Heat pumps are becoming more popular due to their increased efficiency and dual purpose. According to Rocky Mountain Institute (RMI), heat pumps will account for 47% of refrigeration equipment sales in 2025, and from October 2025 to March 2026, heat pump sales even exceeded traditional air conditioning units for the first time.
Thinking about jumping on the bandwagon but aren’t sure if your home is a good candidate for a heat pump? The USA TODAY team asked the HVAC experts at ARS, a national HVAC installer, to help you decide.
Here, we’ll take a closer look at which regions are best suited for heat pumps and why.
What is a heat pump and how does it work?
The name “heat pump” is misleading, as this machine has the ability to both heat and cool your home. However, this name perfectly describes how a heat pump works. Unlike furnaces, heat pumps do not produce heat. They move it from one place to another.
- In the winter, heat pumps heat your home by extracting heat from the outside air and moving it indoors. This works even in cold climates.
- During the hot summer months, the heat pump works in reverse. A heat pump takes hot air from inside your home and pumps it outside.
Key factors determining heat pump performance
Heat pump performance is about more than just the model and efficiency rating. The factors that affect the operation of heat pumps are:
- climate: Heat pumps work in any climate, but they perform better in milder climates. As temperatures drop, so does the efficiency of heat pumps (although heat pumps still operate at higher efficiency than other types of HVAC systems).
- insulation: Even the most modern and efficient heat pump systems won’t keep your home cool if your walls aren’t properly insulated. Insulation is the main defense against heat entering and leaving your home, so poor insulation means your heat pump has to work much harder to maintain the temperature inside your home.
- Heat pump model: Newer heat pump models have superior technology to help keep your home cooler. “The technology in these systems is really amazing right now,” says Joey Dooley, general manager of ARS in Texas. “Before, you were basically limited to one or two stages, either low or high. Now we have systems available that have more precise capacity control, such as communication systems, variable speed systems, and variable speed compressors,” he says.
- Correct installation: A heat pump will not work properly if it is not set up properly first. Even if you buy the best and most efficient heat pump, “it still needs to be installed correctly,” says Scott Urquhart, ARS HVAC sales and customer experience specialist. “If we don’t, there will be problems.”
- Thermostat settings: Modern thermostats do more than just set the temperature in your home. You can also set timers, adjust your home’s temperature on the go, and recommend the right temperature to achieve your preferred energy usage. These settings help improve the operation of your heat pump.
- Your personal preference: If you prefer your home to be 65 degrees when the thermometer outside is reading 95 degrees, you can expect your heat pump to work harder and use more energy. While not uncomfortable, keeping your home’s temperature between 72 and 75 degrees when it’s unbearably hot outside can help your heat pump perform better and extend its lifespan.
Heat pumps in cold regions
Homeowners in northern climates have traditionally avoided heat pumps, believing they wouldn’t survive the cold.
But Steve Wade, senior director of operations and procurement at ARS, debunks that myth. Heat pump technology has advanced to become a viable, if not more efficient, option than traditional air conditioning and heating. Older heat pump models may not have been sufficient, but now the use of dual fuel (both electricity and natural gas) makes them suitable for all climates.
In cold climates, high-efficiency heat pumps can rely on supplemental heating (i.e., gas) even under extreme temperatures.
“Dual fuel is great,” Wade said. “They use electricity when it’s warm, but when they need more energy they switch to gas,” Wade said. This dual fuel capability makes heat pumps possible in colder climates like Chicago and Milwaukee.
Many homeowners think that simply installing a high-end or “premium” heat pump will lower their electricity bills. In reality, performance in cold climates is highly dependent on appropriate system size, installation quality, and equipment usage. Even the most expensive system can perform poorly if it doesn’t match your home’s insulation level or is too large.
Heat pumps in warm climates
For homeowners living in warmer climates like Florida, Texas, and Arizona, heat pumps are an obvious choice.
“It will be similar to a traditional air conditioning system,” Wade says. Heat pumps keep indoor temperatures low, but provide heat for several months of the year when needed.
Although heat pumps operate more efficiently in warmer climates, many of the same myths persist.
Homeowners often believe that paying more upfront will guarantee better energy savings. Wade points out that a higher-priced system doesn’t necessarily offer a meaningful improvement over a mid-range model if the efficiency gains are small. The real differentiator is how well the system matches your home’s cooling load and how consistently it maintains it.
Incentives and rebates by state
The Federal Energy Efficient Home Improvement Credit, which allows you to claim a tax credit of up to $3,200, expired on December 31, 2025. This means that the financial incentives for heat pumps are reduced.
Even in 2026, some states still offer tax incentives for installing energy-efficient systems like heat pumps. They include:
- new york: Up to $8,000 for heat pumps with EmPower+
- Maryland: Up to $15,000 for projects through EmPower Maryland and the state’s top energy providers
- Rhode Island: Up to $11,500 available to eligible homeowners through Clean Heat RI
- Colorado: Funding for select Colorado counties through the HEAR program
- Wisconsin: HOMES Projects can save you up to $5,000 on energy efficiency projects
This is by no means a complete list, so check with your state and local utility company for rebates, credits and other savings opportunities.
When not to switch to a heat pump
Heat pumps can be used in any region, but the costs may outweigh the benefits. When refurbishing a new heat pump, you can expect to incur high bills at the end of the project. So if cost is your main reason for not installing a heat pump, your reasoning may be spot on.
- Higher initial costs: Even if you don’t need new ductwork or other upgrades, the average price for a new heat pump is $13,000. New air conditioners cost between $3,000 and $15,000, but most are more affordable than heat pumps.
- Electrical upgrade: If you have an older home, ductwork and heat pumps are only part of the overall installation. Outdated electrical systems may need to be updated from 100 amp electrical panels to 200 amp panels, further increasing the cost of the project.
- Duct work: While not all types of heat pumps require ductwork (think ductless mini-splits), if you need whole-house heating and cooling, ductwork is required. This can easily cost thousands of dollars, making installation costs too high.
Other reasons for not installing a heat pump depend on your home and where you live.
- If you live in an area where gas prices are low, you may not save money by switching to a heat pump. If your electricity bill is high, you may end up spending even more energy.
- Areas that experience extreme cold may still require a gas-powered system to combat the temperatures. Heat pumps are more efficient, but may not be suitable for your home.
- An uninsulated home loses heat more easily, so the heat pump has to work harder to maintain the temperature inside the home. Upgrading your home’s insulation can solve this problem, but it can be expensive.
If you don’t plan on living in your home for a long time, you may want to reconsider purchasing a heat pump.
The bottom line is that they are expensive and you may not stay long enough to recoup your costs. However, even if it doesn’t directly impact your home’s value, a new heat pump may attract buyers.
“If one home has a newer, more efficient air conditioning system and another home has a system that appears to be at the end of its lifespan, the home with the better system is more attractive,” Dooley says. “I don’t know if that will increase the price of the domestic dollar against the dollar, but it will definitely increase favorability.”
Why are heat pumps expensive?
Using a heat pump may offer further energy cost savings, but requires a higher initial cost.
“We have added components that don’t exist in traditional air conditioners,” Wade says. This product is manufactured differently and uses more expensive copper components, increasing costs.
Installation costs may also add up to a higher total cost. Heat pumps often require careful sizing, potential electrical upgrades, and, in some cases, ductwork modifications and auxiliary systems to accommodate extreme temperatures. If you don’t already have one installed, you may also need a compatible indoor unit and thermostat.
Heat pump decision checklist
Not sure if a heat pump is right for you? Use this heat pump decision checklist to decide:
| We recommend using a heat pump in the following cases: |
|---|
| Live in a mild climate that does not experience extreme heat or cold |
| your home is moderately insulated |
| electricity bill is low |
| I want to combine heating and cooling into one system. |
| You may benefit from a heat pump if: |
|---|
| Although insulation is in place, the house is still drafty. |
| There are only a limited number of installers in your area, so you won’t be able to get multiple quotes. |
| Electricity bill is average |
| you don’t live in a frigid climate |
| A heat pump may not be ideal if: |
|---|
| There is cheap natural gas |
| electricity bill is high |
| Installation costs are too high to save money |
| Air conditioning and heating equipment are already installed |
