Heat pumps have been a viable option for heating and cooling for many years, but they are now becoming a leading solution for decarbonization due to their efficiency and ability to reduce greenhouse gas emissions. By transferring heat rather than generating it, heat pumps offer a sustainable way to decrease energy consumption. As America transitions from traditional heating and cooling systems to heat pumps, it is vital to prioritize equity. Although heat pumps can result in significant energy savings, they can sometimes lead to higher utility bills, particularly in regions with low natural gas prices and high electricity costs, like in parts of the Midwest. We must adopt an inclusive approach to decarbonization that ensures all communities, including those historically excluded, can benefit from the advancements in heat pump technology without bearing undue financial burdens.

We’ll start the first of this two-blog series by exploring the various residential heat pump options available. 

Understanding Residential Heat Pump Options 

When deciding on the best heat pump solutions for different households, it is essential to understand the different types and configurations available.

Types of Residential Heat Pumps

Heat pumps come in a variety of types and configurations. Each type offers unique features that can be tailored to suit different home designs, existing heating and cooling systems, occupant preferences and financial considerations. Choosing the right type of heat pump system is crucial for ensuring efficient operation and minimizing utility bills, especially for customers from underserved or under-resourced communities. Below are the main categories of heat pumps and their features:

• Air Source Heat Pumps are the most common type of residential heat pump. They work by extracting heat from the outside air to provide heating and releasing heat to the outside air to provide cooling. This makes them effective for both heating and cooling in various climates. Cold climate air source heat pumps are a specialized version designed to efficiently heat homes in extremely cold conditions (typically at or below 5°F) while also providing cooling during warmer seasons. Many energy efficiency programs offer rebates and incentives for air source heat pumps, increasing their affordability for historically marginalized communities. In some cases, utility programs may even cover the full cost of a new system for income-eligible customers.
• Geothermal Heat Pumps (also known as ground source, geo-exchange, water-source or earth-coupled heat pumps) use the stable temperatures of the ground or nearby water sources to heat and cool homes. Unlike air-source heat pumps, geothermal systems rely on consistent temperatures below the earth's surface, which are cooler than the air in summer and warmer in winter. This reliability makes geothermal heat pumps a dependable source for heating and cooling, offering substantial long-term energy savings despite higher initial costs. They are ideal for areas with extreme temperature fluctuations and can become more affordable for low-income customers through rebates and financial incentives.
• Gas Heat Pumps (also called absorption heat pumps) operate using gas or propane to generate heat and offer a more efficient alternative to traditional gas heating systems. Unlike conventional gas heaters that generate heat through combustion, gas heat pumps transfer heat from one location to another using a refrigeration cycle. This process can deliver more heat energy than energy consumed, making them significantly more efficient than conventional gas heaters. This efficiency is particularly valuable in colder regions where electricity may be less reliable or more expensive. By using gas more effectively than traditional gas heating systems, gas heat pumps can offer a more stable and cost-effective heating solution. This makes them a viable option for low-income households, especially when supported by financial assistance for upfront costs.
• Hybrid Heat Pump Systems (also known as dual fuel systems) pair an electric heat pump with a natural gas or propane-fired system, such as a gas furnace. This setup provides users with the flexibility to select the most suitable energy source based on current prices and outdoor temperatures, offering both efficiency and potential cost savings. While heat pumps may experience a reduction in efficiency at extremely low temperatures, they remain effective, and the ability to switch to natural gas—particularly in regions like the Midwest where it is more affordable—helps manage electricity costs. This adaptability is especially beneficial for households seeking greater control over their utility bills.

When selecting a heat pump system, it is important to consider the different distribution options for transferring heat to and from a home, as well as the associated installation costs for each option. The different distribution options available for residential heat pumps include: 

Evaluating which heat pump system will be the most cost-effective is essential for low-income households. For example, contractors should consider if adding new ductwork to a home is necessary or if a ductless system would be more economical. It may be possible to reuse pipes and emitters from an existing hydronic distribution system instead of installing new ductwork or multiple indoor ductless units. By considering these different types of heat pumps, their possible configurations, and the cost differences between each setup, contractors and program administrators can ensure customers choose the best system to meet their needs while maximizing efficiency and affordability.

Conclusion

Each heat pump system presents opportunities and challenges for reducing energy consumption and utility costs.  Selecting the right system for the customer—whether air source, geothermal, gas or hybrid—can help low-income households achieve both comfort and affordability. Understanding these options is crucial for ensuring an equitable transition to heat pump technology. Another key part of this purchasing decision, especially for under-resourced communities, is to understand cost effective strategies for finding the best heat pump solutions for households in under-resourced communities as well as managing upfront costs and potential bill impacts to ensure equitable access and benefits. 

Read the second blog of this two-part series here. 

Looking for Midwest-specific insights? Check out this factsheet to learn about the energy savings, environmental benefits, and incentives available for heat pumps in the region. Read the factsheet here.