It’s Not Magic, It’s Efficiency

A consumer’s guide to heat pump systems

By Megan McKoy-Noe, CCC

It’s Not Magic, It’s Efficiency

Magicians may pull rabbits out of hats, but many homeowners perform captivating acts of their own by taking natural heat and cooling power from air and earth and transforming it into conditioned comfort. Yet this act doesn't involve any sleight of hand trickery: it simply requires a heat pump.

Heat pumps move heat into residences during winter and out of them in summer, trimming overall home heating and cooling costs by as much as 40 percent, according to the U.S. Department of Energy (DOE). In a national study, the Cooperative Research Network (CRN), a division of the National Rural Electric Cooperative Association that monitors, evaluates and applies energy technologies, revealed 11 percent of homes use a heat pump as their primary heating/cooling system. For all-electric homes this jumps to 29 percent.

Different heat pumps succeed in specific regions. Air-source heat pumps work well in the Southeast, where temperatures rarely drop below freezing. In colder climates geothermal heat pumps shine because their heat source remains shielded — the top 10 feet of earth consistently measures between 50 to 60 degrees Fahrenheit.

A heat pump system can deliver value to your home if the model used matches your region and if it's installed properly. Here's a guide to three different types of heat pumps.


Outside temperatures may vary, but the earth's temperature remains steady year-round and can be harnessed to make homes comfortable. According to DOE, geothermal heat pumps offer energy savings between 30 and 60 percent annually when compared to conventional baseboard or radiant heating systems, and are typically the most efficient heat pump option.

Geothermal heat pumps move a liquid or water through pipes buried in the ground, then into a home. Also called ground-source heat pumps, there are two types of units: a groundwater (open-loop) system uses well or pond water, while an earth-coupled (closed-loop) model uses a water and antifreeze solution. Systems can be installed horizontally or vertically, depending on available space.

Geothermal efficiency depends on climate, soil and water conditions, and landscaping. For example, soil that transfers heat easily requires less piping. Rocky terrain may require a vertical loop system instead of a more economical horizontal loop system.

When buying a geothermal system, compare two elements: coefficient of performance (COP) for heating, and the energy efficiency ratio (EER) for cooling. Energy Star-qualified models must provide a rating of at least 3.3 COP and 14.1 EER.


Air-source heat pumps use a system of coils to evaporate a refrigerant and, with it, draw heat away from a home, cooling the air. In winter the magic reverses with the flip of a valve, and your home heats.

The system delivers up to three times more heat energy than electricity consumed, but is not perfect. Air-source heat pumps often do not fare well in regions with sub-zero temperatures. A back-up system of electric resistance coils kicks-in when air temperatures dips below 40 degrees Fahrenheit, but this method of heating — similar to a toaster — isn't energy efficient, costing more to operate than traditional heating systems. Some air-source heat pump systems, notably reverse cycle chillers (RCC), offer heating alternatives to keep homes efficiently comfortable at lower temperatures — they store heat in an insulated tank of water. Others include gas-fired backup furnaces, also increasing their winter efficiency.

When shopping for an air-source heat pump, compare the seasonal energy efficiency rating (SEER) for cooling prowess, and heating seasonal performance factor (HSPF) for compressor and heating element strength. Energy Star models guarantee a SEER of 14 or more and a HSPF of 8 or more. For warmer climates, SEER is more important than HSPF; in colder climates find a system with a high HSPF.


In a twist of a classic magic trick, duct­work funneling conditioned air to different rooms can cause some air to "disappear"— which could waste from 15 to 20 percent of the energy used to heat or cool the air. While sealing air ducts and proper insulation helps, another option is to bypass ducts with a ductless version of an air-source heat pump (DHP), also called a "mini-split" heat pump.

Small and versatile, ductless heat pumps have two main parts: an outdoor compressor/condenser and one or more indoor air-handling units. These components are linked by a cable (refrigerant line). Many systems offer up to four indoor units to condition different rooms, and some systems come with wireless remotes or wall-mounted control units.

According to CRN, these devices use an estimated 50 to 60 percent less energy than electric resistance for heating. DHPs are ideal for room additions where ductwork may not be possible, or for homes with "non-ducted" air conditioning such as window units. Indoor models can be mounted in the ceiling, hung on the wall or placed on the floor.

DHPs are costly — 30 percent more expensive than traditional central air systems (not including ductwork). Installation can also be tricky — if a system is too big for the space, energy will be wasted and the correct temperature may not be reached.

Innovation boosts efficiency

Heat pump technology isn't new — geothermal has been used since the 1940s — but innovations are improving performance and efficiency.

Dual-source heat pumps combine geothermal systems and air-source technologies. Though not as efficient as true geothermal systems, the device costs less than putting in a geothermal system and avoids some of air-source's pitfalls during cold weather.

Another technology advancement, two-speed compressors, condition the desired amount of air (heating or cooling capacity) needed at different times — standard compressors only operate at full capacity. Having this option reduces compressor wear and saves energy.

With all heat pumps, compressor design further enhances performance — a scroll compressor offers quieter operation and provides 10 to 15 degrees Fahrenheit of warmer air in heating mode, when compared to systems with traditional piston-driven compressors.

Some heat pumps offer variable-speed or dual-speed motors for fans (indoor and outdoor) that minimize drafts and keep air flowing at a comfortable rate.

Rebates and tax credits

Although heat pumps are more expensive than traditional air conditioning, rebates and tax credits can help cut the cost. A federal tax credit equal to 30 percent of the cost for materials and installation, with no limit on total project expenses, applies to geothermal heat pumps through Dec. 31, 2016. A list of requirements can be found at

North Carolina offers a tax credit through Dec. 31, 2015, of up to $8,400 for geothermal heat pumps used for non-business purposes. To find more North Carolina energy-related incentives, check the Database of State Incentives for Renewables and Efficiency at

North Carolina also offers a sales tax exemption on Energy Star-qualified air-source heat pumps during the first weekend of November.

Some electric cooperatives offer both rebates and low-cost loans for qualified heat pump installations. Contact your cooperative for more information.

Sources: U.S. Department of Energy, National Renewable Energy Laboratory, Geothermal Energy Association, International Ground Source Heat Pump Association, 2010 CRN Residential Appliance and Equipment Survey

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About the Author

Megan McKoy-Noe, CCC

Megan McKoy-Noe, CCC, writes on consumer and cooperative affairs for the National Rural Electric Cooperative Association, the service organization for the nation’s 900-plus consumer-owned, not-for-profit electric cooperatives.

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