Heat Pumps: How They Work, What They Cost and Are They Worth It?

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It’s a cold January morning. The furnace in the basement used to kick on with a thump and a whoosh; now a quiet unit outside hums along, and warm air keeps coming through the same vents. In July, that same box cools the house. No oil delivery, no propane tank to watch, one machine for both seasons. That’s a heat pump, and it’s the reason so many families are rethinking how they heat and cool their homes.

In short: a heat pump is an air conditioner that can also run in reverse. Instead of burning fuel, it moves heat: out of the house in summer, into the house in winter. ENERGY STAR says it can deliver up to three times more heat energy than the electricity it uses. Whether it lowers your bills depends mostly on what you heat with now and your local prices.

This page opens our Heat Pumps section: how a heat pump works, the main types, how they handle cold weather, what they cost in 2026, whether they’re worth it for your home, and the units worth a look, from DIY mini splits to a window heat pump for renters.

Prices change often. The prices below are what we saw at the maker or a major retailer in October 2026, or installed-cost averages from the named source and year; check the current price and get quotes before you buy.

Heat pumps at a glance

• What it is: one electric system that heats and cools by moving heat between indoors and outdoors.
• Efficiency: up to three units of heat for each unit of electricity, per ENERGY STAR. DOE says modern air-source heat pumps can cut electricity use for heating by about 50% compared with electric furnaces and baseboard heaters.
• Main types: ducted (central), ductless mini split, window and portable, and geothermal (ground-source). Heat pump water heaters and dryers use the same idea.
• Cold weather: cold-climate models keep heating far below freezing; ENERGY STAR’s cold-climate label requires real heating performance at 5°F.
• Cost: EnergySage puts the average whole-home installation at about $15,400 before incentives in 2026; DIY mini splits for one room start around $860 to $2,200 for the equipment.
• No federal tax credit in 2026: the 25C credit (up to $2,000 for a heat pump) ended for installations after December 31, 2025. State, utility and IRA rebate programs remain in some places.

How does a heat pump work?

A heat pump works like your refrigerator, which pulls heat out of the food compartment and releases it into your kitchen. A heat pump does that at house scale, in either direction.

Inside the system, a fluid called refrigerant circulates in a closed loop between an indoor coil and an outdoor coil. The cycle has four steps:

1. Evaporate: cold, low-pressure refrigerant passes through one coil and absorbs heat from the air around it, even cold air, because the refrigerant is colder still. It boils into a gas.
2. Compress: the compressor squeezes that gas, which makes it much hotter.
3. Condense: the hot gas flows through the other coil, where a fan blows air across it. The refrigerant gives up its heat and turns back into a liquid.
4. Expand: the liquid passes through an expansion valve, drops in pressure and temperature, and the loop starts again.

In summer, the indoor coil is the cold one: it soaks up heat from your rooms (and pulls moisture out of the air), and the outdoor unit releases that heat outside. That’s air conditioning. In winter, a reversing valve flips the direction of flow, so the outdoor coil collects heat from the outside air and the indoor coil releases it into your home. As EnergySage puts it, that valve is the one part that separates a heat pump from a plain air conditioner.

Why is this so efficient? Because the electricity runs the compressor and fans; it doesn’t make the heat. Most of the heat already exists outdoors. An electric baseboard heater turns 1 kWh of electricity into 1 kWh of heat. A heat pump can deliver two to three or more kWh of heat for the same 1 kWh, depending on the outdoor temperature. Engineers call that ratio the coefficient of performance, or COP. A COP of 3 means three times the heat of a resistance heater for the same power. To understand the physics behind it, see our explainer on thermal energy.

Defrost and backup heat

In cold, damp weather frost builds up on the outdoor coil, so the system briefly runs in reverse to melt it; steam from the outdoor unit is normal. Also, many ducted systems include electric resistance strips (“aux” or “emergency” heat) that kick in when the heat pump can’t keep up on the coldest days or during defrost. Those strips work like a giant toaster and cost much more to run, so a well-sized system should need them rarely.

Types of heat pumps

Type	How it’s set up	Best for	Who installs it
Ducted air-source (central)	Outdoor unit plus an indoor air handler or furnace coil, using your existing ducts	Homes with ductwork replacing central AC, a furnace or both	Licensed HVAC contractor
Ductless mini split	Outdoor unit plus one or more wall, ceiling or floor heads, joined by a small refrigerant line through the wall	Homes without ducts, additions, garages, rooms that are always too hot or cold	HVAC contractor; some DIY kits (MRCOOL) allow homeowner installation
Window and portable heat pumps	All-in-one unit in a window or on the floor	Renters, apartments, single rooms	You (it plugs into a standard outlet)
Geothermal (ground-source)	Indoor unit connected to pipes buried in the yard or a well	New homes, big renovations, people staying long term	Specialist contractor and driller
Dual fuel (hybrid)	Heat pump paired with a gas or propane furnace that takes over in deep cold	Cold regions with cheap gas, or keeping a newer furnace	Licensed HVAC contractor

The same refrigerant cycle shows up in other appliances. A heat pump water heater pulls heat from the air around the tank to heat water, and a heat pump dryer recycles warm air instead of venting it outside. Geothermal systems use the steady temperature underground; DOE says they use 25 to 50% less energy than air-source systems. Our geothermal energy explainer covers how ground loops work.

Do heat pumps work in cold climates?

Yes, with the right equipment. DOE wrote in 2023 that air-source heat pumps, once rare where temperatures stay below freezing, are “now” a legitimate option for colder regions. The physics hasn’t changed, though: the colder it gets outside, the harder the heat pump works. A Pacific Northwest National Laboratory guide explains that a standard unit’s heating capacity starts dropping once it’s below the mid-40s outdoors, and by the teens it delivers only a fraction of its rating.

Cold-climate heat pumps use variable-speed (inverter) compressors and better components to hold their output. To earn ENERGY STAR’s cold-climate designation, a heat pump must keep at least 70% of its rated heating capacity at 5°F and run at a COP of at least 1.75 at that temperature, according to PNNL’s summary of the criteria. The Northeast Energy Efficiency Partnerships (NEEP) also keeps a free list of cold-climate models with performance data at low temperatures, which contractors use to size systems.

Makers rate how low their units keep heating. Some examples from the units on this page: the Senville AURA line heats down to -22°F, the Cooper & Hunter Olivia to -13°F and the Pioneer Diamante Pro to -4°F, per their makers or sellers. The Senville LETO is not a cold-climate unit; it heats to 5°F. Window units are very different: the Midea window AC with heat stops heat-pumping below about 41°F outdoors. For a full list, see our guide to the best heat pumps for cold climates.

“Heats down to -22°F” doesn’t mean “heats your whole house at -22°F.” Output falls as it gets colder, so in a snowy climate a contractor should size the system for your coldest days using a load calculation (Manual J), not just square footage, and plan for backup heat or keep your existing furnace as a dual-fuel setup.

How efficient is a heat pump? Reading SEER2 and HSPF2

Since January 1, 2023, heat pumps and central air conditioners carry new ratings under a stricter federal test:

• SEER2: cooling efficiency over a season. Higher is better. The federal minimum for a split heat pump is 14.3 SEER2 nationwide.
• HSPF2: heating efficiency over a season. Higher is better. The federal minimum for a split heat pump is 7.5 HSPF2. Some makers list two HSPF2 values: Region IV (a moderate climate) and Region V (a cold one, so the number is lower).
• EER2: cooling efficiency on a hot day; it matters most in the Southwest, where there’s a minimum too.
• COP: heat out divided by electricity in at one moment and temperature. Cold-climate specs often quote COP at 5°F.

Efficiency matters more than most buyers think. NREL’s 2024 national study found that minimum-efficiency heat pumps could raise energy bills in 39% of households, while higher-efficiency equipment cut that to 5%. If you’re paying for a new system, the step up in SEER2 and HSPF2 usually earns its keep.

How much does a heat pump cost in 2026?

Installed prices vary more than almost any home upgrade, because your home’s size, ducts, electrical panel and climate all matter. EnergySage, which collects real installer quotes, reported these 2026 averages before incentives (updated March 2026):

System	Average installed cost (EnergySage, 2026)	Per ton
Ducted air-source heat pump	$14,529	$3,790
Ductless mini split (whole home)	$25,957	$9,163
Hybrid (heat pump plus furnace)	$14,353	$6,407
All whole-home heat pump jobs	$15,393	–

EnergySage also notes a typical whole-home system runs about $8,000 in New Mexico and $33,000 in New York. A single-room mini split costs far less. The equipment for the DIY and pro-install units on this page runs from about $860 to $2,200 (sale prices, October 2026), before the electrician and, for the pro-install units, the HVAC contractor. The full breakdown, with what drives the price up or down, is in our heat pump cost guide.

Incentives in 2026: the federal 25C credit, which paid 30% up to $2,000 for a heat pump, ended for installations completed after December 31, 2025 (the One Big Beautiful Bill Act, July 2025). If yours was installed in 2025, you claim it on your 2025 return. For 2026 installs, the money comes from states and utilities. The IRA Home Energy Rebates (the heat pump rebate is called HEAR) are separate from tax credits and run by state energy offices; DOE says they’re “available in select states.” Funding runs out: California, for example, says its single-family HEAR rebates were fully reserved as of February 24, 2026. Many utilities also pay rebates. Check the ENERGY STAR Rebate Finder, DSIRE, your state energy office and your utility, and read our guide to home energy rebates and the heat pump tax credit in 2026.

Are heat pumps worth it?

For many homes, yes, but it depends on what you heat with now. NREL’s 2024 study, which modeled 550,000 representative U.S. homes, found that 62% to 95% of households would see lower energy bills with a heat pump, depending on its efficiency. For homes that already have air conditioning and heat with electricity, fuel oil or propane, 92% to 100% would save, with median savings of $300 to $650 a year. NREL also cautioned that high installation costs can still make the switch hard to justify for some households.

Here is our estimate of what 10 million Btu of heat costs at national-average winter prices (January to March 2026, EIA). That’s a slice of a winter, not a whole season; your local prices will differ, sometimes a lot.

Heating system (efficiency we assumed)	Cost per 10 million Btu of heat (our estimate)
Electric baseboard or furnace (100%)	≈$524
Propane furnace (95% AFUE)	≈$308
Heat pump, seasonal COP 2.5	≈$210
Older gas furnace (80% AFUE)	≈$181
Heat pump, seasonal COP 3	≈$175
High-efficiency gas furnace (95% AFUE)	≈$152

Prices used: electricity 17.9¢/kWh, natural gas $15.02 per thousand cubic feet and propane $2.67 a gallon (EIA residential averages). The pattern matches NREL’s findings: if you heat with electric resistance, propane or oil, a heat pump almost always saves money; against cheap natural gas and a modern furnace, it’s closer, and your local electricity rate decides it. Remember too that a heat pump also replaces your air conditioner, so you’re buying one system instead of two.

Pros and cons

• Pro: heating and cooling in one system; very efficient in mild and moderate weather.
• Pro: no combustion in the house, so no carbon monoxide from the heater and no fuel deliveries.
• Pro: variable-speed models run long and steady, which many owners find more even and quieter than a furnace’s on-off blasts.
• Pro: pairs well with rooftop solar panels, since it runs on electricity.
• Con: higher up-front cost than replacing a furnace or AC alone, and the federal credit is gone.
• Con: output drops in deep cold; standard units may lean on costly backup heat.
• Con: air from the vents feels cooler than furnace air (warm, not hot), which takes some getting used to.
• Con: it runs year-round, so it may not last as long as a furnace. Carrier lists 10 to 15 years for heat pumps and 15 to 20 for furnaces and air conditioners.
• Con: no heat in a power outage, the same as a gas furnace with an electric blower. Plan backup with our generators or home battery backup guides.

Weighing a heat pump against what you have now? Read heat pump vs furnace and heat pump vs air conditioner.

Installation: what a good job looks like

• A load calculation, not a guess. Ask for a Manual J room-by-room calculation. Oversized units short-cycle; undersized ones lean on backup heat.
• Licensed pros, with a permit where required. Refrigerant lines must be handled by an EPA-certified HVAC technician (except quick-connect DIY kits made for homeowners), and the 240 V or dedicated circuit is a job for a licensed electrician.
• Check your panel. Electrifying heat can mean a larger breaker or, in older homes, a panel upgrade. Ask before you sign.
• Ducts matter. Leaky or undersized ducts waste what you paid for. Ask the contractor to inspect and seal them.
• Get two or three quotes, and ask each for the model numbers, SEER2 and HSPF2, and heating output at 5°F (or the NEEP listing).
• Register the warranty. Many makers require registration within 60 to 90 days, and some (Senville, Cooper & Hunter) require professional installation for the warranty to count.

Can you install one yourself? MRCOOL’s DIY line is built for it: pre-charged quick-connect line sets, and MRCOOL says homeowner installation doesn’t void its warranty. Most other mini splits need vacuuming and charging by a certified technician, and their warranties depend on it. Even with a DIY kit, the electrical connection to your panel should be made by a licensed electrician. Our guide to the best DIY mini splits goes deeper.

The best heat pumps to look at in 2026

Whole-house ducted heat pumps are sold and installed through HVAC contractors, so the best “product” there is a good contractor and the right model for your climate. The units below are ones you can buy more directly: mini splits, window units and the extras that make a heat pump work better. We researched and compared them from makers’ specs; we didn’t test them.

Unit	Type	Size and power	Lowest heating temp (maker or seller)	Install	About (Oct 2026)
MRCOOL DIY 5th Gen 12K	Mini split	12,000 BTU, 115V	Not stated	DIY allowed	$2,158 (retailer sale)
Senville AURA 24K	Mini split	24,000 BTU, 230V	-22°F	Pro required for warranty	$1,799.99 (maker)
Pioneer Diamante Pro 12K	Mini split	12,000 BTU, 230V	-4°F	HVAC pro	$858 (maker sale)
Midea window AC with heat	Window	12,000 BTU, 115V	About 41°F	DIY	Check price
Gradient All-Weather	Saddle window	9,300 BTU cooling, 120V	-13°F	DIY-friendly window mount	Contact Gradient

MRCOOL DIY 5th Gen E Star 12K is the one most homeowners can put in themselves: it runs on 115V, rates 23.5 SEER2 and 10.2 HSPF2 (Region IV), ships with a 25 ft pre-charged line set, and MRCOOL lists a 7-year compressor and 5-year parts warranty that allows homeowner installation. It costs more than pro-install units, because you’re paying for the quick-connect lines instead of a technician. MRCOOL doesn’t state how low it heats on the pages we read, so it’s best for moderate climates.

Check the MRCOOL DIY 5th Gen price on Amazon

Senville AURA 24K is a cold-climate mini split that Senville says heats down to -22°F, with 21 SEER2, 13.5 HSPF2 (Region IV), a maximum heating capacity of 29,000 BTU and a 10-year compressor, 5-year parts warranty. Senville requires professional installation for the warranty, so budget for an HVAC contractor.

Check the Senville AURA 24K price on Amazon

Pioneer Diamante Pro 12K is the low-cost route if you’re paying a pro anyway: 20 SEER2, heats to -4°F, R-454B refrigerant and a 16 ft line kit. It isn’t sold as a DIY quick-connect kit, so plan on an HVAC technician, and the 5-year parts warranty needs registration after installation.

Check the Pioneer Diamante Pro price on Amazon

For renters, the Midea window AC with heat cools a room and heat-pumps in spring and fall, but it stops heat-pumping below about 41°F outdoors, so treat it as shoulder-season heat. The Gradient All-Weather saddle unit is the real-winter option: Gradient rates it at 7,200 BTU of heat at 5°F and down to -13°F. It’s sold through Gradient’s sales team, not Amazon.

Check the Midea window AC with heat price on Amazon

See it at Gradient

Two extras round it out. A heat pump water heater like the Rheem ProTerra Hybrid uses the same trick for hot water; it’s sold at Home Depot and through plumbers, not Amazon. And a thermostat that understands heat pumps, such as the ecobee Smart Thermostat Premium, helps keep backup heat off when the heat pump can do the job. Check ecobee’s compatibility tool for your wiring first, and see our best smart thermostat for a heat pump.

See it at Rheem

Check the ecobee Smart Thermostat Premium price on Amazon

Which heat pump guide do you need?

If you want to…	Read
Decide whether to replace your furnace	Heat pump vs furnace
Replace an old central or window AC	Heat pump vs air conditioner
Heat a home through real winters	Best heat pumps for cold climates
Install a mini split yourself (MRCOOL and others)	Best DIY mini splits
Know what you’ll pay, installed	Heat pump cost
Cut your water heating bill	Best heat pump water heaters
Heat and cool one room or an apartment	Best window heat pumps
Dry clothes for less (and without a vent)	Best heat pump dryers
Pick a thermostat that won’t waste backup heat	Best smart thermostat for a heat pump
Find rebates in 2026	Home energy rebates

For the bigger picture, see how heat pumps fit into clean energy and electrical energy at home, and browse every article in our heat pumps category. Keeping the heat on in an outage is covered in home battery backup and home generators.

Heat pump questions

How does a heat pump work in simple terms?

It moves heat instead of making it. A refrigerant loop absorbs heat on one side and releases it on the other, driven by an electric compressor. In summer it carries heat out of your house, like an air conditioner. In winter a reversing valve flips the flow, and it gathers heat from the outdoor air and brings it inside, even when it feels cold out.

Are heat pumps worth it in 2026 without the tax credit?

Often, yes. The savings come from efficiency, not the credit. NREL found that most homes heating with electric resistance, propane or oil would save $300 to $650 a year (median, homes with AC). Against cheap natural gas the case is weaker. The 25C credit ended for installs after 2025, so check state, utility and HEAR rebates before you buy.

At what temperature does a heat pump stop working?

It depends on the model. Standard units lose much of their output below freezing, and window units like the Midea with heat stop at about 41°F. Cold-climate models keep heating far lower: Senville rates its AURA line to -22°F. ENERGY STAR cold-climate units must keep 70% of their capacity at 5°F. Below a unit’s limit, backup heat takes over.

How long do heat pumps last?

Carrier puts heat pumps at 10 to 15 years, a little less than furnaces and central air conditioners (15 to 20), because a heat pump works in both seasons. Yearly maintenance, clean filters and keeping snow and leaves away from the outdoor unit help it reach the top of that range.