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Air Source Heat Pump Buying Guide - Save on Energy

Jun. 23, 2025
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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.

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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.

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.

Heat Pump Buying Guidance for the Everyday Consumer

Taking the first step to replace your home’s heating and cooling system can be overwhelming. For one, it’s your home – no one wants to feel uncomfortable in their living space and it can be a scary thought to make a wrong decision. For two, no two homes are exactly the same – there are many factors that leave consumers confused when deliberating the “right” type of heating system for them, especially when it comes to heat pump technology. They ask multifaceted questions, like “How do I know if I’m a good candidate for a complete system replacement? How do I stop using fossil fuels to heat and cool my home? I just built a new home, does that make a difference? Who should I contact for installation, and how can I save money?”

Here at NEEP, we recognize these concerns. While decarbonization at the state and regional level is critical to our organizational mission, providing everyday consumers with knowledge about their residential energy options mustn’t be overlooked. If anxiety is preventing eligible homeowners from considering alternatives to their propane, oil, or natural gas heating system, then we see an obligation to address those uncertainties.

Fortunately, we have some assistance to offer. NEEP is currently developing a Heat Pump Consumer Buying Guide, which is on track to be published and available for public use by January, . This document will offer an introduction to air-source (as well as ground-source to an extent) heat pumps, and will help everyday consumers navigate through considerations for replacement or displacement of their current system. The guide will also walk through optimal applications for various system configurations on the market today, and will provide some instructions for identifying a quality contractor plus available rebates in one’s area – to help move towards the end goal of making a purchase.

We’re excited to announce that this buying guide has a different approach to aiding and educating consumers. First and foremost, we appreciate that heat pump nomenclature resonates with some people better than others. That’s why this buying guide will have two parts: the first will offer a high-level overview of heat pump technology with some basic insight into operating cost and efficiency – a “heat pump 101”, if you will. The second part will be more focused on making the purchase, or an in-depth guide to selecting and following through with a specific system – for those who may have already done their homework but aren’t sure how to continue.

If we can help a consumer decide whether a new air-source or ground-source heat pump is right for them, then we feel we’ve done something right. Access to equipment replacements and available incentives shouldn’t be a privilege of the few, but an option for the many. With financial and technological advancements promoting the feasibility of heat pumps in cold climates, there is untapped potential in electric space heating solutions – and consumers deserve to know.

In fact, consumer education and awareness is one of the seven identified market barriers in NEEP’s Northeast/Mid-Atlantic Air-Source Heat Pump Market Strategies Report. Tackling this barrier includes dispelling the notion that ASHPs aren’t viable in the Northeast, and aggressively bridging information gaps to facilitate a higher number of installations. That’s why we try to go a little deeper in this buying guide, with considerations such as, “Where do consumers go after making that first step of deciding to explore ASHP options? In addition, what questions do they want answered?”

To help us think, we convened 20 experts from state offices, energy solutions groups, and community organizations who have experience helping consumers overcome the technical barriers of heat pumps. By bringing more perspectives to the table, we hope to expand the utility of this guide and make it relevant not just for HVAC connoisseurs, but for everyday consumers throughout the entire Northeast.

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