Here's How Heat Pumps Benefit Homes, Wallets, & the Climate
Heat pumps can offer a wide range of benefits, from a more comfortable, healthier home to lower energy bills and a smaller carbon footprint.
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Heat pumps have become a fixture in many homes over the past few decades as governments increasingly understand their climate, energy, and affordability benefits and craft policies to promote their adoption.
Globally, heat pumps provided 10% of all space heating in 2021. In the United States, their annual sales have increased by 70% since 2004, while gas furnace sales have decreased by 7%. Similar shifts have been seen in places like China and the European Union.
For homeowners, this technology offers several compelling reasons to make the switch from traditional heating appliances:
- Year-round comfort. Heat pumps can save users money by providing heating and air conditioning, along with hot-weather dehumidifying, through a single system instead of requiring separate appliances for summer and winter temperature control. In fact, all air conditioners are actually a type of heat pump.
- Energy efficiency. Unlike furnaces, which create heat by burning fuel or using electric resistance, heat pumps simply move heat between the indoors and outdoors. This allows them to provide substantially more heating for each unit of energy they consume, which can reduce energy bills.
- Healthier indoor air. Heat pumps eliminate a source of combustion inside the home, preventing heating equipment from sending harmful chemicals like carbon monoxide and nitrogen oxides into the air.
- Cold-climate functionality. Modern heat pumps can operate effectively in much colder climates than earlier technologies, making them a viable heating option in a wide range of geographies.
- Climate benefits. Heat pumps are an important climate solution. In a 2022 report, the International Energy Agency estimated that they could eliminate the equivalent of the annual carbon dioxide emissions of all cars in Europe.
But can a heat pump save me money?
For many homeowners, affordability is a key driver of decisions about which appliances to purchase. Since heat pumps are far more efficient than traditional heating solutions, they often lead to significant cost savings.
But determining exactly how much you can save with a heat pump can require some investigation. For example, people replacing an oil boiler in the northern United States, a high-efficiency gas furnace in Germany, and an aging furnace and air conditioner in Brazil will likely see very different cost savings.
The key variables influencing this are:
- the type of equipment a heat pump is replacing, including its energy-efficiency level
- the local climate
- the home’s insulation and air sealing
- local electricity and fuel prices.
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When replacing existing equipment, heat pumps are (typically) highly cost effective
For the majority of homeowners replacing existing heating and AC systems, heat pumps are the most cost-effective option—or, at the very least, high on the list.
These appliances are particularly cost effective if an air conditioner is due for replacement. A heat pump’s upfront cost isn’t much more than an AC’s in many places, and its operational cost is likely far less, since it can provide efficient (and therefore energy-bill-minimizing) air conditioning while also taking over the home’s heating load from a traditional heating appliance. The heat pump would also be more efficient, and therefore more affordable, than the heater it replaces, providing energy bill savings in both summer and winter months.
Homeowners with a relatively new furnace and an aging air conditioner may want to consider installing a heat pump and using the existing furnace as backup, a configuration referred to as a dual-fuel or hybrid heat system.
In very cold climates, some people prefer having a dual-fuel system to provide backup on the most frigid days.
Heat pumps tend to offer especially compelling savings when replacing electric-resistance, propane, or oil heating. The costs compared with a natural gas system are more dependent on local utility rates.
Understanding heat pump installation costs
Installation costs vary considerably from house to house. A straightforward installation using existing ductwork can be inexpensive, while one that requires electrical service upgrades, new ductwork, weatherization, or other modifications may cost significantly more.
It’s worth noting, however, that some of these costs also apply to the installation of other heating and cooling equipment. Weatherization would also be required for gas furnaces, for example.
Contractor availability and familiarity with different types of heat pumps can also affect costs. Homeowners interested in heat pumps may benefit from identifying a contractor before purchasing one, as some contractors may not be able to install particular models. This could force them to return the heat pump or seek out other contractors, potentially at a higher rate.
Heat pumps are a win–win
As energy bills rise in many parts of the world and extreme weather becomes more common, heat pumps offer homeowners something increasingly valuable: more comfort, greater energy efficiency, and the potential for lower utility bills—all while reducing their environmental footprint.