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Heat Pump

What is a Heat Pump?

A heat pump (HP) is an HVAC component that both heats and cools your home, depending on the season. Don’t let the name confuse you. An HP in cool mode can cool your home just like an air conditioner would.

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How does a heat pump system work?

A heat pump uses the refrigeration cycle to either heat or cool your home. Think of a heat pump as a heat transporter constantly extracting heat and moving warm air from one place to another, to where it’s needed or not needed, depending on the season. 

Even in air that seems too cold, heat energy is present. When it’s cold outside, the HP extracts heat from the air and transfers it inside during the heat exchange process. When it’s warm outside, it reverses directions and acts like an air conditioner, removing hot air from your home.

Types of heat pumps

There are two main types: air-source heat pumps and geothermal heat pumps.  

Ducted air-source heat pump

Electric air-source heat pumps (ASHPs) are the most common and the most affordable. The ASHP sits outside your home like a central AC unit does. Traditional ducted systems connect to your home’s ductwork and send heated or cooled air into every room of your home. 

Ductless mini-split heat pump

A mini-split heat pump, or ductless heat pump, is also an ASHP system. The difference is that this system works in homes or areas of your home where there isn’t any existing ductwork. The outdoor unit connects to one or more indoor units via refrigerant lines. Ductless mini-split air conditioning, as well as multi-zone mini-split heating and cooling systems are available.

Geothermal heat pump

Geothermal heat pumps (GHPs), also known as ground-source heat pumps or water-source heat pumps, use the Earth’s relatively constant temperature to heat and cool your home. GHPs use a network of fluid-filled pipes buried underground (ground loop system) to exchange heat with the soil rather than the air.

Air-source heat pump vs. geothermal heat pump

HP technology is more efficient for heating and cooling than an air conditioner + furnace combination. But which system is right for you? Here are some pros and cons of an ASHP vs GHP system to help you decide.

ASHP pros and cons

  • Less expensive to install than a GHP system
  • Don’t require a big yard
  • Last +/- 15 years
  • Easy to repair or service

GHP pros and cons

  • More expensive to install than an ASHP
  • Require space in which to bury the underground piping system
  • Last 20+ years for the HP and up to 50 years for the ground loop system
  • Require specialized service and repair

If you have a large property and the funds, a GHP system might be right for you. If space and budget are a consideration but you want to increase energy efficiency, an ASHP system might be the way to go.

The rest of this article will focus on ASHPs since that’s what we design and manufacture.

Components of a heat pump heating and cooling system

There are three common types of ASHP systems: a traditional split system, a packaged heat pump system, and a ductless mini-split heat pump system. Let’s take a look at the components of each.

Split system heat pump

A traditional split system pairs an outdoor heat pump with an indoor air handler. The outdoor unit uses refrigerant in the heating and cooling cycle. The heat pump is equipped with a reversing valve that reverses the flow of refrigerant based on the temperature outside and the indoor temperature you have set on your thermostat. 

Air handler

An air handler pairs with the outdoor heat pump to circulate heated or cooled air, depending on the season. Together, the heat pump and air handler comprise a matched system. The air handler contains a coil and a fan. The coil acts as an evaporator coil during cooling and as a condenser coil during heating.

Packaged heat pump

A packaged heat pump system contains the HP and air handler all in one cabinet. Package units are well-suited to smaller homes without a lot of space.

Ductless mini-split heat pump 

A mini-split heat pump pairs with one or more indoor units to heat and cool your home without ductwork. This can be a heat pump AC unit that only provides cooling, or a full heating and cooling system.

Indoor ductless unit(s)

The indoor units can be ceiling cassettes, wall-mounted, or floor-mounted. Each unit has its own remote control to provide you with precise climate control for each space.

Heat pump vs air conditioner: What’s the difference?

Heat pumps and central air conditioners use the same refrigeration cycle technology to cool your home. They share the same energy-efficient features. Minus a few small technical differences, heat pumps and air conditioners cool your home in the same way, with no real difference in comfort quality, energy efficiency, or energy costs.

The main difference between an HP system and an air conditioning system is that a heat pump can also heat your home.

Heat pump vs gas furnace: What’s the difference?

The main difference between the two is how they generate heat. A heat pump uses electricity to move heat from one place to another. A furnace burns fuel to create heat. Because it runs on electricity, a heat pump produces no carbon emissions. Carbon emissions have been proven to contribute to climate change. This makes it a sustainable choice for the future.

In addition, an electric HP can be up to 300% efficient, whereas the most efficient furnace is only about 98% efficient. Look for units with high energy efficiency ratings such as seasonal energy efficiency ratio (SEER2) and heating seasonal performance factor (HSPF2)

Lastly, a heat pump will also cool your home in the summer.

Is a heat pump right for your home?

Where air-source heat pumps work best

Electric ASHPs are best suited for moderate climates, and a supplemental heating source may be needed for lower temperatures. As a year-round solution for home comfort, Trane heat pumps can become a key part of your matched system. An independent Trane dealer can help you decide if a heat pump system is right for you.

Gas furnace to heat pump conversion

If you have an old gas furnace and you live in a moderate climate, you might want to think about a gas furnace to heat pump conversion. You simply replace the furnace with an air handler and the outdoor AC unit with a heat pump.

We make it easy to make the switch with our plug-and-play Modular Variable Speed Air Handler. It fits in the same space as your old furnace and doesn’t require any electrical upgrades. 

Dual-fuel heat pump systems

If you live in a colder climate where winters have temperatures that frequently fall below 35 degrees, you can still use a heat pump to heat and cool your home. You just may want to pair the HP with a new, highly efficient gas furnace. 

This hybrid heat system, or dual-fuel system gives you the best of both worlds. The electric heat pump runs in heat mode in the fall and spring and for at least some of the winter. When the temperatures drop below a pre-set level (usually 40 degrees outside), the gas furnace takes over the heating duties. Your system makes the change automatically and will switch back to the electric HP when temperatures rise again.

Cold climate heat pumps 

Another option that is still in development is the cold climate heat pump (CCHP). CCHPs are designed to operate in extreme cold conditions. The Trane prototype successfully completed the Department of Energy’s Cold Climate Heat Pump Challenge in 2024. It is undergoing design and efficiency enhancements and may be available to homeowners in 2025.

Where Trane/Mitsubishi heat pump systems work best

Trane/Mitsubishi ductless systems are best suited for homes without ductwork (either older homes or new construction) as well as areas of your home that need a boost in the heating or cooling department.

Let’s say you have a lake cabin in Minnesota or the Adirondacks. You have baseboard heat that doesn’t work so well anymore. But until a few years ago, you never felt like you needed air conditioning. But now, summers are sweltering. 

You could easily add a mini-split air conditioner to help cool things off. Or you could replace the baseboard heat with a multi-zone ductless heating and cooling system for year-round comfort.  

Or maybe you want to convert your attached garage into extra living space. A ductless system is the perfect heating and cooling solution. 

Pro-Heat Advantage

Even in outside temperatures as cold as -13º F, our Pro-Heat INVERTER technology will keep your home comfortable. Well-suited for cold weather climates in the northern half of the United States, Pro-Heat systems continue to provide heating when temperatures drop well below zero.

Learn about our best ductless mini-splits.

Heat pump sizing

Correct HVAC sizing is vital to ongoing energy efficiency and comfort. An improperly sized unit can result in inadequate heating and cooling and problems with humidity. The table below gives you a ballpark figure of what size unit you might need for your home based on the square footage of your home. 

Home size (sq. ft.)Unit Size (tons)Unit Size (BTUs)
1000 sq. ft.2-ton heat pump24,000 BTUs
1500 sq. ft.3-ton heat pump36,000 BTUs
2000 sq. ft.4-ton heat pump48,000 BTUs
2500 sq. ft.5-ton heat pump60,000 BTUs

But the best way to know what size unit you need is to consult with an HVAC professional. They will do some precise calculations, considering a range of factors. Larger homes may need more than one system.

Get the best heat pump installation

To get the best installation, you need to find the best unit for your home and hire the right, experienced heat pump installer. Because a heat pump system is only as good as its sizing and installation. Be sure to work with an HVAC company with expertise in HP system design and installation. Follow our heat pump purchase checklist to help ensure your satisfaction. 

Heat pump cost

Your HP installation cost will depend on numerous factors. These can include:

  • Unit size (capacity)
  • Efficiency ratings
  • Heating and cooling stages 
  • Complexity of the installation
  • Whether you need new ductwork or duct sealing
  • Whether this is a heat pump replacement or you are replacing an AC and furnace combo
  • Whether you choose a split system, packaged unit, or ductless system
  • And more

The best way to find out the upfront costs of installing a new HP system is to get quotes from several HVAC contractors near you.  

Heat pump tax credits and rebates

Keep in mind that you can help offset the cost of a new heat pump system by choosing ENERGY STAR®-certified units that qualify for federal tax credits, heat pump rebates, and utility rebates. The energy tax credit is up to $2,000 for a qualified unit and is available to anyone anywhere in the country.

Available rebates will vary based on your location and income. State-administered HP rebates available under the Inflation Reduction Act (IRA) of 2022 can go all the way up to $8,000

Check the Department of Energy (DOE) tracking website to see where your state is in the process. In addition, some utility companies offer rebates for energy-efficient HVAC upgrades. Check your energy provider’s website.

Finally, look into your HVAC financing options and determine the best way to pay for your new system. The money you save each month on your utility bills can help you make monthly payments on the new system.

Heat pump repair

HP is not that much different than AC or furnace repair, but you want someone familiar with HP systems – ideally, the original installer. The best way to prevent problems from occurring is with regular heat pump maintenance.

That means changing the air filters regularly and scheduling spring and fall HVAC maintenance. Taking care of your system can help prolong the life of your heat pump and protect your investment.

Heat pumps for homes: Now is the time

If you want to replace an aging or inefficient HVAC system, now is a great time to install a new heat pump system. You should notice an immediate decrease in energy bills when installing a more efficient system. If you’re replacing a gas furnace, you’ll also decrease your carbon footprint. With all of the tax credits, rebates, and HVAC financing options available, now is truly the best time to buy a heat pump.

Why you can trust Trane®

When we put together information like this, our goal is to help homeowners like you make informed decisions. We work with HVAC engineers and HVAC professionals with decades of experience to provide you with accurate and up-to-date information. Our glossary items and blogs undergo expert review to ensure you get the information you need.

Find out if a heat pump is right for your home. (Where you live matters).

Contact a local dealer

Dealers can answer questions, help you find the right products for your home, and repair your system.

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