Looking for heat pump systems? Beware of these hidden costs

If you work in construction, you may have heard of heat pump systems and how they have become synonymous with energy efficiency. These temperature control systems are steadily improving, with models that have passed the DOE’s Cold Climate Heat Pump Challenge expected to reach homes by the end of the year.

Heat pumps not only heat your home efficiently; they can also cool it down. Heat pumps in 2023 sold out gas ovens for the second year in a row. Heat pumps do a better job than air conditioners and are more efficient than traditional heating and cooling methods, such as gas ovens. So wherever you live, there is always something a heat pump that works for you – a major shift compared to ten years ago.

“[Heat pumps] They are real technological advances, and they perform better. That’s why you see a lot more of it,” says Brooke Greenwood, director of product management at heat pump manufacturer Carrier. “Depending on the region you are in, we have different heat pumps that offer different efficiencies. When it is freezing outside, you can still heat your house with a heat pump. Depending on the model and its Energy Star ratingwe have several certified efficiency and comfort technologies, based on what you need for your application.”

So what’s the catch? Are heat pumps really as great as they are made out to be, or are there pitfalls that homeowners should be aware of? Here’s everything you need to know about these devices.

What is a heat pump and how does it work?

Even though they have “heat” in the name, heat pumps can heat and cool your home.

“In the colder months, the heat pump will actually take heat from the cold outside air and transfer it indoors,” Greenwood said. “In the warmer months, it pulls heat from the indoor air to cool your home.”

Heat pumps are powered by electricity instead of natural gas, which is primarily the fossil fuel methane, and they transfer heat using refrigerant to provide year-round comfort.

Because they don’t burn fossil fuels, they are more sustainable, and their energy efficiency makes them an upgrade from traditional air conditioning systems.

“It’s an opportunity to get away from gas furnaces and fossil fuel use,” Greenwood said.

Are there hidden costs associated with purchasing a heat pump?

Whether it’s your cable bill, your cell phone, or buying a car, we’ve all experienced hidden costs that are “too good to be true” and catch up with you over time.

While there are not necessarily ‘hidden costs’, there are things that can affect the cost of installing a heat pump.

“It’s simple overall,” Greenwood said. “There are actually no hidden costs. But there are a number of things you should take into account.”

New ductwork

Not every heat pump needs new pipework or even changes to the existing infrastructure in your home. Traditionally, Greenwood said, “heat pumps will use the existing ductwork and only replace your air conditioning.”

But there are some exceptions.

For example, very old homes – especially in the northeast and south – may need some modifications, such as ductwork or additional wiring. But generally speaking, if your ductwork is fairly new, you should be ready for a heat pump.

“It’s really about the contractor who built the house or installed the ductwork,” Greenwood said. “Those haven’t really changed much over the years. So if it’s done correctly, you’re pretty much good to go.”

If you have no channels at all, there is a solution for that too.

“Some historic homes don’t actually have any ductwork through the house,” Greenwood said. “But we have a solution, our ductless heat pumps. They require minimal construction, but give you a heating and cooling solution that is faster and more cost-effective to install in that application.”

Allow

Broadly speaking, Greenwood says most homeowners don’t need a permit to switch to a heat pump.

But every city is different and some areas will have different requirements.

And if you’re in a home that requires a ductless heat pump, you may live in a historic or otherwise protected district, which can be very strict about changes. So make sure you check your local municipality’s guidelines before making a decision.

Improving your electrical system

The most likely change you’ll need to make to accommodate a heat pump installation is electrical upgrades.

Greenwood often said, if you replace a gas heater and air conditioning unit with a heat pump, you will need an electrical upgrade to move the connection from 115 volts to 230 volts. You may also need a larger electrical panel or additional wiring.

The good news is that there are federal, state, and local incentives available to help you make that upgrade. An easy way to lighten the load is with a tax credit for a new electrical panel of the tax authorities.

Higher electricity costs

Electricity costs can vary greatly depending on where you live. So if you switch from a gas heater to a heat pump that runs on electricity, you must take into account the difference in costs between natural gas and electricity.

“[Heat pumps] can be more expensive to operate with higher electricity costs, compared to the gas heat provided by a furnace,” Greenwood said.

Your utility company may also charge a disconnection fee if you cancel your gas subscription altogether.

Home insulation

It’s not a requirement for adopting a heat pump, but Greenwood said improving insulation can be a key to ensuring your new unit runs efficiently. This problem would affect air conditioners, furnaces, and heat pumps alike. But if efficiency is your overall goal, installing a heat pump would be a good time to improve your home’s insulation.

Your home’s insulation plays a crucial role in how hard your HVAC equipment has to work to maintain a comfortable temperature.

“[In a poorly insulated house]To maintain the desired level, your equipment would have to work more, compared to a house that is better insulated and keeps the heat or cool in,” says Greenwood.

How to save money when purchasing a heat pump

If you’re committed to a heat pump but want to save money, your first step should be to look for incentives and tax breaks in your area.

Part of for example Inflation Reduction Act This allows you to claim 30% of the cost (up to $2,000) of a heat pump that meets certain efficiency standards.

There are several local utility rebates for high-efficiency systems installed by participating contractors, Greenwood said. Some manufacturers offer rebates and states and municipalities have their own credits available.

“Really, it’s about moving to a more sustainable solution,” Greenwood said. “It’s an opportunity to move away from gas furnaces and fossil fuel use. So this really gives people a way to get there and encourages them to do that.”