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Heat Pump Installation & Buying Guide: Types of Heat Pumps, the Average Cost of Heat Pumps, Buying Tips, and Installation Basics

Heat Pump Installation & Buying Guide: Types of Heat Pumps, the Average Cost of Heat Pumps, Buying Tips, and Installation Basics

Heat pumps are an excellent choice to provide year-round heating and cooling comfort to your home. They are extremely energy-efficient, and can reduce monthly heating costs by up to 50% depending on individual circumstances. A heat pump can be used as the sole heating source for your home, or to provide supplemental heating. They can also provide domestic hot water heating and air conditioning, depending on the model. This helps cut down on added energy costs and allows homeowners to reclaim space in their utility room.

Some sources estimate the average lifespan of a heat pump between 10 and 15 years, while others estimate an expected lifespan of 15-20 years. Some ground-source models can last as long as 20-25 years. If you're looking for a durable home heating system that will help you cut down on home energy costs, installing a heat pump may be the right choice for your home.

Types of Heat Pumps

There are a few different types of heat pumps to consider, and the best choice for your home depends on factors such as climate, desired savings, whether you plan to use a heat pump as a primary or supplemental heat source, and other considerations.


Air-source heat pumps work to heat and cool the home by drawing heat from the outside air during winter, moving it indoors and rejecting it outside during summer months. There are two main types of air-source heat pumps: air-to-air and air-to-water. Converting your home’s heating system from an electric furnace to an all-electric air-source heat pump can reduce energy costs by up to 50%. They can also reduce your water heating bills by 25-50% if they provide domestic hot water heating. As a bonus, you might be able to earn a tax credit for purchasing a qualified Energy Star air-source heat pump.


Air-to-air heat pumps work by moving air from one end of the system to the other, and are the most common style of air-source heat pump. Typically, homes with duct work ventilation distribution systems rely on these pumps.


Air-to-water heat pump systems are less common than air-to-air systems, but follow the same heat distribution principle. They are connected to a hydronic (water) heating system within the home. Heat is drawn from the outside air and distributed via the hydronic system during winter months. Air-to-water heat pumps that cool are quite rare but they draw heat from the home through the hydronic system and ‘pump’ it outside. These are most commonly used in homes with radiant heating systems.


Ground-source heat pumps may also be referred to as geothermal, earth-energy, or geoexchange, and these use the earth or groundwater to heat and cool your home. They are available in either an open-loop or closed-loop system and are suitable for use with both forced air and radiant heating systems. They are extremely energy-efficient, especially in areas that experience harsh winter weather, with costs at around 65% of a standard electric heating system. Choosing a unit that can also provide domestic hot water heating can also reduce your water heating bills by 25-50%.


An open-loop ground-source heat pump system uses an underground body of water for heating and cooling the home. The pump relies on a well system for drawing water up to the heat exchanger, which extracts the heat. Next, the water returns to the original body of water via another well (or above ground into a stream or pond).


Closed-loop ground-source heat pump systems use a run of underground piping in order to extract and reject heat from and to the earth. Because the system is closed and pressurized, it requires the least annual maintenance compared to other types of heat pumps.

Ductless Mini-Split

Ductless mini-split systems use heat pump technology in order to cool the home, and some units can provide supplemental heat via an independent indoor air handling unit. They are ideal for use in homes where ductwork is not physically possible or economical, and boast a compact size. They carry a higher upfront cost, but can provide a zoned heating solution which may cut down on monthly energy costs.

Heat Pump Features: What to Look for When Purchasing a Heat Pump

BTU Capacity

When shopping for a heat pump for your home, estimate approximately 20 BTUs for every square foot of living space. This number will also be impacted by factors such as ceiling height, window and door size, and number of inhabitants. The best way to determine the right sized heat pump for your home is to have a qualified heating, ventilation, and air conditioning (HVAC) professional assess your home.


The coefficient of performance (COP) of a heat pump measures the ratio of either heat removed or provided in BTU per BTU of energy input. An air-source heat pump typically has a COP of 2.3-3.3, whereas a ground-source heat pump typically has a COP of 2.5-3.8. This means that for every kilowatt hour (kWh) of electricity supplied to a heat pump with a COP of 2.8, that 2.8 kWh of heating is supplied to the home. The higher the COP, the more efficient the unit, and vice versa.


The heating seasonal performance factor (HSPF) measures the efficiency of an air-source heat pump. The higher the HSPF, the more efficient the unit, and vice versa. It specifically looks at BTU heat output relative to watt-hours of electricity used over the heating season. An air-source heat pump typically has an HSPF of 6.7-10, whereas an open-loop ground-water system typically has an HSPF of 10.7-12.8, and a closed-loop ground-water system is about 9.2-11 on the HSPF scale.


Heat pumps come with a warranty, which covers most repairs or defects. Many big name manufacturers now offer 5-10 year warranties on the major components. As a general rule, warranties are better on premium brands. You may also be able to purchase an extended warranty for an additional fee. 

Zone-Controlled Heating 

Having the ability to heat and cool specific areas of your home by way of zoned-controlled heating can be another way to cut down on energy consumption while increasing comfort, and is an appealing option for many homeowners.


Look for a unit with this option if you are interested in using your heat pump to provide domestic hot water heating in addition to home heating.

Noise Levels

The outdoor compressor unit of a heat pump can be quite noisy. If possible, look for a unit with an outdoor sound rating of 7.6 bels or less. The lower the value, the quieter the unit is and vice versa.

Variable-Speed Control

This helps to prevent swings in temperature by delivering air in a more controlled, slower, and quieter manner.

Heat Pump Average Costs: How Much Should You Expect to Pay?

Heat pumps typically have a higher upfront cost than a standard furnace, but the return on monthly energy savings can pay for itself several times over during the lifetime of the heat pump. Air-source heat pumps tend to cost less than ground-source models.

Surveys show that most American homeowners spend approximately $5,000-$10,000 when installing a heat pump. Prices vary drastically depending on your needs, and most manufacturers do not publish the prices of their units, so it’s best to speak with your local HVAC professional to get an accurate price quote. Costs can increase drastically depending on the amount of pipe and electrical work necessary. COP and HSPF ratings will factor substantially into the price of a heat pump, as will whether the unit is considered low-, mid-, or high-quality. Look for Energy Star-rated heat pumps for the biggest energy savings.

Depending on where you live, you may be required to obtain a permit prior to having your heat pump installed. This can cost as little as $50 and can run into the hundreds of dollars. You may also need to have an inspection completed by your city or municipality, depending on local bylaws.

When it comes to purchasing a new heat pump for your home, less is not always best. You may be tempted to purchase the least expensive model available, but given the major role your heat pump plays in your family’s day-to-day life, it’s worth making the additional investment. The same goes for choosing a heat pump installer. It may be tempting to save a few bucks by hiring the company that provides the lowest quote, but you want to ensure the installer you choose has the right level of experience, expertise, and can provide the quality service necessary for your heat pump for years to come.

Heat Pump Installation: Step-by-Step

Heat pump installation is a complicated endeavor, and is not something that should be attempted as a do-it-yourself project. It might be tempting to save on the installation fee, but heat pumps contain several complicated components including electrical, ducting, plumbing, and gas, that require the installation expertise and specialized tools of a qualified HVAC professional. Heat pumps are a specialized technology that require the right level of skill for proper installation and service. 

That said, it’s good to understand the process of how a heat pump is installed. Here’s a step-by-step breakdown of how to install a mini-split heat pump system.

Step 1: Install the condenser unit.

This is the part of the system located outside. The manufacturer’s instructions should tell you how much clearance is necessary for your unit. Bolt the condenser unit to the ground or install on brackets up against the house. Just be sure to clean the area of dirt and debris first, and ensure it’s beyond the ‘drip edge’ of your roof -- otherwise rain and snow could fall onto the unit, potentially causing damage or decreased performance.

Step 2: Install the indoor air handling mount(s).

Install the mounting plate on studs first, before attaching the air handling unit. For best results, ensure each indoor air handling unit remains within 30 feet of the condenser. As with the outdoor unit, the manufacturer provides instructions detailing the necessary clearance for the air handling unit. Next, drill a hole from the mounting position to the outdoor unit, which makes the line connect between the two.

Step 3: Mount air handling unit.

Carefully attach the indoor air handling unit(s) to the mounting brackets. Next, feed the control wire, refrigerant lines, and condensate drain hose through the previously drilled hole. This sets up the connection with the outdoor unit.

Step 4: Connect the indoor and outdoor units.

Next, connect the control wire, refrigerant lines, and condensate drain hose. Follow the manufacturer's instructions for the connections between the two units.

Step 5: Cover the lines.

Typically, plastic covering hides unsightly lines on the outside of your home. This helps with the overall look and curb appeal of your home.

Step 6: Make final connections.

Finally, you’ll need to connect a gauge manifold and a vacuum pump to the refrigerant lines. This detects any leaks and drys the lines, if necessary, before pumping refrigerant into the system. Once this step is complete you’ll need to run the unit to test that it’s working properly.

Again, heat pump installation remains a complicated undertaking with many complex steps. Therefore, experts recommend that only qualified HVAC professionals work on heat pump projects. However, homeowners should have an idea of the steps involved in the process of installing a heat pump.

Options for Heat Pump Repair

A qualified HVAC professional should inspect your heat pump unit once a year to ensure it’s working at its peak. Most heat pumps are low-maintenance and do not require much in the way of upkeep, aside from ensuring the coils, fans, and filters are kept clean -- which is generally something homeowners can check themselves. However, due to the complexity of the various heat pump systems, leave repairs and major maintenance to qualified professionals.

Additional Reading on Heat Pumps