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January 27, 2026
You’ve probably heard about heat pumps, but you may be wondering how they work and if it’s worth installing one in your home. Whether your current heating system is on the fritz and you’re thinking about switching, or you’re just curious about heat pumps, this FAQ is for you.
There are three kinds of heat pumps: Air-source, ground-source, and water-source. Air-source heat pumps extract heat from the air. Ground-source heat pumps extract heat from the ground. And—you guessed it—water-source heat pumps extract heat from water. The most common type of residential heat pump is air-source.
Cold-climate air-source heat pumps are specifically designed for cold winter climates. Many models can handle temperatures down to –15 degrees.
Heat pumps have an indoor unit and an outdoor unit. Refrigerant flows between them. In the winter, the refrigerant absorbs heat from outside (sounds odd, but it’s true), which is compressed and pushed into your home as heat. In the summer, the refrigerant absorbs heat from inside and pushes it out, which cools your home.
Heat pumps can be ducted or ductless. Ducted systems can heat and cool the whole home through a forced-air system that utilizes your existing ductwork. Ductless (or “mini-split”) systems can heat and cool specific spaces. If you currently have a forced-air system, such as a furnace, you may be able to retrofit it for a ducted heat pump. If you don’t currently have ductwork, a ductless heat pump is likely a better fit for your home.
There are a few key differences between heat pumps and a furnace or boiler:
It depends. Rewiring America estimates that you could save almost $900 a year on heating costs if you’re switching from oil, propane, or electric resistance heat. But if you’re switching from natural gas, you're less likely to save money. That’s because natural gas is typically cheaper than electricity.
That said, many natural gas providers charge a monthly service fee just for maintaining the connection to your home. If you only use natural gas for heating (and not for your water heater or stove), you might be able to disconnect the service entirely after switching to a heat pump.
Eliminating the service fee could save you approximately $300 to $600 a year. However, keep in mind that you’ll use more electricity, so your net costs may still increase.
If your home uses electric resistance heating, such as baseboard heaters or an electric furnace, switching to a heat pump might make sense. That’s because electric resistance heating is one of the most expensive types of heating. Heat pumps are up to three to four times as efficient as traditional electric heating sources, meaning you’ll get the same amount of warmth for less energy (and money).
Cooling is another reason to switch. If your home doesn’t already have air conditioning, a heat pump might be a good way to add whole-home cooling efficiently.
Not all heat pumps are created equal. Choosing an ENERGY STAR-certified model can save you more money over time because they are more efficient to run.
If you live in a colder climate, consider a cold climate air source heat pump. These are specifically designed to operate efficiently at temperatures below freezing. Some of the newest models, designed to meet the Department of Energy’s Cold Climate Heat Pump Challenge requirements, can maintain their full heating capacity at 5°F. They also incorporate staged auxiliary heating to reduce electricity use at very cold temperatures.
If you're installing a heat pump, it’s always worth getting multiple quotes. Look for local contractors, whose prices are generally more reasonable than national companies. You’ll want to make sure your contractor can size a system appropriately for your home and has experience installing heat pumps. Don’t be afraid to ask lots of questions. This is a significant purchase, and you want to ensure it will work well for you and your home. Efficiency Smart has rebates to help reduce your upfront costs.
Efficiency Smart is here to help answer your heat pump questions. Give us a call to discuss your home heating needs, and we’ll guide you in the right direction. We can’t recommend specific contractors, but we can help you prepare a list of questions to ask. We can help you understand the differences in options, so you’ll be better equipped to choose the option that best fits your home and budget.
Call us at 877-889-3777 or email [email protected].
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