Everything You Need to Know Before Buying a Heat Pump

Everything You Need to Know Before Buying a Heat Pump

In this article we’ll cover everything you need to know before switching from traditional heating and cooling (like furnaces and air conditioners) to a heat pump.

After reading this guide you may be interested in our more in-depth heat pump sizing and heat pump savings articles. And if you’re doing a remodel and want to find other places to save energy and money, we recommend looking into a heat pump water heater and switching to LED lighting as a part of this project.

We should also address one of the worst myths about heat pumps and say upfront that heat pumps work in cold climates (more on that below).

Why switch to a heat pump?

It’s easy to take the temperature in your house for granted—you expect to be warm when it’s cold out and cool when it’s hot out. But creating comfortable living spaces takes a massive amount of energy. In terms of overall energy use, heating alone used 43% of all residential energy.

Why? Because most heat sources are powered by inefficient natural gas, propane, and other fossil fuels.

Switching to electricity to power your home’s heating and cooling is a great way to be more energy efficient—and save on your personal energy costs. As we covered in this heat pump savings, many homeowners can save $500-1,000 per year and cut their carbon footprint by 5 tons. 

The best way to switch to electric heating and cooling is by using a heat pump. Heat pumps heat and cool more efficiently than an electric furnace and air conditioning combo, providing the equivalent temperature control at up to one-quarter of the energy use.

In this article, we’ll talk about what a heat pump is, how it works, and how to pick the right one for your home. We’ll also look at the upfront costs and long-term savings you might see if you convert to a heat pump.

Benefits of a heat pump

There are three main benefits of switching to a heat pump.

Energy savings

Standard heating and cooling devices, like an electric furnace and an air conditioner, create and move heat. Heat pumps skip the creating part—they just have to move the heat. That means they use much less energy. That’s what makes them a perfect compliment to other energy savings projects like switching to LED lights or a hybrid water heater.

Cost savings

On average, you can expect converting to a heat pump to pay itself off in roughly 8 years, which means that, over the 10-20-year expected lifespan of most heat pumps, you’ll definitely save money. You can read more about heat pump savings here.

Ease of installation

Because it just uses refrigerant to transfer the heat, you only need to install copper pipes and wires between each side of the heat pump. This means you can install heating and cooling into homes where it’s otherwise expensive or impossible for another type of system to be installed (e.g., older homes that would require you to install ducts).

How does a heat pump work?

In terms of what’s going on inside the machine, it’s a little more complicated. Each part of the pump serves two functions: a condenser and an evaporator. Here’s the general process:

  1. Inside the pump, the heat in the evaporator area turns the liquid refrigerant (the stuff that cools things down) into vapor.
  2. The heat pump then compresses this vapor and moves it to the condenser area.
  3. The heat created by vaporizing and compressing the gas is released, and the refrigerant once again becomes a liquid.
  4. This liquid expands as it warms, and it’s released back into the evaporator area by a valve.

Each side of a heat pump (the one outdoors and the one indoors) can act as an evaporator and a condenser—that’s why a heat pump can both heat and cool your home.

And it works no matter the relative temperature. For example, in the winter, it might be colder outside your house than inside, but the heat pump can still move heat from the colder area (outside) to the warmer area (inside). Having said that, heat pumps do lose some efficiency when it gets below freezing outside. The water in the air is a great conductor for heat, and when it freezes, it can’t be used as easily to get the heat from the cold area. It still works, just not as efficiently.

Types of heat pumps

Heat pumps are pretty simple machines, but they’re designed in a few different ways. There are four main differences among heat pumps:

  • How it sources outside heat
  • How its compressor works
  • Whether or not it requires ducts
  • How it’s installed

Heat source types

Air source heat pump

The most common source for heat pumps is just the air outside your house. One side of the heat pump is inside your home, while the other is open to the air outside.

This is going to be the cheapest type of heat pump to purchase and install—it can be bought off the shelf, compared to the more bespoke sources. It also provides the best cooling potential because it’s most efficient when the air outside is very warm. (Likewise, efficiency for this type of heat pump is decreased when the air outside is below freezing.)

Water source heat pump

Instead of using the air to collect or dispose of heat, water source heat pumps use a body of water (like a lake, river, or stream). Because they require an easily accessible water source near the home, this type of heat pump is least common.

Ground source heat pump (aka geothermal heat pump)

You might have heard ground source heat pumps referred to as geothermal heat pumps. They use the constant ambient temperature of the earth to heat or cool your home. They’re by far the most efficient and most effective year-round, but they have the highest installation costs of any heat pump, often have to be specially designed for your home, and are reliant on your local soil and geological conditions.

Compressor types

Single stage

Single stage compressors only have two modes: on and off.

When it’s on, this type of heat pump operates at its maximum capability regardless of whether that’s needed. Because of that, these types of heat pumps are generally cheaper and less efficient, and often will have trouble dehumidifying a home.

Dual stage

This type of compressor allows the heat pump to have two operating states (and it changes automatically between the two).

The higher state operates at the heat pump’s maximum capability; the lower state operates at a more efficient but less capable level. This type of heat pump is more expensive than a single stage, but it’s better for milder climates where a heat pump rarely needs to operate at its maximum.

Variable stage

A variable stage pump is able to increase or decrease its output in small increments. Basically, it reaches the temperature you set the thermostat to and then uses the lowest power setting to maintain that temperature.

Because it’s able to operate only at the capability needed in the moment, this type of heat pump is the most efficient and reduces wear on the system as whole.

The downside is that this type of compressor is more expensive upfront than the others.

Duct types

Ducted heat pump

Ducted heat pumps have or use ducts in order to centrally heat or cool the home. They’re best used in homes with existing ventilation ducts (like if you already have central air) because that means they’ll be cheaper to install.

Ductless heat pump

In a ductless heat pump, the heating and cooling is often centralized to a few heating/cooling units placed around the home, where they can flow to the rest of the house. It’s more expensive to install, but can be installed in homes without ducts.

Combination heat pump

Also called short-run ducting, this type of heat pump uses centrally controlled ducts for part of the house and ductless units where there are no ducts.

Installation types

Split system

This is the most common type of heat pump—and often the most efficient. Each side of the heat pump is in a separate location: one outside and one inside.

Packaged system

With a packaged heat pump, both sides of the pump are within the outside machine, much like a common air conditioner, and it uses a fan to move air between the pump and the home. It’s more expensive than split systems for the same efficiency. That means you’d only want a packaged system if you have space concerns and wouldn’t have room for the inside unit.

What to look for in a heat pump

When picking out a heat pump, you’ll want to research these three things:

  • Efficiency and performance
  • Manufacturer
  • Unit and installation cost

Efficiency and performance

There are three main measurements of efficiency used with heat pumps:

  • Energy Efficiency Ratio (EER)
  • Seasonal Energy Efficiency Ratio (SEER)
  • Heating Seasonal Performance Factor (HSPF)

In order to pick the correct unit, you’ll probably want to focus on either SEER or HSPF. If you live in an area where you’ll be cooling more often than you’re heating, it makes sense to try to find a heat pump with higher SEER values than others and focus less on the HSPF value. If you live in an area where you’re heating your home more often than cooling, you’d do the opposite.

Here’s why.

EER is the ratio of the input energy in watts (electricity) to the output energy in BTUs (cooling capability) of an HVAC unit when the outside is 95° F and the inside is 80° F with half the humidity value of outside. So basically when it’s ridiculously hot out.

While less useful than its cousin the SEER, it’s often included for units sold in the southwest (where there’s a federal minimal efficiency of 11.7-12.2 required depending on the size of the unit) because high temperature and low moisture days are pretty common.

SEER is the same ratio as EER, but it’s taken as an average over various seasonal temperatures instead of a single temperature. That means it’s a better metric to measure how your cooling unit will perform across the year. The federal minimum required SEER is 13 for the northern part of the United States and 14 for the southern parts.

HSPR is basically EER and SEER but for heating. It’s the output in BTUs of heat divided by the electricity used to generate that heat in watts. For example, an electric heater generates 3,410 BTUs of heat using 1kW of power, which, if you use the HSPF equation (3,410 BTU / (1kW * 1,000)), gets you a HSPF of 3.41. A value above 8 is required to qualify for any rebate or credit programs, and any value below that is regarded as inefficient.

Since all these values are ratios, you can easily compare the savings between two different units. To find the difference in efficiency between a heat pump with a SEER value of 20 and one with a value of 14, divide 14 by 20, subtract it from 1, and multiply by 100:

((1 – (14/20)) * 100 = 30%

The SEER 20 unit would be 30% more efficient than the SEER 14 unit.

To learn more about heat pump sizing, check out this article: What Size Heat Pump Do I Need?

The best heat pump brands

You want to keep an eye on who designed and built your heat pump. Generally, the better the heat pump, the more expensive it’s going to be—such is life. But it’s worth knowing what type of brand you’re looking at.

Budget brands

  • Manufacturers: Payne, Aire-Flo, Airtemp, Ameristar, DiamondAir
  • Lifespan: Generally last 12-16 years

Standard brands

  • Manufacturers: Daikin, Goodman, Rheem, Coleman
  • Lifespan: Generally last 15-18 years

Premium brands

  • Manufacturers: Lennox, Carrier, Bryant, Mitsubishi, LG, Fujitsu
  • Lifespan: Generally last 17-22 years

If you go the budget route, which sometimes makes the most sense, be sure to still look for brands that are EnergyStar rated.

Last year, the following brands had units that EnergyStar named 2020’s most efficient heat pumps: Amana, Bryant, Carrier, Champion, Coleman, Daikin, Lennox, Elite, Fraser-Johnston, Fujitsu, LG, Luxaire, Mitsubishi, and York.

Heat pump cost

So you know what makes a heat pump work and which one might be right for your house—but how much is this thing going to cost? We’re not going to sugarcoat it: it’s expensive. There are a few main costs to consider:

  • Unit price
  • Installation costs
  • Operating costs

We’ll walk through each of those and then go over some utility and government programs that can help make up for some of the upfront costs.

Unit price

Heat pumps vary in cost so much, it’s almost not worth generalizing. Remember, water and ground source heat pumps are effectively bespoke engineering products, specially designed for each home. That means they’ll be more expensive.

Air source pumps, on the other hand, can be bought off the shelf. These units can cost anywhere from $500 (for single-room units) up to several thousand dollars (for whole-home units). The more efficient the unit, the more expensive it will be upfront.

Installation costs

Again, there are a lot of factors here, but you’re probably looking at a couple thousand dollars in HVAC labor—at least.

There are also various parts costs associated with the installation of a heat pump. Outdoor units need to be placed on a raised concrete pad, which may need to be built, and the lines for air and refrigerant need to be properly installed, insulated, sealed, and made to be flush with the wall. Indoor units need to be placed above windows, more than 30cm from the ceiling. And electric heating strips may need to be installed within your heat pump if you live in an exceptionally cold area, in order to provide more heating when it gets below freezing.

You might also want to install additional devices with your heat pump to ensure the highest level of comfort. For example, air handlers will allow you to better control the air flow from your heat pump, and smart thermostats and zoning systems will give you better control over your heat pump, allowing you to set the temperature for specific rooms and times.

Because it’s so expensive, you’ll definitely want to get a few quotes from different HVAC contractors before biting the bullet.

Utility and government programs

Because heat pumps save energy—especially electricity—when compared to the alternatives, there are plenty of utility and government programs to help you pay for them.

Federally, there are tax incentives for installing heat pumps.

  • If you install a geothermal or water source heat pump, you can receive a tax credit for 26% of the total installation cost if installed before 2021, and for 22% of the installation cost if installed before 2022. Note: this program is set to expire on January 1, 2022.
  • For air source heat pumps, you can receive a credit of 10% of the installation cost, with a maximum lifetime credit of $500. This program is set to expire at the end of 2020.

Local utility and state programs can help you lower the cost of a heat pump further. Your local power utility has as much of an incentive to cut your home electricity use as you do. Yes, it means they’re able to sell you less electricity, but to the provider, it’s worth more today to avoid the potential costs of producing more electricity. Energy efficiency allows the utility to continue to run the power grid with the existing power plants and lines even with population growth, and not have to make costly investments in new power plants or power lines that may not pay for themselves for decades.

In part because of this, all utilities run some sort of residential energy efficiency program to help offset some of the costs of retrofitting or upgrading your home.

You can use this link to see what program, if any, your utility is running for heat pumps. This support can come in the form of rebates and state and local tax credits.

Additionally, your local utility may work with local HVAC contractors to lower the installation cost of heat pumps. It’s worth checking your local utilities website to see if they have any contractor partners that lower the cost of installation. Here’s an example of this information from Georgia Power.

Read more about heat pumps and other savings opportunities