Air Source Heat Pump Buying Guide - Save on Energy

How do air source heat pumps work?

Air source heat pumps are the most common heat pump choice for residential heating and cooling. Here’s how they work.

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A typical air source heat pump is made up of an outdoor unit connected to an indoor unit by a refrigerant line. In the winter, the outdoor unit draws in air, absorbs its heat and transfers it to a refrigerant fluid. A combination of temperature and pressure transforms this fluid into a gas. The gas then passes through a compressor to increase its temperature further, and the resulting heat is transferred into your home, either directly from the unit or through ductwork.

This process reverses in the summer. The heat pump absorbs heat from inside your home and transfers it to the outdoors, becoming a high-efficiency air conditioner and dehumidifier.

What’s involved in making the switch?

Installing a heat pump is more complex than simply replacing your existing furnace, boiler, baseboards, or other HVAC system. It may involve modifying ductwork and wiring, as well as finding space for an outdoor condensing unit.

If you live in an older home, you should install other energy-efficiency measures first to reduce your heating load. This could include new insulation, air sealing and more. By limiting heat loss from air leaks or thin insulation, you’ll get the most out of your heat pump and may even be able to opt for a smaller, more affordable unit.

Ducted or ductless?

A ducted heat pump works in a similar way to a central furnace. It’s connected to interior ductwork and controlled by a central thermostat. Warm or cool air travels through the ducts and into your home.

A ductless heat pump emits warm or cool air directly from an indoor unit mounted to the wall or floor. Depending on the size and layout of your home, you may need more than one indoor unit.

You might want to opt for a ductless heat pump if you:

• Live in a home with no existing ductwork.
• Want to have flexibility in heating and cooling in multiple areas of your home.
• Need supplemental heating and cooling in a particular area, such as a home addition.

Standalone or hybrid?

As the outside air temperature drops, the heat pump has to work harder, gradually reducing its efficiency and heating capacity. Some homeowners opt for hybrid systems, with a conventional furnace or boiler acting as a backup to a primary air source heat pump. Some choose to install cold climate air source heat pumps, which are specially designed to work in low outdoor temperatures.

The choice of whether to select a standalone or hybrid HVAC system will be dependent on several factors, such as climate, energy costs, heat loss and home type. A licensed HVAC contractor can help assess your home and identify the most energy-efficient and cost-effective solution for you.

Single stage, two stage or variable stage?

A single-stage heat pump is the most basic system available. It uses a simple on/off cycle that is triggered when the temperature dips below a set point. It tends to be the most costly type of heat pump to run, as the only setting is full speed.

A two-stage heat pump has two settings—high and low—allowing for slightly more precise temperature control.

A variable-stage heat pump is the most advanced system available. It is able to monitor and adjust to a full range of speeds to maintain the desired indoor temperature. Since it only uses as much power as it needs, it is the most energy-efficient option.

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How to find the right contractor

Replacing your home's HVAC system is a big undertaking. If you’ve decided a heat pump is the right choice for you, the next step is finding a qualified, licensed contractor. They can help you make the best purchasing decision for your home to meet your needs. In Ontario, HVAC contractors must be registered with the Technical Standards and Safety Authority.

What is the best air source heat pump system type to choose? 

The best type of air source heat pump (ASHP) for your home depends on many factors, including your existing heating and cooling set up, the fuel you use for heating, and your goals for the system. This post breaks down some questions you will want to ask yourself as you plan for an ASHP, and how the answers will impact your ASHP choices. Always make sure to check with your contractor or heat pump installer to see if the selected ASHP model qualifies for federal, state, utility, and local incentive programs that will save you money upfront. In addition, check with your utility to see if they offer special electric rates that might lower the operational cost of the system. 

Does your home have ductwork? 

Whether or not your home has ductwork is a key factor to determine which ASHP is right for you. ASHPs come in two broad categories: ducted and ductless. Like a central air conditioner or forced air furnace, ducted ASHPs use ductwork to distribute conditioned air throughout the home. This makes them a good fit for homes that already have ductwork in place. A ducted heat pump can replace a central air conditioner to provide cooling during the summer months and heating during some or all of the winter season.  

Ductless heat pumps are commonly called mini-splits and do not need ductwork to distribute conditioned air. Instead, ductless heat pumps directly condition the air of a room or area with an indoor head or cassette typically mounted high on a wall, ideal for homes that are heated by a boiler or electric baseboards and do not have existing ductwork.  

What’s your secondary heating source? 

Most homes in Minnesota with an ASHP need a secondary source of heating to maintain a comfortable temperature on very cold days. Heat pumps’ capacity to supply heat gradually diminishes as the temperature drops, so a secondary heating source maintains the thermostat setpoint when the temperature dips below a certain point. In some cases, your home’s existing heating system can be left in place to serve this purpose. Dual fuel systems feature an ASHP that covers all the cooling and part or most of the heating before switching to a natural gas or propane secondary system. Another option is an all-electric system, in which the ASHP covers all the cooling and nearly all the heating with electric resistance heating as a supplemental source in very cold weather.  

Ducted ASHPs are typically installed with a forced air furnace (for a dual fuel system) or an air handler with electric resistance backup (for an all-electric system). Like a central air conditioner, a heat pump can be controlled by the same thermostat as the furnace or electric resistance heating. With a dual fuel system, the home’s heating source automatically switches from the ASHP to the secondary heating system at a set outdoor temperature, called the switchover temperature. Switchover temperatures are typically set by a contractor based on the ASHP’s efficiency and size and the prices of electricity and gas. Some ASHPs are designed to integrate with any existing furnace.  A quality contractor will quote you options that are feasible for your setup. With an all-electric ducted system, electric resistance booster heating automatically turns on to supplement the ASHP during the coldest days of the year when the ASHP alone cannot deliver sufficient heat. 

Ductless systems typically operate independently of the home’s secondary heating source. Most indoor units have their own thermostat and are individually controlled rather than integrated with existing thermostats for a boiler or electric baseboards. Most homeowners with this type of system set the thermostat for their boiler or baseboards a few degrees cooler than the thermostat for the ASHP system when they want the ASHP to take on most of the heating load.  

Should you choose a cold-climate ASHP? 

The term “cold climate” is used to describe ASHPs that can perform well at below freezing (and even sub-zero) temperatures. Cold climate ASHPs have a high efficiency at five degrees Fahrenheit, maintain heating capacity at lower temperatures, and feature a variable-speed compressor. Variable-speed ASHPs can modulate their operation to best meet a home’s heating and cooling needs with less energy than a lower performing unit that can only turn on or off. Choosing a cold climate ASHP over a lower performing unit depends on the type of heating fuel you use and your goals for the ASHP. Variable-speed or cold climate heat pumps are a good fit for customers who:

• Are interested in fuel flexibility. For natural gas customers, a dual fuel heat pump with a moderate switchover temperature is typically the most cost-effective option at current natural gas and electric rates. However, a variable-speed ASHP with increased capacity at colder temperatures offers fuel flexibility and resilience to the potential volatility of natural gas prices. The homeowner can adjust the system’s switchover temperature in the future to optimize savings as fuel prices change over the lifetime of the equipment.  
• Have an expensive heating fuel. Center for Energy and Environment field research found that installing a variable-speed ASHP saved 30% on heating costs over a propane furnace and AC and 50% over electric resistance heating. You can read more about the benefits of ASHPs for propane customers here. 
• Want to decarbonize as much as possible. The performance of variable-speed ASHPs at cold temperatures means the ASHP can run for longer before switching to a fossil fuel secondary system or an expensive electric resistance backup heat. You can read more about how to balance operating costs and carbon emissions reductions here. 

The increased performance of a variable-speed ASHP does come with a higher price tag. However, current and future incentives like utility rebates, tax credits, federal and state rebates, and local cost-share programs can all be stacked together to greatly reduce upfront costs. Many of these programs require heat pumps to meet certain efficiency metrics, which means that variable-speed, cold climate equipment is more likely to qualify for a larger incentive. Always make sure to check with your contractor or heat pump installer to see which federal, state, utility, and local incentive programs are available to you. They will help you make sure your heat pump model meets the specification requirements to qualify for each rebate or tax credit and can even help you fill out the rebate paperwork. 

Single and two-stage ASHPs are also widely available in the market. These do not modulate like a variable-speed ASHP and are mostly used for heating only in the shoulder seasons. A single-stage unit can only turn on or off. A two-stage unit can operate at a high speed and a lower speed. Single- and two-stage ASHPs are a good option for customers whose biggest priority is minimizing upfront cost and aren’t looking for better energy efficiency and performance than a standard air conditioner, especially if they heat with natural gas. Some single or two-stage ASHPs will still qualify for rebate or tax credit programs, but the incentive amount will be less than for a more efficient ASHP. Contractors or heat pump installers can help you determine what models may qualify.  

Bottom line, when requesting quotes from contractors, you'll want to let them know your motivations for installing the new system, so they can help you select the right equipment for your needs and goals.   

For more information about different ASHP system types, visit our homeowner FAQ page and our ASHP buying guides. If you are interested in installing an ASHP, visit our Preferred Contractor Network for a list of trusted contractors in your area that can provide quotes. If you have further questions, you can contact us at . 

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