How much does a heat pump cost?

Ducted air-source: $4,000-$8,000 installed. Ductless mini-split (single zone): $3,000-$5,000. Multi-zone mini-split: $7,000-$15,000. Geothermal: $15,000-$35,000. Federal tax credit (30%, up to $2,000) reduces net cost significantly.

Do heat pumps work in cold climates?

Yes. Modern cold-climate heat pumps work efficiently down to -15°F to -22°F. Models from Mitsubishi (Hyper-Heating), Daikin, and Fujitsu are rated for extreme cold. Below their rated temperature, they switch to auxiliary electric resistance heating. Heat pumps are now viable in all US climate zones.

Are heat pumps worth it?

For most homeowners, yes. Heat pumps provide both heating and cooling in one system. They're 2-3x more efficient than electric resistance heating. With the 30% federal tax credit, payback is 3-7 years. Best value: replacing an aging AC + furnace combo, homes with electric resistance heat, or adding to homes without ductwork (mini-split).

Heat pump vs furnace — which is better?

Heat pumps are more efficient at moderate temperatures and provide cooling. Gas furnaces are better in extreme cold and where natural gas is cheap. The trend is toward heat pumps with gas backup for cold climates. New homes increasingly use heat pumps as the primary system.

Article

Home Improvement

Heat Pump Guide: Types, Efficiency, Costs & How They Work

Lumberama Editorial Team, HVAC & Energy Efficiency Specialists Jun 10, 2026 14 min read

How Heat Pumps Work

A heat pump moves heat instead of generating it. In summer, it moves heat from inside your home to outside (like an AC). In winter, it reverses — extracting heat from outdoor air (even in cold weather) and moving it inside. Because it moves heat rather than creating it, a heat pump is 2–3x more efficient than electric resistance heating and can be more efficient than gas furnaces at moderate temperatures.

Types of Heat Pumps

Air-Source Heat Pump (ASHP)

The most common type. An outdoor unit (looks like an AC condenser) exchanges heat with outdoor air. Connected to an indoor air handler with ductwork (ducted) or to wall-mounted heads (ductless/mini-split). Modern cold-climate ASHPs work efficiently down to -15°F to -22°F, making them viable in northern climates.

Efficiency: 300–400% efficient at moderate temperatures (for every 1 kWh of electricity, they produce 3–4 kWh of heat). Rated in SEER2 (cooling) and HSPF2 (heating).

Cost: $4,000–$8,000 installed (ducted). $3,000–$6,000 (ductless mini-split).

Ground-Source (Geothermal) Heat Pump

Exchanges heat with the ground (which stays 50–60°F year-round below the frost line). A loop of underground pipes circulates fluid that absorbs ground heat in winter and rejects heat in summer. The most efficient HVAC system available — 400–500% efficient. But the underground loop is expensive to install.

Cost: $15,000–$35,000 installed (including ground loop). Payback: 5–10 years through energy savings.

Ductless Mini-Split Heat Pump

An air-source heat pump without ductwork. An outdoor compressor connects to one or more indoor wall-mounted heads via refrigerant lines. Each head heats/cools its zone independently. Perfect for homes without ductwork, room additions, garages, and supplementing an existing system.

Cost: $3,000–$5,000 for single-zone. $7,000–$15,000 for multi-zone (3–5 heads).

Efficiency Ratings

SEER2 (cooling): Higher = more efficient. Minimum: 14.3 SEER
Good: 16–18 SEER
Excellent: 20+ SEER2.

HSPF2 (heating): Higher = more efficient. Minimum: 7.5 HSPF
Good: 9–10 HSPF
Excellent: 11+ HSPF2.

COP (Coefficient of Performance): Heat output divided by energy input. A COP of 3.0 means 3 kWh of heat per 1 kWh of electricity.

Federal Tax Credits

The Inflation Reduction Act provides a 30% federal tax credit (up to $2,000) for qualifying heat pumps. This significantly reduces the net cost. Some states and utilities offer additional rebates.