Scrub Hub: Are heat pumps better for the environment and my wallet?

Editor's note: This story was originally published in 2022. We are republishing it as part of our winter coverage.

We’ve all heard the warnings: Winter is here and sky-high heating costs are expected to send energy bills through the roof. That’s because much of the country and state are dependent on fossil fuels for heating. 

According to the Department of Energy, nearly half of American homes use natural gas heating. In Indiana, that goes up to six out of 10 homes with natural gas for heat, while only a third have electric heating. 

And an increase in heating costs, as well as cooling, is no small thing. Recent data suggests heating and cooling accounts for as much as half of a home’s energy usage throughout the year. 

Scrub Hub: Solar scammers want your money. How do I spot and avoid them?

So it comes as no surprise that homeowners are looking for ways to lower their energy consumption, save on their bills and even cut back on emissions associated with heating and cooling. 

In that vein, we’ve heard from a few readers wanting to know if heat pumps could be a solution. That’s why for this Scrub Hub, we are looking at the question: How do heat pumps work, and are they a good option in Indiana? 

To answer that question, we’ve spoken with an expert on the topic and looked at some of the different information on tax credits. 

Short Answer: Moving heat, not generating it

Across much of Indiana, air conditioners and furnaces are a common combination for heating and cooling the home. Heat pumps, on the other hand, aren’t as common and aren’t as well understood. 

Davide Ziviani, an assistant professor of mechanical engineering at Purdue University, said they’re quite simple. Heat pumps are basically an air conditioning unit that can also go in reverse, he said. 

Heat pumps work not by generating their own heat — rather, they move heat around. 

“And the fact that a heat pump can operate in both ways, doing both heating and cooling, that’s why it’s appealing,” said Ziviani, who also is the Director of the Center for High Performance Buildings. “Especially in climates where you want both.” 

There are two types of heat pumps: air-source and ground-source pumps. The difference is where they are pulling the heat energy from to either heat or cool the indoors. As the names suggest, air-source pumps pull from the ambient air outside the home while those that are ground-source drill down below the Earth’s frost layer to access the geothermal energy underground. 

During the summer, heat pumps take the hot air from inside the home and send it outside. Then during the winter, it pulls heat from the air or ground outside and brings it inside. As counterintuitive as it may seem, there is always some "free heat" energy in the air, even on cold days. The air pumps collect that, compress it and bring it inside.

Unlike many of their furnace counterparts that run on gas, heat pumps run on electricity. 

While the penetration of heat pumps in Indiana and the U.S. has been pretty slow, they are used “all over” in Europe and Asia, Ziviani said. Heat pumps are considered a mature technology, he added, but they have continued to improve and become more efficient in recent decades. 

Long Answer: 'Heat pumps make sense' 

We know how heat pumps work, but now the bigger question is if they can work in Indiana. I know this is the long answer section, but the short answer is: Yes, it can work. 

Indiana has a mixed climate — it can have very hot and humid summers, cold and blustery winters, and then a lot of the in-between mid seasons. When heat pumps were first created, Ziviani said, they couldn’t handle as wide of a range of temperatures. Lots of technological improvements, however, have helped make them much more efficient and able to work in a variety of temperatures. 

Still, when the outside air falls below freezing and into the single digits, the heat pumps don’t work quite as well. That’s especially true for air-source pumps, because they have to work harder to extract the small amount of heat out of the ambient air. It’s a little easier for ground-source pumps, as the underground temperatures and heat are a bit more stable. 

In Indiana, we have three months — December, January and February — where the average low is below 32 degrees Fahrenheit, according to weather data.

That’s why Ziviani recommends having a back-up, or supplemental source, for heating such as a small furnace during those coldest of cold days. But don’t let the winter cold temperatures scare you. There are a few states in the Northeast including Maine, Massachusetts and New York that are just as cold and have higher adoptions of heat pumps. 

Overall, Ziviani said heat pumps make sense for Indiana — it’s proven, he added. The university has a research house that they’ve retrofitted with insulation, new winder frames as well as a heat pump. 

Ziviani and his colleagues measured energy usage over three years, including through a polar vortex, and they saw significant energy savings and ultimately bill and cost savings. 

Heat pumps will always be more efficient than a gas furnace or heat, Ziviani said. Their efficiency is measured by looking at how much heat or cold is produced with a certain amount of energy input. 

With a furnace, they at most will only be 90% to 95% efficient. That might seem really good, Ziviani said, but heat pumps get much more. They are as much as 300% to 400% efficient by comparison. 

“So if you are using one kilowatt-hour and getting three or four times as much heat, then you are not needing as much energy,” Ziviani said. “So it will always yield some emissions and energy savings.” 

If homeowners don’t need as much energy to heat or cool their homes, that translates to lower electricity bills. But that’s not the only kind of savings they can achieve, Ziviani added. 

At the very individual level, there's less gas burned in the home. A growing body of research suggests that gas appliances can pose a serious health risk. Given that heat pumps run on electricity, their environmental benefits depend on how electricity in the region is produced. 

If much of the utility’s energy supply comes from renewables, then the heat pump definitely is more green. If the electricity comes from fossil fuels, then there still are indirect emissions associated with the power to run the heat pump. 

But Ziviani reminds that needing less power means fewer emissions. 

The Purdue expert acknowledges that there are questions and concerns about the costs of purchasing and installing a heat pump. But the cost of an air-source heat pump — depending on the brand, size and efficiency level of the unit — is similar to that of a gas furnace. There may be a few additional costs for adjustments and retrofits to the home during installation. 

“But it’s doable, not outrageous,” Ziviani said. “And it’s always a question of if a homeowner wants to spend money upfront to save in the long-run.” 

Ground-source heat pumps can be quite a bit more expensive given the underground work. Ziviani said those pumps are best planned during construction when designing the home and ducting system. 

Legacy pollution: Indiana is failing to clean up its toxic coal ash pits, new report says

Heat pumps are a timely topic, Ziviani said, given some of the tax credits and rebates to help encourage their installation and help cover costs. The Inflation Reduction Act is packed with provisions to incentivize energy efficiency upgrades. 

As part of the federal tax credit program, homeowners that install heat pumps after the new year will be eligible for 30% of the total cost of what they paid for their heat pump, including the cost of labor, up to $2,000. For more on the credit and rebate options, Consumer Reports has some great information.

If interested in a heat pump, many HVAC companies can install heat pumps. As always, it's best to work with a professional to figure out the right size and type based on your heating and cooling needs.

If you have more questions about heat pumps, other energy efficiency options, or any other topics, let us know!

You can ask us by submitting a question through our Google form below. Can’t see the form? Click here.

Call IndyStar reporter Sarah Bowman at 317-444-6129 or email at sarah.bowman@indystar.com. Follow her on Twitter and Facebook: @IndyStarSarah. Connect with IndyStar’s environmental reporters: Join The Scrub on Facebook.