Heat pumps are rapidly becoming the go-to solution for both heating and cooling, but how exactly do they work, and why are they getting more efficient with each new generation? Let’s dive in.
How Do Heat Pumps Actually Work?
The basic principle behind a heat pump is surprisingly simple—it moves heat. When you're cooling a room, the heat pump draws in warm air, extracts the heat, and then blows cold air into the space. When you switch it to heating mode, the process reverses: the pump extracts heat from the outside air and adds it to the air inside.
Sounds straightforward, right? So, why were heat pumps historically not so great in colder climates?
Why Cold Climate Heat Pumps Have Improved
The biggest challenge with heat pumps used to be their performance in freezing temperatures. Traditionally, they lost efficiency when the mercury dropped. Mike Cham, CTO of Encentiv Energy, explains: “Heat pumps were very popular in warmer regions like the South because the temperatures never got cold enough to reduce their efficiency.”
However, modern heat pump technology has come a long way. “Today, heat pumps are so efficient that temperature loss in colder environments is almost a non-issue,” Cham says. In fact, some cold climate models are designed to maintain their rated efficiency even down to 22°F (-6°C). That makes them an increasingly popular choice in places with harsh winters—like Scandinavia, where about 60% of homes in Norway use heat pumps exclusively for heating.
The Role of the Building Envelope in Heat Pump Efficiency
While heat pumps are impressive, they’re not a magic fix-all. To get the best performance, the building needs to be properly sealed. A well-insulated building envelope—think solid insulation, well-sealed windows and doors—is essential to making sure the heat pump can do its job efficiently.
Cham explains it this way: “You can install the best heat pump on the market, but if your building isn’t well-insulated or you have air leaks around your windows and doors, you’ll either be uncomfortable or your heating bills will skyrocket.”
If the heat pump is too large or too small for the space, or if the building’s insulation is inadequate, you’re just wasting energy. So, a little upfront investment in energy audits and insulation upgrades can make all the difference in efficiency and overall savings.
The Cost Barrier: How to Make Heat Pumps More Affordable
While heat pumps are more affordable than ever, they still represent a significant upfront investment—especially when you factor in the cost of upgrading your building’s insulation and sealing any leaks. But there’s good news: there are programs and rebates that can help lower the costs, especially for building owners in colder climates.
Thanks to the Inflation Reduction Act, state and utility programs are offering rebates on energy-efficient electric appliances, including heat pumps. UtilityGenius is tracking these rebates, making it easier for consumers and contractors to find the best prices available. Maine, for instance, runs a cold climate heat pump rebate program, which helps building owners save even more on installation.
The tricky part, however, is that most cold climate heat pump rebates come with a caveat: to qualify, you often need to combine them with weatherization upgrades. This is where the Inflation Reduction Act really shines, as it includes dedicated funding for weatherization, which can be used alongside heat pump rebates to make the whole process more affordable.
The Road Ahead: Making Heat Pumps Accessible for Everyone
UtilityGenius is quickly adding intelligence about state level incentives, which will align with HOMES/HEAR programs funded by the IRA. These programs aim to make energy-efficient upgrades like heat pumps more accessible to building owners across the country—especially those in colder regions where efficient heating is more critical.
By combining advanced technology, rebates, and weatherization funding, we can make cold climate heat pumps a reality for more building owners, slashing heating bills and lowering carbon footprints along the way.
Why It Matters
The takeaway? Heat pumps are no longer just a warm-weather solution—they’re a smart, sustainable choice for all climates. With improving technology, state and federal incentives, and a focus on building energy upgrades, it’s never been easier to make your building more energy-efficient while saving money in the long run.
For more details on how to take advantage of state-level funding and rebates from the Inflation Reduction Act, check out our recent blog post on HOMES/HEAR programs and how they can help you make the leap to a more sustainable, energy-efficient building.