As a homeowner or soon-to-be-homeowner, you may have heard the buzz around heat pump HVAC systems and heat pump water heaters. What are they? Should I get them? Will they save me money?  

Most homeowners do what they can to lower their utility bills like installing smart plugs to automatically turn off the lights when they leave the house or by reducing how often they water their lawn. But a huge component in a home’s utility bills actually come from HVAC and water heaters! In a typical home, space and water heating accounts for 62% of the energy used, with another 8% for air conditioning.  

On top of saving money, there has been a growing interest in contributing to a more sustainable and climate-friendly lifestyle that goes beyond buying a reusable water bottle. Making the decision to switch your HVAC system and water heater away from the typical furnace plus central air plus gas water heater can be a little daunting but you’ll know everything you need to know about these energy-efficient technologies by the end of this blog. 

What is a heat pump HVAC system? 

Heat pump HVAC systems are immensely efficient and provide solutions for both heating and cooling your home. They take the heat from the air or the ground, which makes them ideal for both hot and cold climates across the country. 

Here are the key benefits of heat pump HVAC systems: 

Save Money 

Heat pumps use significantly less energy compared to traditional HVAC systems which saves homeowners money on their utility bills. They do this by moving heat rather than generating it which consumes far less electricity. 

Improve Air Quality 

Heat pumps utilize advanced filtration systems, which help remove allergens, dust, and other pollutants from the air. This is especially beneficial for individuals with respiratory conditions or allergies. 

Especially in this day and age when it feels like the U.S. gets an air quality alert every week, it’s important to think about and address the quality of air in your home. Americans, on average, spend approximately 90 percent of their time indoors so it’s vital to do what you can to make that air safe to breathe! 

Environmental Friendliness 

As opposed to burning fossil fuels to generate heat, heat pumps pull existing heat from the air or ground which is more environmentally friendly. This is an easy but significant change a homeowner can make to fight against climate change. 

Flexibility and Comfort 

Heat pumps allow homeowners to precisely control the temperature in their home on a room by room basis. Kids run hot? Turn on the AC function of the heat pump in their rooms. Wife runs cold? She can adjust the heat to her liking when she’s hanging out in the living room. 

What is a heat pump water heater? 

Heat pump water heaters, also known as HPWHs, are designed to efficiently heat water by extracting heat from the surrounding air. Heat pump hybrid water heaters combine heat pump technology with traditional electric elements for increased efficiency and are ideal for those who want a HPWH but live in a cold climate. They are 3 times more efficient than traditional water heaters. 

Here's why homeowners should consider these systems: 

Energy Savings 

Compared to a standard electric resistant water heater, a HPWH can save a family of four as much as $427 a year on their energy bill. That is nearly a 50 percent savings over standard electric resistance water heaters, with a lifetime savings of around $3,704. By utilizing the heat in the air, they consume less electricity to produce hot water. 

Reduced Environmental Impact 

By using less energy, heat pump water heaters reduce carbon emissions by using less energy and help conserve natural resources. 

Improved Performance 

These systems can maintain a consistent water temperature even in colder environments. They also have built-in smart features that optimize performance and energy usage. 

Longevity 

Heat pump water heaters have longer lifespans (around 10-15 years) compared to traditional water heaters (8-12 years), resulting in fewer replacements and less waste.  

Financing Options for Homeowners 

To make these energy-efficient systems more accessible to them, homeowners have various financing options to choose from: 

Cash/Out of Pocket 

Paying upfront with cash or personal savings offers the advantage of avoiding interest charges and long-term financial commitments. 

Financing Programs 

Many manufacturers and contractors offer financing programs that allow homeowners to spread out the cost over time. These programs often come with competitive interest rates and flexible repayment terms. GoodLeap offers flexible financing options for homeowners looking to upgrade their homes. 

Government and Utility Incentives 

Homeowners can take advantage of government incentives, rebates, and tax credits to offset the initial costs of installing heat pump systems. The Inflation Reduction Act provides potential financial incentives for adopting energy-efficient technologies. 

Cost Estimates in 2023 

While the cost of heat pump HVAC systems and heat pump water heaters can vary depending on many factors such as system size, installation requirements, and regional variations, here are some estimated price ranges for 2023: 

Heat Pump HVAC Systems 

The cost of installing a heat pump HVAC system can range from $2,500 to $10,000, with the average being around $5,500. 

Heat Pump Water Heaters 

The cost of a heat pump water heater typically ranges from $1,500 to $3,000, not including installation.

Types of Heat Pumps: Ductless vs. Ducted 

There are two main types of heat pumps: ductless and ducted systems. Both have their own advantages: 

Ductless Heat Pumps 

Ductless heat pumps, also known as mini-split or multi-split systems, consist of an outdoor unit connected to one or more indoor units. They are ideal for retrofitting older homes or spaces without existing ductwork. 

Ducted Heat Pumps 

Ducted heat pump systems distribute air through a network of ducts, similar to traditional HVAC systems. They are suitable for new construction or homes with existing ductwork. 

Who Would Benefit Most from Installing Heat Pump Systems? 

Homeowners in moderate to extreme climates can benefit greatly from installing heat pump systems. They provide efficient heating and cooling solutions, resulting in energy savings and enhanced comfort. Additionally, individuals concerned about air quality and reducing their carbon footprint will find heat pump systems particularly advantageous. 

Supplemental Heat in Cold Climates 

In colder climates, where temperatures can drop significantly, supplemental heat may be required to supplement the heat pump's capacity. This can be achieved through electric resistance heaters or a dual fuel system that combines a heat pump with a backup furnace. These supplemental heating methods ensure optimal comfort even during extreme weather conditions. 

Financial Incentives, Rebates, and Tax Credits 

As mentioned before, homeowners can take advantage of various financial incentives and tax credits to offset the installation costs of heat pump systems. These incentives can vary by location but may include federal tax credits, state-level rebates, utility company incentives, and energy efficiency financing programs. Checking with local authorities, utility providers, and energy agencies is recommended to determine the available incentives in a specific area. 

Rewiring America has a great calculator on their website that details how much money you can get from the Inflation Reduction Act. They detail savings from heat pump HVAC systems, heat pump water heaters, and many other household electrification incentives that you may be eligible for. 

Frequently Asked Questions 

Can heat pump systems also be used as air conditioners? 

Yes, heat pump systems can be reversed to provide cooling during hot weather by extracting heat from indoors and releasing it outside. This would replace costly cooling options like central air, window units, and portable air conditioners. 

Can heat pump systems be integrated with solar panels? 

Absolutely! Combining heat pump systems with solar panels can further reduce energy costs and environmental impact. Solar panels can supply the electricity needed to power the heat pump system, making it an even more sustainable option. 

Heat pump HVAC systems and heat pump water heaters offer homeowners a range of benefits, including cost savings, improved air quality, and reduced environmental impact. By understanding the financing options available and exploring financial incentives, homeowners can make the transition to these energy-efficient technologies more affordable. Combining heat pump systems with solar panels provides an opportunity for even greater energy savings and environmental sustainability. Whether in a warm or cold climate, heat pump systems are a smart choice for those seeking long-term financial and environmental advantages in their homes. 

If heat pump HVAC systems and water heaters sound like a good fit for you and your home, reach out to your local HVAC contractor to get started on your heat pump journey! GoodLeap offers financing to homeowners all across the country to make saving the planet while saving money easy and painless. Ask your local HVAC contractor if they offer GoodLeap financing to ensure your loan is in good hands!