Industry Insights
Heat Pumps: Gaining Ground in Colder Climates
January 13, 2015
Air source heat pumps were once predominately found in the warmer southern regions of the U.S. where temperatures infrequently drop below freezing. These units did a good job of removing heat from a house in the summer and a fairly good job of extracting heat from the outside air in the winter, as long as temperatures did not drop much below freezing. Recent technological improvements have changed these limitations, making heat pumps a viable option, even in some of the coldest northern states.
Certain units can maintain the same heating efficiency down to 5° F, and even continue to provide heat down to -13° F at 85% efficiency . Costs range between $3,000 and $10,000, depending on the size of the house. In addition to federal tax credits, many states offer incentives that offset the upfront costs by as much as $1,000. With the increased operational temperature range, lower energy costs, and incentives, heat pumps are becoming increasingly popular.
These newer heat pumps are significantly more efficient and cost effective, especially in areas without access to natural gas. The Energy Information Administration constructs a Heating Fuel Comparison Calculator which compares heating costs based on fuel type and heating source. The actual cost will vary based on local energy prices and the efficiency of each home’s heating system. Using standard assumptions on price and efficiency, the calculator shows that an oil furnace costs about $33 to produce one million BTUs, electric baseboard heating $38, and a propane furnace $42. An electric powered air source heat pump can produce the same output for $15.
The chart below shows the total U.S. shipments of heat pumps and traditional warm air furnaces. Heat pumps are clearly gaining ground. Over the last twenty years, the average annual growth in heat pump shipments was 4.1%, while furnaces have actually experienced an average annual decline of 0.2% .
Certain units can maintain the same heating efficiency down to 5° F, and even continue to provide heat down to -13° F at 85% efficiency . Costs range between $3,000 and $10,000, depending on the size of the house. In addition to federal tax credits, many states offer incentives that offset the upfront costs by as much as $1,000. With the increased operational temperature range, lower energy costs, and incentives, heat pumps are becoming increasingly popular.
These newer heat pumps are significantly more efficient and cost effective, especially in areas without access to natural gas. The Energy Information Administration constructs a Heating Fuel Comparison Calculator which compares heating costs based on fuel type and heating source. The actual cost will vary based on local energy prices and the efficiency of each home’s heating system. Using standard assumptions on price and efficiency, the calculator shows that an oil furnace costs about $33 to produce one million BTUs, electric baseboard heating $38, and a propane furnace $42. An electric powered air source heat pump can produce the same output for $15.
The chart below shows the total U.S. shipments of heat pumps and traditional warm air furnaces. Heat pumps are clearly gaining ground. Over the last twenty years, the average annual growth in heat pump shipments was 4.1%, while furnaces have actually experienced an average annual decline of 0.2% .
- Mitsubishi Electric, http://www.mitsubishipro.com/products/heat-pump-systems
- Energy Information Administration, http://www.eia.gov/neic/experts/heatcalc.xls
- Air-Conditioning, Heating, & Refrigeration Institute, Historical Data, http://www.ari.org/site/493/Resources/Statistics/Historical-Data