Will I save money on my Electric Bill by using a Heat Pump?

Will I save money on my Electric Bill by using a Heat Pump?

Heat Pumps
What is a heat pump?

A heat pump is a device used to transfer heat energy from one location (the ‘source’) to another (the ‘sink’ or ‘heat sink’). A heat pump can operate in reverse as an air conditioner, transferring the heat from the inside of a house to somewhere outside.

What are the benefits of heat pumps?
  • They transfer heat energy, not generate it.
  • They work significantly more efficiently than conventional furnaces and thus use less electricity.
  • Most heat pumps also provide air conditioning in the summer months (they still require auxiliary heating though). Therefore, they eliminate the need for separate furnace/AC units.
Will I save money on my electric bill by using a heat pump?

A heat pump usually costs more to install than a gas furnace but may save you money in the long run.

Many homeowners buy a heat pump because they want to reduce their utility bills and live green. Heat pumps use electricity, but they’re much more efficient at heating your home than other types of equipment. Some models can be paired with solar panels or another renewable energy source to essentially give you free heat.

Compared to a standard gas furnace, however, which will always be less expensive to purchase up front, it’s not easy to say whether buying and running a heat pump is worth the extra cost because there are so many factors involved in determining monthly operating costs. But if you look at the big picture, there are some things to consider when thinking about whether a heat pump is right for you.

Before considering whether to buy a heat pump, take a moment to estimate how much you spend on heating your home in a typical winter. It’s important to have an accurate idea of this number to do cost comparisons in future years. Add up all of your monthly expenses for natural gas or fuel oil, cleaning supplies, and so on, then divide by 12. This is approximately what it will cost each month to keep your home warm with either type of furnace.

Now compare that figure with the estimated annual operating cost of owning a heat pump. If the initial investment seems worth it based on these numbers, you should also take a look at the heat pump’s Energy Star score.

The higher this number is, the more efficient your equipment will be in terms of both installation and cost.

Supply and demand: The price of natural gas has been low in recent years, so most people using gas furnaces haven’t seen their bills go up dramatically. While there are some signs that prices might rise over the next decade, it’s hard to say for sure what changes we’ll see or when they’ll happen.

With that in mind, if you’re considering buying a new furnace soon, it’s probably best to choose one with lower operating costs since issues related to supply and demand may make gas artificially expensive in the future. Heat pumps currently cost more per BTU than gas furnaces, but they’re generally more energy-efficient. This may mean that during the winter of high natural gas prices it’s worthwhile to go with an electric heat pump for better affordability.

Heat pumps are usually more expensive to install, however. If you sell your house soon after installation, some buyers might not see the benefit and choose a different model instead. It’s also worth noting that some people say heat pumps reduce air quality because they bring cold air in from outside. When used without insulation, this cold air can lower humidity levels in your home which can increase the risk of respiratory illness.

The bottom line:                         

For most homeowners, buying a heat pump makes sense if they plan on staying in their home for at least eight years. It’s important to consider additional costs like installation, repairs, maintenance, and the cost of operating your heat pump over time since all of these will affect your monthly utility bill.

If you’re considering buying a heat pump for green living purposes, it’s also worth noting that there are many other ways to green up your home besides installing new heating equipment. Buying Energy Star appliances, replacing old windows and caulking drafty spots can make a big difference in how much you spend on heating each year. We recommend discussing your heating needs with a professional who can help you decide what options are best for your home.