Sizing the systems
Heat pump installation cost
A two-stage ducted heat pump runs about $13,600 installed and a cold-climate variable-speed one about $17,000. But the number that decides your January bill is not the price — it is the balance point, the outdoor temperature below which the machine cannot keep up and the resistance strips take over at three times the cost per BTU. It is calculable, it differs by eight degrees between machines of the same size, and no competitor publishes it. This page draws it.
Written and edited by Pablo Ruiz Quintero
Last reviewed 2026-09-17 · Nothing you type leaves your browser
What are you heating and cooling?
A heat pump is one machine doing two jobs, so it gets sized twice — and in a cold climate the heating side asks for more. What that produces is a balance point: the outdoor temperature below which it cannot keep up alone. That number decides your January bill and almost nobody publishes it.
Heated and cooled floor area.
More air to condition, more load.
Washington DC, Nashville, Kansas City, Portland
Holds more of its capacity as it gets cold and runs longer at lower output. The sensible middle across most of the country.
Insulated walls and attic to the standard of its decade. The baseline these figures assume.
Around 15% of floor area, double glazed.
Some sun on the house for part of the day.
It decides what you are comparing the running cost against, and the answer is very different for each.
If it is, the heat pump replaces two machines with one — which is most of its value.
Used only to pick a regional labour rate. It stays in your browser.
Balance point
33°F
4 tons · $13,600 installed · design 15°F
About 13% of the season on resistance backup
Below 33°F the electric strips make up the difference, and they run at a COP of 1 against the 2.1 this system averages over a season.
What it costs to run, honestly
A year of heating, at national average energy prices.
- This heat pump$1,919
- The 95% gas furnace it replaces$1,143
- Differencecosts $776 more
That is not the answer the industry gives, and it is the arithmetic. US gas is cheap and US electricity is not, so against a modern condensing furnace a heat pump can lose on running cost — especially where the backup strips run. It still replaces two machines with one, and it still cuts emissions. Those are real reasons. They are not the bill, and you should be told which is which.
The three classes
| Class | Balance | Installed | To run |
|---|---|---|---|
| Standard, single stage | 34°F | $11,400 | $2,138/yr |
| Two stage · | 33°F | $13,600 | $1,919/yr |
| Cold climate, variable speed | 25°F | $19,050 | $1,473/yr |
The cold-climate machine costs more to buy and less to run, and the gap between those two columns is the whole decision. In a warm zone it never repays; in a cold one the cheap machine spends the winter on resistance strips.
Where the two curves cross
Capacity falls as it gets colder. The load rises. The crossing is the balance point.
Shopping list
- Heat pump, 4 tons, two stage
48,000 BTU/h nominal · HSPF2 8.5 heating, SEER2 16 cooling · keeps 60% of capacity at 5°F1 system - Electric backup strips
Electric strips in the air handler. They cost almost nothing to fit and about three times as much to run as the heat pump they are backing up, so how many hours they run is the whole economic question.$600
What it costs
National average. Outdoor unit, indoor air handler or coil, refrigerant lines, electric backup strips, commissioning and removal of the old equipment. Ductwork, an electrical panel upgrade and any gas decommissioning are separate.
$3,400 a ton. Buying the two machines it replaces separately — a 95% furnace and central air — would be about $15,023, so the heat pump is cheaper up front as well as being one machine instead of two. Compare with a furnace, central air and, where there are no ducts, a mini split.
Worth knowing
- 4 tons — 48,000 BTU/h nominal — about $13,600 installed, or $3,400 a ton. It heats and cools, so it is replacing two machines.
- Balance point about 33°F against a design temperature of 15°F. Below that balance point the heat pump cannot carry the house alone and the electric backup strips come on — and those run at a COP of 1, roughly three times the cost per BTU. Around 13 per cent of the season's heat comes from them here, and that is where a disappointing electricity bill comes from.
- Seasonal COP works out around 2.1 with the backup counted in — meaning 2.1 units of heat for each unit of electricity. Advertised COP figures leave the backup out, which is why a machine rated at 3.5 can deliver 2.1 over a real winter.
- Running cost about $1,919 a year of electricity against $1,143 of gas for the same heat — so here it costs $776 a year MORE to run than the gas furnace it replaces. That is an honest answer and not the one the industry gives: with cheap gas and expensive electricity, a heat pump in a cold climate can lose on running cost. It still wins on replacing two machines with one and on emissions, and those are real reasons — but they are not the bill.
- A screening figure, not a Manual J — and heat pumps deserve one more than anything else here, because the balance point is exactly as wrong as the load calculation that produced it.
On this page — 6 sections
The balance point, which is the whole decision
The short version
- The balance point decides your bill. Below it, resistance strips run at three times the cost per BTU.
- A standard unit in a cold climate balances around 33°F and spends a third of the season on strips. A cold-climate one balances near 25°F.
- Against cheap gas it can lose. We say so, with the arithmetic, rather than repeating the sales line.
- Against electric resistance it always wins, and by a lot. That is the swap worth making without hesitation.
Everything else on this page is secondary to one number that no competitor publishes: the outdoor temperature at which what the machine can deliver equals what the house is losing.
It exists because two things move in opposite directions as it gets colder. The house loses heat faster. And the heat pump — which is moving heat from outside air, and there is less of it to move — delivers less. Two lines, sloping opposite ways. They cross somewhere, and where they cross is the balance point.
balance point: capacity(T) = load(T)
- load(T)
- rises linearly as T falls — zero at about 65°F, full design load at the design temperature
- capacity(T)
- falls as T falls — a standard unit holds 45% of nominal at 5°F, a cold-climate one 90%
- below the crossing
- the shortfall is made up by resistance strips at a COP of 1
Worked through — An 1,800 ft² house in zone 5 with a two-stage 4-ton unit balances around 32°F. Roughly a fifth of the season's heat then comes from strips at three times the cost — which is exactly where a disappointing January bill comes from.
Air Conditioning Contractors of America, ACCA Manual J, Residential Load Calculation (8th edition) · checked 2026-09-16
What it costs installed
$11,400
Standard, single stage
Balances high — fine in the South
$13,600
Two stage
The sensible middle across most of the country
$17,000
Cold climate, variable speed
Holds 90% of capacity at 5°F
$600
Electric backup strips
Cheap to fit, expensive to run
The spread between those three is about the balance point, not about build quality. The expensive machine buys you fewer hours on resistance heat — which is why the right comparison is the installed price and the running cost together, and why the calculator puts them in adjacent columns.
One more thing that belongs in the price and often is not: the electrical panel. Backup strips draw a great deal of current, and an older 100 amp panel may not have room. Ask for the load calculation, not just the equipment quote.
MaterialsEstimator, HVAC equipment and installation price survey · checked 2026-09-16
Whether it actually saves money, said plainly
This is the section where this page will disagree with most of what you read, so here is the arithmetic in the open.
Natural gas at $1.35 a therm, burnt in a 95% furnace, delivers heat at about $14 per million BTU. Electricity at $0.17 a kilowatt-hour, through a heat pump averaging a seasonal COP of 2, delivers heat at about $25 per million BTU.
So in much of the United States right now, replacing a working condensing gas furnace with a heat pump increases the heating bill. That is not an argument against heat pumps. It is an argument against the specific claim that they always save money, which is made constantly and is not true at current US energy prices.
| What a heat pump is genuinely good at | What it is sold on and often is not | |
|---|---|---|
| Replacing electric resistance heat | Cuts the bill by roughly two thirds | — |
| Replacing propane or oil | Almost always cheaper to run | — |
| Replacing cheap natural gas | — | Frequently costs more to run |
| Two machines becoming one | Real, and worth money at replacement time | — |
| Emissions | Real, and improves as the grid does | — |
| Where cooling is needed anyway | You were buying half of it regardless | — |
| In a house with no ducts | A mini split is usually the better version | — |
Why the old advice about cold weather is out of date
“Heat pumps do not work when it is really cold” was good advice about the machines it was written for, and those machines are still on sale.
| Class | HSPF2 | Capacity at 5°F | What that means in January |
|---|---|---|---|
| Standard, single stage | 7.5 | 45% | Loses more than half its output by 5 °F, so the resistance strips carry a lot of the coldest days. Fine in the South, expensive to run further north. |
| Two stage | 8.5 | 60% | Holds more of its capacity as it gets cold and runs longer at lower output. The sensible middle across most of the country. |
| Cold climate, variable speed | 10 | 90% | Keeps nearly all its capacity at 5 °F and many keep working below −13 °F. This is the class that made the old 'heat pumps do not work in the cold' advice obsolete, and most people repeating it have never seen one. |
A standard unit losing more than half its output at 5°F genuinely cannot heat a house in Minneapolis, and the strips carry the winter. A cold-climate unit keeping 90 per cent of it can, and many are certified to keep working below −13°F.
That is the difference between a heat pump that disappoints and one that does not, and it costs about $5,600 on this house. Which is a lot of money and also less than the strips will cost you over fifteen winters in a cold zone — the calculator puts both numbers side by side so you can see which way it falls for you.
The settings that quietly cost money
Ask for these to be configured, and then check them
- Supplemental heat lockout — the outdoor temperature above which the strips are not allowed to run. Unset, they come on whenever the thermostat is impatient.
- Compressor lockout, if a dual fuel system — the temperature below which the heat pump stops and the furnace takes over.
- A thermostat that actually knows it is controlling a heat pump. A generic one will call for auxiliary heat far too eagerly.
- No deep overnight setback. On a furnace it saves money; on a heat pump the morning recovery calls the strips and costs more than the setback saved.
- The emergency heat setting explained to you, because it is not what most people assume.
- Defrost strategy — demand-based rather than on a fixed timer, which defrosts when there is nothing to melt.
- The electrical load calculation for the strips, in writing, before anybody assumes your panel has room.
- Where the outdoor unit sits: above expected snow line, out of a drip line, and not under a bedroom window.
What goes wrong
01Buying on price per ton
Two units of the same size and price can have balance points eight degrees apart, and that difference is worth more over fifteen winters than the price gap.
Instead — Ask for the capacity table at 47°F, 17°F and 5°F, and compare installed price against running cost together.
02Sizing a heat pump for cooling only
In a cold climate the heating load is much larger. Size on cooling alone and the balance point lands in the thirties, which means the strips carry a third of the season.
Instead — Size on both, and pick a variable-speed machine if you need heating headroom — it can modulate down for cooling where a single-stage unit cannot.
03Expecting a lower bill against cheap natural gas
At US prices gas delivers heat around $14 per million BTU and a heat pump at a seasonal COP of 2 costs around $25. The saving frequently is not there.
Instead — Run the comparison against what you actually have. Buy it for one machine instead of two, for the cooling, or for emissions — all good reasons that are not the bill.
04Leaving the strip lockout unset
Without it, auxiliary heat comes on whenever the thermostat feels behind — including mild mornings when the heat pump would have caught up on its own in twenty minutes.
Instead — Have the lockout configured to a temperature near the balance point, and verify it on the thermostat yourself afterwards.
05Using a deep overnight setback
The furnace habit. On a heat pump the morning recovery triggers the strips, and three hours of resistance heat costs more than the overnight saving.
Instead — Two or three degrees at most, or leave it alone. The machine is cheapest when it runs steadily at low output.
06Leaving the thermostat on emergency heat
It switches the heat pump off completely and heats on strips alone. Somebody sets it during a cold snap and nobody sets it back.
Instead — Learn where the setting is and check it after any cold snap. It is for a broken compressor, not for weather.
07Assuming the electrical panel has room
Backup strips draw a lot of current, and an older 100 amp panel often cannot take them alongside everything else. It surfaces on installation day.
Instead — Get the electrical load calculation in the quote, and price a panel upgrade as a possibility rather than a surprise.
08Calling a defrost cycle a fault
The unit reverses to melt frost off the outdoor coil and blows cool air indoors for a few minutes. It is normal, and so is 95°F supply air that feels cool against your skin.
Instead — Know both before installation. They are the two things that make people think a new heat pump is broken when it is working exactly as designed.
- 01Screen the cooling and heating loads separatelyThey are different numbers, and in a cold climate the heating one is much larger. That difference is the whole heat pump problem.
- 02Find your design temperatureThe coldest of a normal year for your zone, not the record. It is what the balance point gets measured against.
- 03Ask for the capacity at 5°F, not just the nominalThe box says 47°F. A standard unit keeps under half of that at 5°F; a cold-climate one keeps nearly all of it.
- 04Find where capacity crosses loadThat is the balance point. Above it the machine runs alone at a COP of three; below it, the strips run at one.
- 05Work out how much of the season falls below itThat fraction, at three times the cost per BTU, is what decides whether the bill goes up or down.
- 06Compare against what you are actually replacingAgainst electric resistance a heat pump always wins. Against cheap natural gas it often does not, and you deserve to be told which.
- 07Set the strip lockoutAsk for the supplemental heat lockout to be configured, and check it. An unset lockout runs resistance heat you did not need.
A mini split is the same technology without the ducts — one outdoor unit, a head in each room, every one its own zone. Where ducts do not already exist it beats installing them almost every time.
No ductwork?- Balance point
- The outdoor temperature at which what the heat pump can deliver equals what the house is losing. Above it the machine carries the house alone; below it, the backup comes on.
- COP
- Coefficient of performance: units of heat delivered per unit of electricity. A heat pump runs at three or four in mild weather and falls as it gets colder. Electric resistance is exactly one, always.
- HSPF2
- Heating Seasonal Performance Factor, 2023 revision — BTU of heat per watt-hour over a whole season. It already averages in mild and cold weather, which is why it is lower than the headline COP.
- Auxiliary or backup heat
- Electric resistance strips in the air handler that make up the shortfall below the balance point. Cheap to fit, about three times the running cost per BTU.
- Emergency heat
- A thermostat setting that shuts the heat pump off entirely and runs on strips alone. It is for a broken compressor, not for a cold snap, and leaving it on is a well-known way to get a shocking bill.
- Cold climate heat pump
- A class of variable-speed machine that holds most of its capacity into deep cold — around 90 per cent at 5°F where a standard unit holds 45. It is what makes the old advice about heat pumps obsolete.
- Defrost cycle
- Periodically running backwards to melt frost off the outdoor coil. It is normal, it briefly blows cool air indoors, and it is the reason a heat pump feels different from a furnace.
- Design temperature
- The outdoor temperature a system is sized for — roughly the coldest of a normal year, not the record low. Sizing to the record makes the machine wrong for every other day.
- Dual fuel or hybrid
- A heat pump paired with a gas furnace instead of resistance strips, switching over below the balance point. It buys the heat pump's efficiency in mild weather and the furnace's cheap fuel in deep cold.
- Supplemental heat lockout
- A control setting that stops the strips coming on above a chosen temperature. Badly set — or absent — it is the commonest cause of a heat pump running expensively for no reason.
- Ton
- 12,000 BTU per hour of capacity. A heat pump is sold in cooling tons even though the heating side is often what decides the size.
- Nominal capacity
- The rating at 47°F. It is the number on the box and it is not what you get in January — which is the entire point of the balance point.
Common questions
- How much does a heat pump cost to install?
- About $11,400 for a standard ducted system, $13,600 for two-stage and $17,000 for a cold-climate variable-speed one on a typical 1,800 ft² house — including the electric backup strips. It replaces both the furnace and the air conditioner, so the comparison is against two machines rather than one.
- What is a heat pump's balance point?
- The outdoor temperature at which the heat it can deliver exactly equals the heat the house is losing. Above it the heat pump carries the house on its own at a COP of three or more. Below it, electric resistance strips make up the difference at a COP of one — about three times the cost per BTU. It is the single number that decides your winter bill, and no price-per-ton figure can tell you it.
- Do heat pumps work in cold weather?
- Modern cold-climate ones do, and that is a genuine change rather than marketing. A standard heat pump keeps about 45 per cent of its rated capacity at 5°F; a cold-climate variable-speed unit keeps around 90 per cent, and many keep running below −13°F. The old advice comes from the standard machines, and most people repeating it have never seen the new ones.
- Will a heat pump save me money on my heating bill?
- Against electric resistance heat, always and by a lot — you are comparing against the worst possible baseline. Against a modern 95% gas furnace at current US prices, often not: gas at $1.35 a therm works out near $14 per million BTU delivered, and electricity at $0.17 a kWh at a seasonal COP of 2 works out near $25. This site is going to say that plainly rather than repeat the sales line — a heat pump replacing cheap gas is an emissions and equipment-count decision, not usually a bill one.
- What size heat pump do I need?
- A heat pump gets sized twice — once for cooling and once for heating — and in a cold climate the heating side asks for more. How far you can go up depends on the machine: a variable-speed unit modulates down and tolerates being oversized for cooling, while a single-stage one does not and will short-cycle all summer. That constraint, not the price, is why standard heat pumps end up with high balance points in cold climates.
- What is auxiliary heat and why is it so expensive?
- Electric resistance strips in the air handler, which come on below the balance point. They are 100% efficient, which sounds good and is the problem: 100% efficient means a COP of one, while the heat pump next to them is delivering three units of heat per unit of electricity. Every hour on strips costs roughly three times as much as an hour on the heat pump.
- What is the difference between auxiliary heat and emergency heat?
- Auxiliary heat runs alongside the heat pump to top it up. Emergency heat switches the heat pump off entirely and runs on strips alone — it is for a broken compressor, not for a cold snap. Leaving a thermostat on emergency heat through a winter is one of the most reliable ways to get an alarming bill.
- Is a dual fuel heat pump worth it?
- Where you already have gas, very often yes. The heat pump handles the mild two-thirds of the season at a COP of three, and the furnace takes over below the balance point where gas is cheaper than resistance electricity. You keep two machines rather than one, which is the cost — but you get the best fuel at every temperature, which is more than either alone manages.
- Why does my heat pump blow cool air sometimes?
- Two normal reasons. A heat pump delivers air at around 95°F against a furnace's 120°F, so it feels cool on your skin even though it is heating the room — it simply runs for longer. And it periodically reverses to defrost the outdoor coil, which briefly blows genuinely cool air. Neither is a fault, and both surprise people coming from a furnace.
- How long does a heat pump last?
- Twelve to eighteen years, a little shorter than a furnace because it runs year-round rather than one season. A unit spending a lot of the winter short-cycling or fighting a load it cannot meet lands at the bottom of that range, which is another reason the balance point matters.
- Do I need a bigger electrical panel?
- Often, and it is the cost most likely to be missing from a quote. Resistance backup strips draw a great deal of current — enough that an older 100 amp panel may not have room for them alongside everything else. Ask for the electrical load calculation, not just the equipment price.
- Heat pump or mini split?
- The same technology, different distribution. A ducted heat pump uses ducts you already have; a mini split puts a head on the wall in each room and needs no ducts at all. If ducts exist and are in reasonable condition, ducted is cheaper and less visible. If they do not exist, a mini split beats installing ducts almost every time.
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About the author
Pablo Ruiz Quintero — Editor
Editor of MaterialsEstimator. Decides which documents count as a source, what every default value is, and where the line sits between what the reader parses and what the engines compute.
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