A heat pump moves warmth instead of making it from scratch
A heat pump is an appliance that pulls heat from outside air, ground, or water and moves it indoors to warm your home. In summer, it reverses and pulls heat out of your home to cool it. This is different from a furnace, which burns fuel to create heat. A heat pump uses electricity to move existing heat from one place to another, which is why it can heat and cool with the same equipment.
The core idea is straightforward: heat exists everywhere, even in cold air. A heat pump's refrigerant (a special liquid that changes state easily) absorbs that heat on the outside, gets compressed to raise its temperature, and releases the warmth indoors. Then the cycle repeats. Because it moves heat rather than generating it, a heat pump can deliver more warmth energy than the electricity it uses—a ratio called the coefficient of performance, or COP.
Key Takeaways
- Heat pumps move warmth from outside to inside in winter and reverse the process in summer, so one unit handles both heating and cooling.
- The three main types are air-source (most common), ground-source (most efficient but expensive to install), and water-source (rare in residential homes).
- Heat pumps work in cold climates but lose efficiency below about 25°F, so many cold-climate homes pair them with a backup furnace.
- A heat pump's real-world performance depends on outdoor temperature, your home's insulation, and how well the system is sized and installed.
- Heat pumps cost more upfront than furnaces but often cost less to run over time, especially if you're replacing both a furnace and air conditioner.
Air-source heat pumps: the most common type
An air-source heat pump pulls heat from the outdoor air and moves it inside. It looks like an air conditioner unit on the outside and connects to an indoor unit (usually mounted on a wall or in a closet) via refrigerant lines. In heating mode, the outdoor unit absorbs heat from the air and sends it in. In cooling mode, it pulls heat out of your home and releases it outside.
Air-source heat pumps are the cheapest to buy and install because they don't require digging or drilling. They work in most climates, though their heating output drops as outdoor temperature falls. Below about 25°F, the system has to work harder and uses more electricity. In very cold climates, many homeowners pair an air-source heat pump with a backup electric furnace or gas furnace that kicks in on the coldest days.
There are two styles: split systems (separate indoor and outdoor units) and packaged units (one outdoor box that handles everything). Split systems are more common in residential homes because they're quieter and more flexible to install.
Ground-source and water-source heat pumps: higher efficiency, higher cost
A ground-source heat pump (also called a geothermal heat pump) pulls heat from the ground instead of the air. The ground stays at a constant temperature year-round—usually 45°F to 75°F depending on your location—so the heat pump doesn't have to work as hard in winter or summer. This makes ground-source systems more efficient than air-source systems, especially in cold climates.
The tradeoff is installation cost. A ground-source system requires drilling deep wells or laying long loops of pipe underground, which can cost $15,000 to $30,000 or more before any incentives. You also need enough land or the right soil conditions. Ground-source systems are most common in rural areas where land is available and heating costs are high.
Water-source heat pumps pull heat from a pond, lake, or well. They're rare in residential homes because most homeowners don't have a reliable water source, and the environmental rules around using water vary by state. They work the same way as ground-source systems but use water instead of ground loops.
How heat pump efficiency is measured
Heat pump efficiency is measured in two ways depending on whether it's heating or cooling. For heating, the measure is HSPF (Heating Seasonal Performance Factor). For cooling, it's SEER2 (Seasonal Energy Efficiency Ratio). Both are ratios of heat output to electricity input, so a higher number means more efficient.
Current federal minimum standards require an HSPF of at least 8.5 and a SEER2 of at least 13 for most air-source heat pumps, though high-efficiency models can reach HSPF 10 or higher and SEER2 16 or higher. Ground-source systems typically have HSPF ratings of 10 to 12 because the ground temperature is stable.
Real-world performance depends on outdoor temperature, how well your home is insulated, and whether the system is sized correctly. An oversized heat pump cycles on and off too often and wastes energy. An undersized one runs constantly and can't keep up. A professional load calculation (based on your home's square footage, insulation, windows, and climate) determines the right size.
When a heat pump loses efficiency in cold weather
As outdoor temperature drops, an air-source heat pump's heating output falls. At 47°F, a typical air-source heat pump delivers full heating capacity. At 32°F, it delivers maybe 75 percent of that. At 0°F, it might deliver 50 percent or less. The system also has to use more electricity to move heat from very cold air, so your heating bills rise on the coldest days.
Many cold-climate homes use a dual-fuel system: an air-source heat pump for most of the year, plus a gas furnace or electric resistance heater that turns on automatically when outdoor temperature drops below a set point (often 25°F to 35°F). This keeps heating costs reasonable on the coldest days while letting the heat pump do the work when it's efficient.
Some newer air-source heat pumps are designed for cold climates and can maintain reasonable output down to -13°F or lower, though they cost more and are still less efficient than in milder weather. If you live in a very cold climate, ask your installer whether a cold-climate heat pump or a dual-fuel system makes sense for your situation.
Heat pump installation and what to expect
Installing an air-source heat pump typically takes one to three days. The installer mounts the outdoor unit on a concrete pad or wall bracket, runs refrigerant lines and electrical wiring to the indoor unit, and connects the indoor unit to your ductwork (if you have it) or mounts it on a wall. If you don't have ducts, a ductless mini-split system uses individual indoor units in each room.
Ground-source installation takes longer—usually one to two weeks—because the installer has to drill wells or dig trenches for the ground loops. This is disruptive and requires access to your yard or basement. Some homes aren't suitable for ground-source systems because of soil type, bedrock, or space constraints.
Before installation, a professional should perform a load calculation to size the system correctly and check your home's insulation and air sealing. A heat pump works best in a well-insulated home with minimal air leaks. If your home is drafty or poorly insulated, you may want to improve those first—it's cheaper than oversizing the heat pump.
Heat pump costs and long-term savings
An air-source heat pump system costs roughly $4,000 to $8,000 installed, depending on your region and whether you're replacing an existing system or starting from scratch. A ductless mini-split system costs $3,000 to $6,000. A ground-source system costs $15,000 to $30,000 or more. These are rough ranges; your actual cost depends on your home's size, the contractor's rates, and local labor costs.
Operating costs are usually lower than a gas furnace or electric resistance heating, especially in moderate climates. If you're replacing both a furnace and a separate air conditioner, a heat pump can save money because you're consolidating two appliances into one. In cold climates where you need a backup furnace, the savings are smaller but often still positive over the system's 15 to 20 year lifespan.
Many states and utilities offer rebates or tax credits for heat pump installation. The federal government offers a tax credit of up to $2,000 for a heat pump in some cases, though the rules change and depend on your income and home's characteristics. Check with your local utility and your state's energy office for current programs.
Frequently Asked Questions
Do heat pumps work in freezing weather?
Yes, but with reduced efficiency. Air-source heat pumps can heat homes at 0°F, but they deliver less warmth and use more electricity than at milder temperatures. Many cold-climate homes pair a heat pump with a backup furnace that activates below 25°F to 35°F. Ground-source heat pumps work efficiently even in freezing weather because ground temperature stays constant.
Can I use a heat pump if I don't have ductwork?
Yes. A ductless mini-split heat pump has individual indoor units mounted on walls in each room, connected by small refrigerant lines to an outdoor unit. Mini-splits are common in homes without ducts, additions, or rooms that are hard to heat or cool with a central system.
How long does a heat pump last?
A well-maintained air-source heat pump typically lasts 15 to 20 years. Ground-source systems often last 20 to 25 years because the underground loops are protected from weather. Regular maintenance—cleaning filters, checking refrigerant levels, and inspecting the outdoor unit—extends the lifespan.
What's the difference between a heat pump and an air conditioner?
An air conditioner only cools; it pulls heat out of your home and releases it outside. A heat pump does both: it cools in summer and reverses to heat in winter. A heat pump uses the same basic equipment as an air conditioner but adds a reversing valve that changes the direction of refrigerant flow.
Will a heat pump work if my home is poorly insulated?
A heat pump will work, but it will run constantly and your heating and cooling bills will be high. Heat pumps are most cost-effective in homes with good insulation and air sealing. If your home is drafty or has thin walls, consider improving insulation before installing a heat pump, or size the system larger to compensate—though that increases upfront cost.