Everything You Need to Know About Heat Pumps

The term “heat pump” refers to any system that can extract heat from a colder space and transfer it to a warmer one. For example, refrigerators use heat pumps to remove heat from inside the fridge and expel it into your kitchen. Air conditioners use heat pumps to remove heat from inside the house and dump it outside. In this guide, the phrase “heat pump” refers specifically to HVAC equipment that is capable of both heating and cooling the air inside a home. In other words, we’re talking about air conditioners that can also run in reverse, pulling heat from outside on a winter day and pumping it inside.

We’ve created this guide because when it comes to getting off fossil fuels, it does matter what you replace them with. Climate advocates tout electric heat pumps because they can create two to three times more heat per unit of energy than other heating equipment. Electric resistance heating, by contrast, is extremely wasteful, and if people start installing those systems en masse, that could actually increase emissions in the near term and make it more difficult to decarbonize the economy in the long term. By getting a heat pump, you won’t just be cutting emissions, you’ll be reducing the cost of cleaning up the electric grid because we’ll need less electricity overall.

That said, a poorly designed or installed system can negate many of the benefits that heat pumps have to offer. Whether you’re reading because you want to cut emissions, or save money on energy, or take advantage of the steady, quiet comfort heat pumps provide, it’s essential to do your homework and find a good contractor to work with. In this guide, we’ll cover how to know when it’s the right time to get heat pumps, the basics of understanding what your options are, common misconceptions about heat pumps, how to find and vet contractors, and more.

THE EXPERT PANEL

Larry Waters is the founder and president of Electrify My Home, a heating and air conditioning contractor in Northern California that specializes in heat pumps. Waters has worked in the HVAC industry for more than 40 years.

D.R. Richardson is the co-founder of Elephant Energy, a Boulder, Colorado-based startup that helps homeowners in Colorado and Massachusetts electrify by using building science and proprietary software to ensure good system design, and by managing all aspects of the project.

Jake Marinis the senior emerging opportunities manager for the Vermont Energy Investment Corporation, a nonprofit that runs the state’s energy efficiency programs. Marin ran VEIC’s HVAC program for nearly 8 years and was recently given a “Champion of Energy Efficiency” award for his pioneering work bringing heat pumps to Vermont.

OVERVIEW OF THE PROCESS

• Figure out if and when it is the right time for you to get a heat pump, and consider weatherizing your home first.
  
• Think about your budget and goals.
• Learn about incentives.
• Find at least three heat pump-proficient contractors and get quotes.
• Consider trade-offs on system design, cost, and efficiency and choose an installer.
• Installer will take care of permitting and inspections. Then you can schedule installation.

THE BASICS

There are many, many kinds of electric heat pumps used for space heating and cooling. At a high level, there are two main categories that homeowners can typically choose from:

• Air source systems pull heat out of the ambient air. These are the most common.

• Geothermal or ground-source systems pull heat out of the ground. These are much more efficient than air-source versions, especially when providing heating in the coldest northern climates, but are more expensive to install.

Within each of these are a handful of installation options:

• Ducted systems have a similar footprint to a furnace or central air conditioner, including one big piece of equipment in the basement, attic, or crawlspace that forces hot or cold air into ducts distributed throughout your house and another big piece of equipment that sits outside. They typically have better air filtration capabilities than ductless systems.

• Ductless systems, often referred to as mini-splits or multi-splits, also have both indoor and outdoor components, but the indoor units are designed to cool a single room or zone of the house. The indoor unit can be a wall-mounted “cassette,” or it can be hidden away in the wall or ceiling and force air through a vent.

• There are also slim duct or compact ducted systems, which take a little bit from both approaches. The indoor unit can be hidden in the ceiling or floor, and they utilize a small duct system to heat/cool two or three adjacent rooms.

• Air to water heat pumps heat or chill water and circulate it through a building. These are common in Europe but less so in the U.S. Marin said they can be a good option for some homes that already have water-based HVAC systems like radiant floors, ceilings, or walls; hydronic fan coils; or panel radiators. Unfortunately, the technology can’t currently integrate into homes that use cast-iron radiators.

The above designs aren’t mutually exclusive. You can install a system that’s fully ducted, fully ductless, or a combination of both. You can also combine a heat pump system with a fuel-burning furnace or boiler, known as a dual-fuel system. If aesthetics are important to you, there are also companies like Quilt that offer versions that can better integrate into the look of your home.

Heat pumps also come in models with different “speeds” or “stages”:

• Single speed or single stage heat pumps are always either on at full capacity or off. These are the cheapest heat pumps on the market, but also the worst when it comes to efficiency and may cost you more in the long run. These are typically not eligible for incentive programs, either.

• By contrast, variable speed heat pumps (also known as inverter heat pumps) can run at lower speeds and are much more efficient. Rather than cycling on, blasting hot or cold air to meet the temperature you want, and then cycling off, variable speed heat pumps modulate their capacity continuously and can run at very slow speeds to maintain the set temperature. They are the most expensive, but also the most efficient models. All three of our experts prefer variable speed systems.

• In between, there are also two-stage and multistage versions that can operate at a range of fixed speeds.

There are also some technical specifications to be aware of, such as seasonal efficiency ratings:

• SEER2 is the Seasonal Energy Efficiency Ratio (or Rating), which is generally a measure of the efficiency of the device when it’s in cooling mode. (The 2 refers to new federal standards that went into effect in 2023.) A higher number = more efficient.

• HSPF2 is the Heating Seasonal Performance Factor, which is generally a measure of the efficiency of the device when it’s in heating mode. Again, a higher number = more efficient.

The highest rated SEER2 device may have a lower HSPF2 rating, while the highest rated HSPF2 device may have a lower SEER2 rating.

• If you live in a climate with long, cold winters, you should prioritize a higher HSPF2.
• Prioritize SEER2 if you live somewhere with long, hot summers and milder winters.

Finally, heat pumps also come in many different sizes. Having a properly sized system is one of the most important factors for ensuring your heat pumps run efficiently and last a long time.

A good contractor will be able to walk you through different system designs and equipment options to find the answer that’s best suited to your house, your goals, and your budget.

“There’s a lot of companies out there that offer just what they have in the catalog and their salespeople can’t sell anything outside of that,” Waters told me. “That means the customer is going to get matched with that cookie cutter option if they go with that company. So how to choose a contractor is one of the most important things.”

FREQUENTLY ASKED QUESTIONS

1. How does having a heat pump differ from a furnace or boiler?

Many people are used to setting their HVAC systems to different temperatures at different times of day — one temp for the morning and evening, another for when they leave for work, and another for bedtime. This makes sense with many furnaces and air conditioners because they’re usually designed to cycle on, blast hot or cold air at full capacity until they achieve the temperature you want, and then turn off, so turning down the system when you’re not home can save a lot of energy. But the most efficient “variable speed” heat pumps work differently — they use a lot of energy to reach a certain temperature, but once they hit it, they sip small amounts of energy to maintain it. Experts say a “set it and forget it” approach will give you the most efficient performance and the most consistent energy bills.

“Don’t worry about the number,” says Marin. “Just find your comfortable temperature, and then leave it alone, forget it’s even there.”

2. Do I need to keep my boiler or furnace as a back-up system?

This topic can be divisive among HVAC experts, but in most of the continental U.S., you should be able to find a heat pump solution that will heat your home efficiently on the coldest winter days. The key is that the system has to be sized correctly. Richardson’s company, Elephant Energy, works in Colorado, where he says they’ve had two years in a row with days that got down to -13 degrees Fahrenheit, “and our fleet of hundreds of heat pumps have cranked out heat to keep homes nice and warm on those coldest days.”

There still may be scenarios where you want to keep your furnace as a back-up, even if it’s not strictly necessary.

• Maybe you don’t want to spend extra on a heat pump that’s rated for the coldest temps, so you keep your other system to kick on when the mercury drops below a certain level.

• Maybe you live in a place where gas is currently much cheaper than electricity. With a dual-fuel system you can reduce your gas use and your emissions without relying solely on electricity. In the future, if gas prices go up or electricity prices come down, you can always change the temperature at which the system switches over to use more of one and less of the other.

• Maybe you haven’t weatherized your house and aren’t ready to do so yet, but you do really want or need a heat pump. In this case, you can talk to your contractor about getting a variable speed heat pump sized to what they anticipate your home’s load will be once it is weatherized in the future. That means it will technically be undersized in the near term, but if you keep your existing furnace or boiler, it can make up the difference in the meantime. This way, after you weatherize, you can get rid of the back-up fuel system and rely fully on the heat pump. It “might buy you the flexibility to do things in a different order,” says Marin.

3. Will a heat pump help me save money?

If you’re switching from fuel oil, propane, or electric resistance heating, you’re pretty much guaranteed to save money on your bills with heat pumps. But if you’re switching from natural gas, it really depends on where you live.

Richardson says that for a lot of his customers in Colorado, making the switch from gas to inverter heat pumps is cost neutral — they end up paying a bit more for heating in the winter but less for cooling in the summer, since the heat pump is often more efficient than whatever air conditioning they were replacing. At the same time, those who don't have air conditioning to start with could end up paying a bit more year-round.

BEFORE YOU GET STARTED

1. Is it the right time to get heat pumps? Here are a few scenarios to consider.

Do you…

• Have a relatively new (less-than-10-year-old) heating and/or cooling system in your house?

Short answer: Hold off on a heat pump, invest in weatherization.

Long answer: You may have arrived at this guide because you’re interested in decarbonizing your home, but if you have a relatively new heating and/or cooling system, it could actually be worse, emissions-wise, to replace it, due to the embedded carbon that went into manufacturing that equipment. Unless you’re really desperate to replace your existing system for comfort or financial reasons (if you have electric resistance heaters, for example, switching to heat pumps could save you a lot of money, since they use about a third of the electricity), we recommend getting a bit more life out of it first.

In the meantime, put your enthusiasm for decarbonization into making your home more efficient. Insulating and air sealing your home before you get heat pumps will help you save money in the near term and get you the best results from heat pumps later on.

• Have a relatively new heating system, but an older (or non-existent) air conditioner?

Short answer: Consider a dual fuel system

Long answer: If you really need a new air conditioning system but your heater still has a lot of life left in it, consider installing a heat pump to work alongside your existing furnace or boiler. That way, you’ll get efficient cooling capacity that will save you money in the summer, and you’ll also be able to cut down on your fossil fuel consumption in the winter. You can set the heat pump to warm your home until it gets down to a certain temperature outside, at which point your furnace or boiler will kick in. (Many heat pump models can operate in very cold temperatures, so having a backup heating system like this is not necessary, but it may be a good intermediate step in certain cases.)

• Have a furnace or boiler that’s more than 10 years old?

Short answer: It’s the perfect time to think about heat pumps!

Long answer: HVAC equipment typically lasts for 15 to 20 years, so 10 years is probably the earliest you would want to start thinking about a replacement. It’s probably safe to wait a few years longer, but you definitely don’t want to wait until your existing system breaks to start your heat pump journey. A heat pump retrofit can be a months-long process, from finding contractors, to evaluating quotes, to refining your plan, to getting permits and scheduling the work. If you’re in an emergency situation where your boiler broke and you really need heat, you could be forced to settle for a less-than-ideal solution. At the very least, start your research now and consider weatherization upgrades.

• Have one room or area of your house that’s particularly hot or cold?

Short answer: Get a mini-split!

Long answer: Ductless mini-split heat pumps are a no-brainer to provide heating and cooling to a single room or zone. They can be very affordable — and in some cases free — with rebates and tax credits. If you want to retrofit the rest of your home to use heat pumps down the line, this will help you get familiar with the technology and will not preclude you from adding more later — though it is helpful to tell your contractor that now so they can take it into account.

2. Make a budget

Heat pumps can be a major investment. If you just want to add heating or cooling capacity to one or two rooms, it can cost $5,000 to $7,000 per room, on average, before incentives, Richardson told me. A whole-home solution averages $20,000 to $30,000 before incentives, but depending on the home and the system design can go much higher.

3. Think about your goals

Do you have some rooms that are hotter in the summer or colder in the winter than others and you want to make your home more comfortable overall? Or is your goal to get better air filtration and ventilation? Or do you simply want to get off fossil fuels? It will be helpful to think through what you want to achieve and communicate that to your contractor so they can take that into account when they design your system.

4. Learn about incentives

The federal government offers a 30% tax credit for heat pumps, up to $2,000, not including labor, for certain energy efficient models. (Note that you can only get the full tax credit if you have $2,000 or more in tax liability the year you install the heat pumps.) The credit can’t be rolled over to the next tax year, but you can claim it in multiple years. Your state energy office, city, or utility may offer additional tax credits or rebates.

It’s important to learn about what’s available in your area before reaching out to contractors because some rebate programs require you to work only with approved partners. Also, the contractors you reach out to might not always be up to date on the latest incentive programs, so it’s a good idea to do some independent research and make sure you find someone who knows how to help you take advantage. There is, unfortunately, not yet any single directory where you can enter your zip code and find out about every possible rebate opportunity everywhere in the country, so it’s best to check multiple sources of information:

• First, check your state energy office’s website. Many states are in the process of revamping or expanding their heat pump rebate programs thanks to new federal funding.
• If you live in a major city, check with your city’s energy, sustainability, or buildings department.
• The EPA’s Energy Star site has a rebate finder where you can enter your zip code and learn about state or utility-run incentives.
• Also try checking your utility’s website.
• Some equipment manufacturers, like Mitsubishi, have rebate finders.
• Rewiring America has an incentive calculator.

FINDING A CONTRACTOR

As with all home renovation projects, we strongly recommend getting at least threequotes from different contractors.

Heat pumps are common in some parts of the country, but in others it might be difficult to find a contractor who really knows their stuff. Dip your toes in a heat pump Reddit forum and you’ll find scores of homeowners asking what to do after a contractor told them that heat pumps don’t work and they should just stick with gas. Here are a few strategies for finding high quality heat pump contractors, in order of what we recommend:

• Do a search for companies in your area who specialize in “building electrification” or “home decarbonization.” There are some HVAC companies, like Waters’, that have made electrification their focus, and they are more likely to be up to date on the latest technologies and training. There are also startups like Elephant whose entire business model is based on helping homeowners manage these projects, and will match you with pre-vetted local contractors.
  
• Look at the leading heat pump manufacturers’ directories of approved contractors. For example, Mitsubishi’s directory of “independent Diamond contractors” are HVAC pros that have received extensive training on the equipment and working with someone in this network can extend your equipment warranty. (Other leading brands of inverter-based systems include Daikin and Fujitsu.)
  
• Do you know any friends, family, or neighbors that have heat pumps? Ask them if they were happy with their experience. Which companies did they talk to? Who did they decide to work with and why? If you don’t know anyone who has done a heat pump retrofit, look for electrification Facebook groups or heat pump Reddit threads, where participants may have recommendations for your area.
• The Building Performance Institute is an accreditation group that certifies companies, energy auditors, and technicians in the latest building science. You can search for certified professionals in your area using BPI’s online directory.
  
• Check if your state energy office or utility has an online directory of heat pump installers. Many rebate programs also require you to work with approved partner contractors.
• Try using EnergySage, which will have you enter your address and then source quotes for you from installers that serve your area. (Note: This service is not available everywhere.)

How to Vet Contractors

Finding the right contractor is probably the most important decision you’ll make in this entire process, and it’s not uncommon to get quotes with wildly different recommendations. Here are some questions you can ask to help you get a sense of who really knows what they are talking about and is willing to go the whole nine yards to make sure you get a properly designed system:

1. Will you do a “Manual J” load calculation to determine how much air and energy I need in each room?

Manual J is a formula that helps a contractor identify the right size HVAC system for your home. It requires taking detailed measurements throughout the building, inspecting your home’s insulation and other elements that will affect airflow and heat retention, and performing tests such as the “blower door” to assess how leaky your building’s envelope is. If you’re interested in using your ductwork or installing new ductwork, they should also perform a “Manual D” calculation. Waters told me that despite these calculations being industry standards, very few contractors actually go through the trouble of doing them. “What this does, it tells us exactly what size system I need for heating and cooling, and exactly how much air goes into each room,” he said.

Richards agreed, adding that you may want to ask what technology they use to size the system. “You need somebody who has a technology-driven tool that can actually measure the heating and cooling requirements of your home,” he says. “Are you doing a true Manual J, or are you sort of sticking your finger up in the air?”

2. Do you install more than one brand of heat pump? How many heat pump installations have you done?

If your contractor only works with one brand of equipment, you’re more likely to get a solution that’s convenient for them rather than one that’s custom designed for you.

3. Will you take a comprehensive look at my ductwork? Do you recommend new registers?

Waters told me the registers — the vents that release air into a given room — are critical for occupant comfort. If your existing ductwork is designed to distribute air from a furnace, your registers may be designed to push air into the middle of the room. But with heat pumps, you want the air either pushed up toward the ceiling if the vents are down low or across the ceiling if they are up high, so that the house doesn’t feel drafty and you get proper circulation.

4. Will you evaluate my electrical system for my home’s future electrification needs?

If you’re starting with heat pumps but you eventually want to electrify your stove, your clothes dryer, or your car, your home may need an electric panel upgrade or an electric service upgrade from the utility. What you don’t want is to put in heat pumps that eat up the rest of your home’s capacity and then have to deal with pricey upgrades down the line.

5. Are you BPI and/or NATE certified?

The Building Performance Institute and North American Technician Excellence are two organizations that train and certify contractors, auditors, and technicians in the latest building science and best practices. A certification doesn’t guarantee you’ve found the right contractor — it could mean they know a lot about installing heat pumps but still don’t know much about the models that work in the coldest climates, for instance. But it’s a helpful data point that shows they are investing in training.

WHAT’S NEXT?

After you’ve found a contractor or company to work with, settled on a system design, and secured financing, your installer is going to need to secure permits for the work. Then you’ll need to schedule the installation, which, depending on how busy your contractor is, can take several weeks to several months. The actual work should take one to three days, depending on how complicated it is.

Also — talk to your contractor about maintenance. Be sure to clean the filters regularly and do anything else they recommend to get the best performance and longest life out of your equipment.

ENJOY THE MIRACLE OF HEAT EXCHANGE!