Heat Pumps Outsell Gas Furnaces Once Again: What's the Difference?

Home heating and cooling needs have shifted over the years, and now it seems that heat pumps are having a moment. For the second year in a row, heat pump shipments outpaced gas furnaces in the US, the Air Conditioning, Heating, and Refrigeration Institute reported earlier this month.

Heat pumps have been coming on strong in the home heating market, due in large part to their energy efficiency. Instead of relying on gas, heat pumps use electricity to efficiently move heat in and out of the home to achieve desired temperatures. A heat pump helps you both heat and cool your home. During colder months, heat pumps source warmth from the ground and air from outside and transfer that into the home.

Even on exceptionally cold days, heat pumps can efficiently source heat from outside and keep the home warm. During warmer months, heat pumps transfer the heat from inside the home to the outside to cool the home down. Heat pumps deliver efficiency by not actually creating heat at all. Instead, they transfer warm air to and from the home to create desired temperatures inside.

Heat pump sales have been bolstered not only by homeowners desiring a more efficient home air conditioning solution for the home, but also by energy-conscious governments across the US that use rebates and tax credits to spur demand. Manufacturers last year shipped more than 3.6 million heat pumps across the US, outpacing the nearly 3 million gas furnaces shipped last year, the heating and air conditioning trade organization said.

Here's what you need to know about heat pumps and how they compare to gas furnaces.

What is a gas furnace?

Gas furnaces have long been the top choice for American homeowners, and for most of the past decade easily outpaced heat pump shipments. But that trend appears to have shifted. Indeed, while heat pump sales slipped 16.6% last year as consumer demand for all heating and air conditioning products cooled, the drop was far better than the 22.8% decline in gas furnace shipments over the same period.

Gas furnaces use fuel -- in many cases, natural gas -- to power the operation that produces heat for a home. Once the furnace is powered with natural gas, it uses a pilot light or electrical ignition to start a burner that burns the fuel and activates heat exchangers to transfer heat. A fan then blows heat through ductwork throughout the home to keep it warm.

Unlike a heat pump, gas furnaces can only heat the home. If homeowners want to cool their home, they'll need a separate air conditioner unit to send cool air through ductwork.

Heat-pump pros and cons

In general, gas furnaces last longer than heat pumps. The latest industry estimates suggest heat pumps will last about 15 years before needing to be replaced, compared with 20 years for gas furnaces. And in homes where natural gas is already available, installing a gas furnace is usually cheaper than installing a new heat pump system. Also, keep in mind that heat pumps are modular systems, so homeowners may need to install more than one to properly heat and cool the home, depending on the size of their house.

Heat pumps have also been criticized for not working as well in cold-weather states where frigid temperatures can last for months. However, that's becoming less worrisome as new, more capable models are released. At CES last month, several heat pump makers, including Bosch, Lennox and Carrier, all showcased new models designed to work just as well as gas furnaces in cold weather.

Heat pumps shine brightest when it comes to energy efficiency. Depending on the heat-pump model, between 62% and 95% of households could reduce their home-energy bills if they opted for heat pumps, according to a recent study from the National Renewable Energy Laboratory. The organization also found that heat pumps can reduce home energy usage by 31% to 47%, depending on the model.

Heat pumps are better for the environment

Heat pumps are far more efficient than gas furnaces because instead of using fossil fuels to create heat for a home, they transfer heat from one environment to another, all while relying solely on electricity to make that happen. And since heat pumps can both heat and cool a home, they eliminate the need for air conditioning units that are inevitably less energy-efficient and drive energy bills up.

The impact of that technology is significant, the NREL found in its study. An increase in the number of heat pumps across the US could reduce residential greenhouse gas emissions, a key contributor to climate change, by up to 64%, the organization reported.

Future of heat pumps

The potential impact that heat pumps could have on the environment is driving widespread investment in the technology. Industry experts say that will ultimately prompt significant heat pump adoption across the US.

Last year, 16% of the estimated 131 million American households were running on heat pumps, according to data released by not-for-profit organization Rewiring America. The organization said it's possible, with widespread homeowner adoption, government support and national commitment to net-zero carbon emissions, that all 140 million households in the US could be powered by heat pumps by 2050.

Still, there's no guarantee that will happen. Just 25 governors across the US have pledged to install a total of 20 million heat pumps across their states by 2030. Only nine states -- California, Colorado, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon and Rhode Island -- have said they plan for heat pumps to make up 90% of home heating sales by 2040.

Meanwhile, the federal government has passed regulations that allow taxpayers to receive up to a $2,000 federal tax credit with the purchase of heat pumps. Several states and electrical companies also offer rebates to spur more sales.

It's difficult, therefore, to say just how popular heat pumps may become. But with better energy-efficiency, significant government backing and a growing customer base, it certainly looks possible.