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Heat Pump or Furnace? Which is Better for my Home?

January 31, 2024


With federal incentives and state regulations, more and more homeowners are leaning in favor of heat pumps instead of furnaces. A heat pump isn’t the right choice for every home and budget, however.

If you’re considering an upgrade to your home’s heating system, you have to consider the pros and cons of heat pumps and furnaces to ensure you get the most out of your investment. Discover the advantages and disadvantages of a heat pump or furnace and the answer to “which is better for my home?” from the pros at Timo’s.

What Is a Heat Pump?

A heat pump is basically like an air conditioner in reverse. If you turned your window air conditioner unit around, the warm air that goes outside would go into your home, which is similar to how heat pumps work. Many heat pumps come with a reversing valve that lets them serve as heaters and air conditioners within one unit.

Heat pumps use the same type of cooling system as a refrigerator, a pair of copper coils separated by a tiny aperture, refrigerant, and compressor. The compressor pressurizes the refrigerant in the condenser coils and turns it into a liquid, releasing heat.

As this pressurized liquid sprays through the aperture and vaporizes in the evaporator coils, it draws heat out of the air. It then cycles back to be re-pressurized. An air conditioner fan circulates cool air from the evaporator coils into your home, but a heat pump fan circulates warm air from those coils.

Heat pumps have two parts, an outdoor unit and an indoor unit. The outdoor unit houses the compressor, a set of evaporative coils and a fan, while the indoor unit houses more condensing coils and another fan within an air handler. A hose that runs through the wall connects the coils in the indoor and outdoor unit. Smaller units have their own fans to heat individual rooms, which are called mini-splits.

What Is a Furnace?

Furnaces generate heat by burning fuel or passing electricity through a resistive element, which is different from how heat pumps operate. They’re usually located in the basement or utility room and produce heat circulated through a ductwork system by a blower housed in the air handler.

Every furnace has a heat source, heat exchanger, and a blower. Some fuel-burning furnaces have flues to exhaust combustion gases.

High-efficiency gas furnaces operate without flues as they recycle combustion gases to extract more heat and emit only acidified water through a PVC drain pipe. Though they turn nearly 100% of their fuel into heat, it’s still fossil fuel.

What to Consider with Heat Pumps vs. Furnaces

Heat Pump Efficiency Considerations

One of the key advantages of heat pumps is their efficiency. Unlike traditional heating systems that produce heat, heat pumps simply move it from one place to another. This makes them highly energy efficient, especially for moderate climates. However, their efficiency can decrease in extremely cold temperatures because there’s less ambient heat to extract.

The energy savings from heat pumps can be significant, however, resulting in lower utility bills over time. Some heat pumps have variable-speed compressors and advanced controls as well, allowing them to adjust their output to meet the heating requirements of your home and improve efficiency.

Furnace Efficiency Considerations

Furnaces with high-efficiency ratings can be quite efficient. However, their efficiency depends on factors like the type of fuel used and the design of the furnace itself. Modern furnaces often incorporate advanced features like variable-speed blowers and programmable thermostats that improve overall efficiency, but they are still burning fuel.

It’s worth mentioning that the cost of fuel can significantly impact the economic aspect of using a furnace. In areas where natural gas is readily available and affordable, a gas furnace can be a cost-effective heating solution. However, in regions where electricity is cheaper or more readily available, a heat pump is the more economical choice.


Heat Pump Environmental Impact Considerations

From an environmental standpoint, heat pumps are considered more eco-friendly than traditional furnaces. They move heat instead of generating it through combustion, so they produce fewer greenhouse gas emissions. Furthermore, if electricity used to power the heat pump comes from renewable sources, you can go a step further in reducing the environmental impact.

Furnace Environmental Impact Considerations

While modern furnaces are more environmentally friendly than their older counterparts, they still produce emissions through the combustion of fuel. Natural gas, a common fuel for furnaces, is considered cleaner burning compared to oil or coal. However, the overall environmental impact of a furnace depends on the source of fuel and efficiency of the combustion process.

Heat Pump Installation Cost Considerations

The installation of a heat pump involves placing outdoor and indoor units, connecting them through refrigerant lines, and ensuring proper ventilation. The cost can vary based on factors such as the type of heat pump (air source or ground source), the size of the home, and the local climate.

Ground-source heat pumps, also known as geothermal heat pumps, tend to have higher upfront costs due to the excavation required for ground loops. However, they often have lower operating costs and can be more efficient in extreme temperatures.

Furnace Installation Cost Considerations

Furnace installation typically involves setting up the furnace itself, ductwork, and ventilation systems. The cost can vary based on the type of furnace, such as gas, oil, or propane, the efficiency rating, and the complexity of the installation.

Generally, gas furnaces are more affordable to install than oil furnaces, and the existing ductwork in many homes is compatible with gas systems. Oil furnaces may require additional modifications, contributing to higher installation costs.

Heat Pump Climate Considerations

While heat pumps are highly efficient in moderate climates, their performance can decline in extremely cold conditions. Air-source heat pumps may struggle to extract sufficient heat from the frigid outdoor air, reducing their efficiency. In these cases, supplemental heating may be necessary, which may come from electric resistance heaters or another heating source.

Ground-source heat pumps are generally more efficient in colder climates since the ground temperature is more stable than the air temperature. However, they tend to have higher upfront costs.

Furnace Climate Considerations

Furnaces are well suited to colder climates, providing reliable and powerful heat even in the coldest winter months. Gas furnaces are popular in regions with access to natural gas and offer a cost-effective and efficient heating solution.

In cold climates where a heat pump may struggle, furnaces are the ideal choice. That said, the Palm Desert region is often moderate enough that a furnace isn’t necessary for most homes. It’s important to consider the environmental impact and operating costs associated with the type of fuel used.

Heat Pump Maintenance and Long-Term Cost Considerations

Heat pumps generally require less maintenance compared to furnaces. Regular tasks include cleaning or replacing filters, checking refrigerant levels, and ensuring the outdoor unit is free from debris. Since there is no combustion involved, there are fewer components that can wear out or malfunction.

Ground-source heat pumps require less maintenance on the outdoor unit, but they have intricate systems in the ground loops that may require more frequent inspections. To offset this, these systems often come with better warranties to give you peace of mind.

Furnace Maintenance and Long-Term Cost Considerations

Furnaces require more regular maintenance than heat pumps. This includes inspecting and cleaning the burner, checking for carbon monoxide leaks, and ensuring the ventilation system is functioning correctly. Regular professional inspections are essential to address any potential safety concerns.

While modern furnaces are designed for durability, the combustion process can lead to wear and tear on components over time. It’s important to consider the ongoing maintenance requirements and associated costs when choosing between a heat pump and furnace.

Federal Incentives and State Regulations

California residents have another consideration with heat pumps vs. furnaces. The High Efficiency Home Rebate Act (HEEHRA), which is part of the Inflation Reduction Act (IRA) passed by Congress in 2022, provides rebates up to $8,000 for installing a new heat pump system. If it’s time for an upgrade and a heat pump is a good choice for your home, this rebate can be beneficial.

Secondly, a recent vote by the California Air Resources Board is looking to ban the sale of new gas furnaces by 2030. It’s possible that other states may follow as well. There’s some time, but this should factor into your decision between a heat pump or furnace.

Which Heating System Is Right for You?

Choosing between a heat pump and a furnace is complex and depends on many factors, including climate, installation costs, energy efficiency, and long-term maintenance considerations. Each system has its advantages and disadvantages for different homeowners, so the best choice for you may not be the best choice for someone else.

If you live in a moderate climate, heat pumps are an excellent, energy-efficient choice. Colder climates with temperatures that drop below freezing regularly may be better off with a furnace. If you’re not sure what’s right for your home, consult with an HVAC professional for personalized recommendations.

Looking to upgrade to a heat pump or furnace? Contact us at Timo’s to schedule your consultation!

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