traditional heating systems. 

According to our recent analysis, the average homeowner in the United States can save $667 per year by switching to a heat pump. Homeowners making the switch from electric baseboards, electric furnaces, fuel oil, or propane can see savings closer to $1,000 per year. 

Because they don’t use fossil fuels, electric heat pumps are also the most environmentally friendly heating and cooling option out there. 

At this point you might be wondering: How can one machine replace both an air conditioner and a furnace? 

At the simplest level, heat pumps use electricity to move heat from one place to another. In cooling mode, a heat pump moves the heat inside your home to the outside, leaving your home cooler. 

how a heat pump works in cooling mode illustration

This is no different than how your refrigerator or air conditioner works. These appliances pump heat out of an insulated space, leaving it cooler inside. 

But heat pumps also work in cold climates. So how do these things work on a cold day?

The short answer is they basically go into reverse-mode and pump heat energy from the outside air into your home.

how a heat pump works in heating mode illustration

That might seem a bit counterintuitive. After all, how can something move heat from the outside air when it’s 20 degrees outside? But remember, heat is just energy. And there is energy in the air all the way down to absolute zero, which is negative 456 degrees F. 

To learn more about how heat pumps transfer energy inside and outside your home, check out our article on how heat pumps work.

Pros of heat pumps

Energy savings

Standard heating systems like furnaces and boilers create heat by burning fossil fuels or using inefficient electric resistance. Heat pumps, by comparison, move heat in much the same way that refrigerators do. As a result they use much less energy. 

Heat pumps — especially mini-split systems — also typically have a much higher SEER rating than traditional air conditioners, meaning in cooling mode they run more efficiently.

Utility bill savings

As we mentioned earlier, the average homeowner can save $667 per year switching to a heat pump. And homeowners switching from inefficient systems that run on fuel oil, propane, or traditional electric resistance (like baseboard heat or electric furnaces) can save closer to $1,000 per year. 

So while heat pumps cost more upfront, their savings can often pay themselves off within 8-12 years. 

More comfortable

In addition to saving you money, heat pumps can make your home more comfortable. 

On a hot, humid day heat pumps act like whole-home dehumidifiers, gradually taking moisture out of the air. Even if it isn’t hot — like on a humid fall day, for example — you can run your heat pump as a dehumidifier and keep the temperature at 70 degrees.

In addition to that, many heat pumps are “variable-speed,” which means they provide a more consistent temperature than “single-stage” furnaces or air conditioners. 

chart showing variable-speed vs. single-stage temperature swings

Better for the environment

Unlike traditional furnaces and boilers, heat pumps run on electricity. That means that when paired with a renewable energy source like rooftop or community solar, they heat your home without heating the planet. 

Compared to other electric heating systems, like baseboard heaters or electric furnaces, heat pumps are much more energy efficient. And compared to your average air conditioner, most heat pumps, especially mini-splits, have much higher SEER ratings meaning that in cooling mode they’ll use less energy.

No ducts required

Many homes don’t have ducts, making it tricky to install air conditioning. But ductless heat pumps—also called mini-splits—don’t require ducts. They also look and function a lot better than window air conditioners.

illustration showing heat pump without ducts

Cons of heat pumps

Higher upfront cost

The biggest drawback of heat pumps is their higher upfront cost. Whereas a cheap air conditioning system or furnace can cost you less than $5,000, the average heat pump installation is about $14,000. 

Part of the reason for this is that you’re paying for something that can replace both your heating and cooling system. If you compare a heat pump to a furnace and AC combo, it’s actually a similar price. 

Many heat pumps also use much more advanced technology than cheaper heating and cooling systems, like variable-speed inverters, 20+ SEER ratings, and zone controls. 

But we get it. No one likes forking up more cash, especially when replacing something that broke or wore out. Fortunately, many states and utilities offer rebates and incentives, which help bring down the cost. 

Electrical requirements

Another drawback of heat pumps is their higher electrical setup requirements. If you are currently using a fossil fuel heating system that runs on natural gas, fuel oil, or propane, you may need to upgrade your electrical panel. 

But even if an HVAC tech tells you that you need an upgraded panel, it’s worth double-checking. We’ve heard many stories of one installer quoting $5,000 in necessary electrical work, only for another to find a work-around that costs more like $200.

Lower performance in extreme cold

Many HVAC installers will tell you that heat pumps don’t work below 30 or 40 degrees Fahrenheit. As we covered in another article, this is false. Heat pumps work in cold climates

But, with that said, if you live in Alaska or North Dakota, a heat pump might not save you as much money, at least at today’s fossil fuel prices. That’s because as the temperature drops, a heat pump’s efficiency goes down. 

If you live in a poorly insulated home in a climate where the temperature regularly stays below 10 degrees, a dual-fuel system is probably better than a stand-alone heat pump. The heat pump can still be your air conditioning and milder winter heat, and leave the coldest days to the furnace.

Frequently asked questions

Are heat pumps noisy? 

A common myth of a heat pump is that they are louder than other heating and cooling systems. This isn’t true. 

Heat pumps generally run at about 40-50 decibels, which is about the same as a quiet dishwasher. This is no different than a furnace or traditional air conditioner. 

Isn’t heating with electricity expensive?

Traditional electric heating systems like electric furnaces and baseboards are inefficient, that’s for sure. But heat pumps are in a league of their own in terms of efficiency. 

Heat pumps use advanced technology to use 3-4 times less electricity than conventional heating systems. This is why heat pumps can save many homeowners so much money. Compared to fuel oil, propane, and electric resistance heat, heat pumps use far less energy and cost much less to operate. 

Is a heat pump more efficient than a traditional air conditioner?

Assuming a heat pump and an air conditioner have the same SEER rating, they will use the same amount of electricity each year to cool your home. 

But many heat pumps come in higher-SEER models than the typical air conditioner. And unlike central AC, if you opt for a ductless mini-split, you can cool only the rooms you use. These two advantages make most heat pumps more efficient than standard AC systems. 

Check out our heat pumps vs. AC article to learn more about the differences.

Do heat pumps work in cold weather?

As we mentioned above, a common myth is that heat pumps don’t work in cold climates. This is absolutely not true. Heat pumps work down to temperatures as low as negative 25 fahrenheit. 

Check out this article for more: Do heat pumps work in cold weather?

What size heat pump should I get?

We have a whole heat pump sizing guide to answer this question. But the short answer is that you should get an energy audit, or Manual J load test, to figure out what capacity heat pump your home needs. 

It’s tempting to look for simple per-square-foot rules of thumb. But every home is different. A $200 energy audit is definitely worth the money. 

Are heat pumps actually better for the environment?

Here’s a common question we hear: “If a heat pump runs on electricity and our grid runs on fossil fuels, then is a heat pump actually better for the planet?”

The short answer is yes. First, heat pumps are far more energy efficient than other heating systems. So even if they aren’t paired with renewable energy, they produce less emissions. Second, heat pumps are the only efficient option that can be paired with renewable energy like rooftop or community solar. 

So today heat pumps are better for the environment than any other system. And with each new solar panel and wind turbine that goes up, that advantage grows. 

Another common question is whether the leaked emissions from hydrofluorocarbons (HFCs) inside heat pumps (and air conditioners) offset the carbon dioxide reductions. We wondered the same thing for a long time. Fortunately, in March 2022 a group of researchers put the question to rest: On the whole, heat pumps are better for the environment than any other heating and cooling system.

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