Environmental and Economic Advantages of Switching to an Electric Heat Pump

August 12, 2021
  |   1 Comment

As Montgomery County seeks to cut its greenhouse gas emissions drastically over the next decade, homeowners may be wondering what significant actions they can take to contribute towards the county’s goals. One of the most effective ways Montgomery County residents can contribute to these goals is to electrify their home appliances and systems. Thankfully, technology exists today that can replace heavy-emitting home heating and cooling systems. For climates with moderate heating and cooling needs like Montgomery County, heat pumps offer an energy-efficient alternative to furnaces, boilers, and air conditioners.

During the heating season, heat pumps move heat from the cool outdoors into your warm house, and during the cooling season, heat pumps move heat from your cool house into the warm outdoors. Because they move heat rather than generate heat, heat pumps can provide equivalent space conditioning for as little as one-quarter of the cost of operating conventional heating or cooling appliances.

Today’s heat pumps can reduce electricity use for heating by approximately 50% compared to electric resistance heating, such as furnaces and baseboard heaters. High-efficiency heat pumps also dehumidify better than standard central air conditioners, resulting in less energy usage and better indoor comfort in the summer months.

Read on to learn more about:

  • How heat pumps work
  • Different types of heat pumps available for your home
  • Benefits of switching to a heat pump
  • Costs to replace your heating and cooling systems
  • Understanding heat pump efficiency
  • Incentives available for switching to a heat pump

How do heat pumps work?  

A heat pump is a device that moves heat from one place to another, working much like an air conditioner (AC) or a refrigerator, but uses the difference between outdoor and indoor air temperatures to cool and heat your home. Like your refrigerator, heat pumps use electricity to move heat from a cool space to a warmer space, making the cool space cooler and the warm space warmer.

Taking advantage of the tendency of warm air to move to cold areas, a heat pump uses a refrigerant to gather heat from the outside air or the ground and move it to your living space. By contrast, a furnace or boiler works by burning fossil fuels to heat a medium—water or metal—used to heat the living space. That extra step reduces the efficiency of boilers and furnaces compared to a heat pump: while heat pumps have an average annual efficiency of nearly 300%, most boilers and furnaces sold today are 85% to 90% efficient.

What are the main types of heat pumps?  

There are three main types of heat pumps to consider for your home, including an air-source heat pump, a mini-split heat pump, and a ground source (geothermal) heat pump. Read on to determine which type best suits your home and energy needs.

Air-source heat pumps (ASHPs) are the most common type. Using a compressor, an air-source heat pump takes heat from the air and boosts it to a higher temperature. For every unit of energy used to extract heat from the air, it typically outputs three times more as heat, meaning ASHP efficiency is around 300%!  

SHPs look like air-conditioning units, with their size depending on the amount of heat needed to generate for your home – the more heat, the bigger the heat pump. An air-to-air heat pump can operate in reverse in the summer, which means you can use it like an air-conditioning unit to provide cool air for your home. Installing an ASHP is less disruptive than a ground-source heat pump installation, especially if you are retrofitting. Since little outdoor space is required to install, an air-source heat pump system is suitable for most urban properties.

In general, an ASHP will last about 15 years, although the lifespan of your heat pump largely depends on how well it is maintained and the type of climate your heat pump is situated.

A new, high-efficiency mini-split heat pump delivers warm or cool air directly into different zones of your home, allowing you to avoid the energy losses associated with the ductwork of central forced air systems. Ductless mini-split systems are easier to install than some other types of space conditioning systems. For example, the hook-up between the outdoor and indoor units generally requires only a three-inch hole through a wall. The indoor air handlers can be suspended from a ceiling, mounted flush into a drop ceiling, or hung on a wall, offering greater interior design flexibility for your home. These systems last between 10 and 16 years, with an average of 14 years.

Since mini-split heat pumps have no ducts, they also avoid the energy losses associated with the ductwork of central forced air systems. Duct losses can account for more than 30% of energy consumption for space conditioning, especially if the ducts are in an unconditioned space such as an attic. Like other heat pumps, mini-split heat pumps can cost-effectively replace baseboard electric heating and window AC units.

Geothermal heat pumps, or ground-source heat pumps, are similar to ordinary heat pumps but use the ground instead of outside air to provide heating, air conditioning, and, in most cases, hot water. Compared to standard heating and cooling equipment, geothermal heat pumps can use up to 65% less energy.  Because they use the earth’s natural heat, they are among the most efficient and comfortable heating and cooling technologies currently available. As such, the U.S. Environmental Protection Agency (EPA) calls geothermal heat pumps the most efficient, environmentally clean, and cost-effective system for heating and cooling.

They work by converting stored thermal energy in the earth to heating and cooling for homes and businesses. The systems require drilled wells, piping loops, and efficient heat pumps to transfer heat between wells and homes or businesses. Ground-source heat pumps are generally more efficient than ASHPs, but they may be more suitable for larger residential properties since they require underground pipes.

Geothermal heat pump systems have an average 20+ year life expectancy for the heat pump itself and 25 to 50 years for the underground infrastructure. Find more about how ground-source heat pumps work here.

Benefits of Switching to an Electric Heat Pump 

Heat pumps are 3 to 4 times more efficient than furnaces. For the average house, installing electric heat pumps in place of a gas furnace and gas water heater will reduce heating emissions by more than 45% over the next ten years. How much CO2 you will save depends on the fuel you are replacing: the figure will be higher if you replace an oil boiler rather than natural gas.

Heat pumps are approximately three times as efficient as electric resistance heating, which means you could lower your heating consumption by two-thirds. A heat pump can save you up to 30 percent on your heating and cooling bills, particularly if your furnace was installed before 1992 and uses a pilot light.

The Northeast Energy Efficiency Partnerships found that the annual savings when using an air-source heat pump in the Northeast and Mid-Atlantic regions are around 3,000 kWh (or $459) compared to electric resistance heaters and 6,200 kWh (or $948) compared to oil systems. When displacing oil (i.e., the oil system remains but operates less frequently), the average annual savings are near 3,000 kWh (or about $300).

Heat pumps do not directly use combustion to generate heat- there are no carbon emissions other than those created at the point of electricity production. Electric heat pumps can even improve the indoor air quality in your home. As heat pumps do not burn anything to create heat, they do not produce any smoke or add fumes to the air. As your heat pump circulates the air in your room, the filters clean and purify the air, removing dust, mold spores, odors, smoke, and other particles.

Cost of a Heat Pump Replacement 

The cost of a heat pump replacement can range between $4,900 and $12,500. This range accounts for the cost of the equipment, labor, and other fees. The range also covers various system sizes and levels of sophistication, including variable-capacity heat pump systems.

The factors that can affect the price of your heat pump replacement include:

  • Capacity/power of the system
  • Efficiency
  • The HVAC equipment that you are replacing
  • Modifications to your existing system
  • Line set protection
  • Installation costs
  • Tax credits and rebates
Type Unit Cost Installation Cost
Air-Source $2,000–$5,500 $1,300–$2,000
Geothermal $3,000–$6,000 $10,000–$30,000
Ductless Mini-Split $1,000–$3,500 $500–$1,500
Gas-Fired Heat Pump $3,000–$6,000 $1,300–$2,000

 

Understanding Heat Pump Efficiency

Because heat pumps act as both cooling and heating systems, they typically receive separate ratings for their heating and cooling functions. Generally, cooling systems in the U.S. are rated by the seasonal energy efficiency ratio (SEER) which is the cooling output during a typical cooling-season divided by the total electric energy input during the same period. The higher the unit’s SEER rating the more energy efficient it is. Conversely, heating seasonal performance factor (HSPF) is used to measure the ratio of heat output over the heating season to electricity used (in watt-hours). Like SEER, the higher the unit’s HSPF rating, the more energy efficient it is.

These measurements are used to determine the efficiency of air-source heat pumps and mini-split heat pumps. In the U.S., the minimum federal HSPF rating for all units is 7.7. To earn an ENERGY STAR label, a heat pump achieves at least 8.5 HSPF (for mini-split heat pump systems) and 8.2 HSPF (single-phase heat pumps). There are some models with 10 HSPF or higher, so check to ensure your heat pump system has a high HSPF.

The Department of Energy has established 14 SEER as the minimum allowable cooling efficiency for residential, air-source, split-system heat pumps. Models rated at 18 SEER and above ae considered highly efficient heat pumps. Some of the highest efficiency ASHPs are rated at up to 20.5 SEER. Remember, greater energy efficiency translates to more money saved in electricity costs over the duration of the system’s lifetime.

For geothermal systems, Coefficient of Performance (COP) is the measurement used to determine how effectively a heat pump uses electricity to move heat from place to place. Specifically, the CoP of heat pump units is the ratio of the heating and AC output (how much heating and cooling it delivers) to the energy used to power the heat pump. It compares how much heat energy is moved to how much is used. The higher the CoP, the more efficient the heat pump operates. There are several factors that affect heat pump CoP, including the type of heat pump, size, and how hot or cold it is outside.  A CoP of 3.5 or higher is considered to be highly efficient.

Federal, State, and Local Incentives for Heat Pumps 

While the installation costs of an electric heat pump may be expensive, there are several federal and local incentives available for homeowners to upgrade their heating and cooling systems to a heat pump:

There are renewable energy federal tax credits offered for homeowners who install geothermal heat pumps in existing homes and new construction:

  • 30% for systems placed in service by 12/31/2019
  • 26% for systems placed in service after 12/31/2019 and before 01/01/2023
  • 22% for systems placed in service after 12/31/2022 and before 01/01/2024

There are also tax credits for air-source heat pumps up to $300 extended through the end of 2021 for existing homes.

In Maryland, the BeSMART Energy Efficiency Loan for homeowners provides financing to improve the energy efficiency of their homes for several projects, including the installation of geothermal heat pumps. For a variety of home energy efficiency upgrades, up to $30,000 in financing is available for a term up to 10 years. The Maryland Energy Administration (MEA) is currently developing their 2022 programs but have previously offered grant programs for geothermal heat pumps.

Locally, the Montgomery County Green Bank’s Clean Energy Advantage Program provides Montgomery County homeowners with access to financing for both geothermal and air-source heat pumps, among other clean energy technologies. Montgomery County residents can take advantage of this flexible financing option and find participating contractors here.

Conclusion 

Heat pump technology has seen significant advancements in recent years and offers homeowners a quick way to reduce GHG emissions from their homes. If you are considering making energy efficiency upgrades to your home’s heating and cooling systems, an electric heat pump can offer significant energy and cost savings, in addition to environmental benefits. Although the initial cost of installing specific heat pumps (particularly geothermal) can be higher than other heating and cooling systems, their lower operating costs, rebates, and other financial incentives can help offset the initial expense. There are several heat pumps to choose from, and your individual priorities will help you choose the system that is best for your family and budget. Make sure to check for updates to local, state, and federal incentives that can help reduce the costs of installing your new heating and cooling system.

For more ideas on making sustainable choices in your home that are good for the climate, visit My Green Montgomery’s Projects & Incentives page.

Written by Matthew Stovall and Cheng Guo, Montgomery County Climate Planning Team Interns, Summer 2021. 

 

 



One comment on "Environmental and Economic Advantages of Switching to an Electric Heat Pump"

  1. The cost of a heat pump replacement can range between $4,900 and $12,500. This range accounts for the cost of the equipment, labor, and other fees. The range also covers various system sizes and levels of sophistication, including variable-capacity heat pump systems.

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