Pump It Up: The Heat Pump Era Has Arrived
Many in the energy efficiency community have touted the benefits of air-source heat pumps, or “ASHPs,” for years now. What’s not to like? According to ENERGY STAR®, ASHPs are “so efficient that they can deliver up to three times more heat energy to a home than the electrical energy they consume.” This means that, in comparison with gas-fired furnaces (which can be up to 98% efficient), heat pumps use about 65% less energy to heat a space or a building.
And while they absolutely perform best in moderate climates, modern cold-climate air-source heat pumps have proven they can continue delivering useful heat — and remain far more efficient than common heating equipment — even as temperatures drop toward –15 °F. Down around 5 °F, cold-climate ASHPs can maintain a coefficient of performance, or “COP,” above roughly 2.1–2.4 — more than double the efficiency of electric resistance heat or natural gas furnaces.
Are there any drawbacks to ASHPs?
As with many previous energy-saving technologies, the primary challenge surrounding adoption has historically been installation cost — particularly for retrofit projects and end-of-life replacements. Here in our home state, UniColorado Heating & Cooling estimates the average residential heat pump project costs between $11,100 and $28,210, depending on a home’s heating and cooling requirements. They also note that additional expenses may include electrical panel upgrades, refrigerant line set installation, and new 220V circuits, depending on a home’s existing electrical infrastructure.
Looking at these numbers, it’s easy to see why retrofits and end-of-life replacements can be difficult for families to manage. It’s also no surprise that many localities with a high percentage of heat pump deployment are areas experiencing substantial new construction, where incremental costs are far lower.
But much of that is starting to change. Based on our internal research, Peak Utility Advisors is aware of at least four manufacturers producing window or packaged air-source heat pumps. Many of these models are capable of operating reliably in extreme cold conditions — which we define as temperatures as low as –22 °F. From window-mounted units to systems designed for traditional Packaged Terminal Air Conditioner (PTAC) footprints, efficient electric heating is becoming increasingly accessible.
Why does this matter? When we consider the heat-transfer potential of this equipment alongside reduced energy use and the ability to extend the life of existing heating systems, the economics can be compelling. Add in benefits like improved controllability, smart features, and — perhaps most importantly — ease of installation, and these systems begin to look truly game-changing. With some models operating on a standard 120V plug, the barriers to upgrading building heating systems are being meaningfully lowered.
From a business perspective, however, installation of such units can still introduce challenges. Electrical panels may require upgrades, and annual peak electrical demand may increase. Under certain utility rate structures, these changes can lead to higher overall energy costs. That’s why, at Peak Utility Advisors, we believe it’s important to consult professionals when evaluating investments in capital equipment. Even as federal incentives evolve, state, utility, and local programs continue to play a major role — and we help clients navigate and secure the incentives available where they operate as part of a broader cost and risk assessment process. While modeling HVAC costs can be complex, developing a clear picture of comparative expenses can be invaluable during the decision-making process.
Peak Utility Advisors helps businesses and building owners navigate energy efficiency opportunities, equipment upgrades, and the evolving landscape of building energy use. To discuss how modern heat pumps, electrification, and utility incentives may impact your operations or long-term planning, contact matt.jochym@peakutilityadvisors.com or (970) 235-1098.
