Should I get a heat pump?

If you’re interested in saving energy, reducing utility bills and reducing pollution, now is a good time to explore whether a heat pump is right for you.

Heat Pump Intallation Sicamous BC

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What is a heat pump?

Heat pumps are efficient heating and cooling systems that can heat and cool your home, heat your water and even dry your clothes more efficiently than other technologies.

How do heat pumps work? 

Unlike a furnace or boiler, heat pumps don’t create heat. Instead heat pumps transfer heat from one area to another. Because heat pumps aren’t actually generating heat and just moving it across spaces, they are up to four times more efficient than fossil-fuel furnaces

Because heat pumps move heat from one place to another, they can be used for both heating and cooling. In cooler months when you want to heat your home, a heat pump will pull heat from the outside air and transfer it into your home. On the flip-side, in hotter months, the heat pump simply reverses the flow, pulling heat out of your home and transferring it outdoors. 

Heat pump technology isn’t limited to space heating. A heat pump water heater uses the same process, pulling heat from the air and using it to heat water. Same for a heat pump clothes dryer, which pulls heat from the air to dry your clothes. 

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Heat pump technology can be used for space heating, water heating and clothes drying. Federal incentives went into effect in 2023 to help more Americans take advantage of efficient heat pump technology in their homes.

Do heat pumps work in cold climates?

You bet. Today’s cold-climate heat pumps can heat a home efficiently even when the temperature drops below -10 degrees Fahrenheit. Even at this temperature, cold-climate heat pumps are more energy efficient than furnaces and boilers.

That being said, if you live in a poorly insulated home in a climate where the temperature regularly stays below 10 degrees, a dual-fuel system may be better than a stand-alone heat pump. With this set-up, the heat pump can be your air conditioning and milder winter heat, and leave heating on the the coldest days to your backup system.

How expensive is a heat pump? 

Updating a home’s heating and cooling system is a big investment, so it’s good to know what to expect. 

The cost of installing a heat pump can vary widely, but you can expect a heat pump installation to cost between $3,500 and $20,000, depending on the size of your home. The average American homeowner pays an average system cost of about $14,000, after rebates.

Replacing any home heating or cooling system has a cost. A new fossil-fuel powered furnace can cost between $1,500 and  $6,500 with a $2,500 installation cost. Installing a central air conditioner can cost $2,000 with $5,000 to $9,000 for installation. A heat pump can replace both your air conditioner and furnace with its dual heating and cooling functions. 

Because heat pumps are more efficient than furnaces, you can expect long-term utility bill savings by installing a heat pump. According to data from the National Renewable Energy Laboratory, switching to a heat pump can reduce annual heating and cooling bill anywhere from $100 to $1,300 per year with the average homeowner saving $667 per year by switching to a heat pump. 


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Federal tax credits will cover 30% up to $2,000 of the heat pump cost and installation. Depending on your level of income, state rebates may bring the cost down even more.

What incentives and rebates are there for heat pumps? 

If you install an efficient heat pump between now and 2032, you are eligible for a federal tax credit that will cover 30% up to $2,000 of the heat pump cost and installation. This tax credit is capped at $2,000 per year, so if you are considering multiple energy upgrades you can maximize the incentives by spacing out your energy efficiency home improvements across years.

If you meet the household income requirements, you may also be able to tap state-administered rebates to get a heat pump, which are expected to be available later this year. Those rebates could cover as much as $8,000 for heating and cooling heat pumps and $1,750 for heat pump water heaters

If your household income is less than 80 percent of your state’s median household income, you are eligible for 100 percent of the rebates available. If you purchase both a heat pump and a heat pump water heater, you can receive up to $9,750 back. If your household income is between 80 and 150 percent of your state’s median household income, you can receive 50 percent of the rebates for a total of $4,875. If your household income is over 150% of your state’s median household income, you do not qualify for heat pump rebates.


Johanna Neumann

Senior Director, Campaign for 100% Renewable Energy, Environment America Research & Policy Center

Johanna directs strategy and staff for Environment America's energy campaigns at the local, state and national level. In her prior positions, she led the campaign to ban smoking in all Maryland workplaces, helped stop the construction of a new nuclear reactor on the shores of the Chesapeake Bay and helped build the support necessary to pass the EmPOWER Maryland Act, which set a goal of reducing the state’s per capita electricity use by 15 percent. She also currently serves on the board of Community Action Works. Johanna lives in Amherst, Massachusetts, with her family, where she enjoys growing dahlias, biking and the occasional game of goaltimate.