Contractor’s Guide to Recommending a Heat Pump vs. Furnace

If your customers are ready to replace their furnace, they may want to discuss options to increase energy efficiency. They could also have questions about maintaining their comfort year-round.

As an HVAC technician, you stay on top of the different types of heating and cooling systems, but technology is advancing all the time.

So is a heat pump, furnace or hybrid of the two the best heating system to recommend for your customers? Get the latest information about these three types to help them make the best decision.

Heat pump systems

Electric heat pumps, also known as air source heat pumps, can provide both heating and cooling. Heat pumps use energy to transfer heat rather than generate heat like furnaces do, which uses less energy. Typically they’re more efficient and can drastically reduce electricity bills.

Due to the belief that heat pumps aren’t as effective in colder climates, they’re less common in regions that experience frequent freezing below zero. However, advances in technology have improved heat pump performance and efficiency in low temperatures. Heat pumps can also pair with a backup heat source like a heat strip kit to ensure your customer stays warm even in extreme conditions.

Your customer could also save with federal tax credits for making their home more energy efficient, which can make initial installation costs more appealing. See the ENERGY STAR® tax credits your customers could qualify for.

Heat pump systems can be installed in homes with or without existing ductwork.

If ductwork exists in the home, a ducted unit can virtually drop in to replace a forced air or furnace system. Your customers who already had air conditioning will need to replace the condenser, and usually the coil or air handler will also need to be replaced, especially as the transition to A2L refrigerants continues.

And if there isn’t pre-existing ductwork, ductless mini-splits come in a range of sizes. These are also simple to install and offer your customer flexible placement options along with improved energy efficiency.

Furnace heating systems

Furnaces pull cool air in and use energy to heat the air and then redistribute it. As mentioned above, generating that heat uses more fuel, making them typically less efficient than heat pumps. They also don’t provide cooling like heat pump systems can.

However, the majority of American households have furnace heating systems, particularly in colder climates. As heat pump technology has continued to advance, replacing a furnace with a heat pump when it’s time to upgrade is becoming more common.

Energy sources for furnace heating systems include electricity, natural gas, propane, oil and even wood. Learn details about a few common types of furnaces.

Electric furnace

Compared to gas or oil, an electric furnace is less expensive to install, and upfront costs are lower. Maintenance costs are also typically lower, but electric furnace filters must be changed out as needed.

If your customer’s home doesn’t have natural gas lines or if they simply want to switch, an electric furnace is a great option for very cold climates.

While they are the most effective at generating heat among oil or gas furnaces, electric furnaces consume a lot more energy than heat pumps do.

Gas furnace

These use natural gas or propane to generate heat and the newer models in particular are typically more efficient than oil furnaces. They do present a risk of lower air quality inside the home.

If your customer simply wants to upgrade from an older model, replacement costs should be low. A gas furnace should have lower maintenance costs for the long term.

If your customer wants to switch to a gas furnace from electric or another heating system, initial expenses could rise if gas lines aren’t already in place.

Oil furnace

Buildings in climates with very cold winters often have oil furnaces. The oil is stored in a tank and not connected to local utilities, like the fuel for a gas furnace would be.

An oil furnace may have more long-term costs due to more frequent maintenance and fluctuations in oil prices.

Replacing an oil furnace with gas

If your customer wants to replace their oil furnace but isn’t ready to switch to heat pump systems, an efficient gas furnace could help them save over the life of the system.

Natural gas is often more affordable, and oil furnaces require more extensive maintenance than gas furnaces do. And allowing the utility company to handle supplying the fuel will save your customer a lot of time and hassle refilling their oil storage tank.

However, installing a new gas furnace may require running pipelines into the home if they’re not already there, which adds to the cost.

Replacing furnaces with heat pumps

If your customer is thinking about replacing their furnace with a heat pump, they will enjoy lower running costs with the increased energy efficiency. Upfront costs will be higher, not just due to the heating system price but also additional installation work.

While swapping an electric furnace with heat pumps is relatively straightforward, replacing an oil or gas furnace with electric heat pumps often follows a strict process that can vary by location.

Safely removing an oil furnace usually requires certification to not just disconnect the lines but also to remove the storage tank. The heat pump may also have higher electricity demands that need to be considered.

Replacing a gas furnace may require electrical installation to power the heat pump, a new air handler, and a new thermostat and wiring. You’ll also need to disconnect from gas lines and cap them according to code as well as ensure combustion venting is properly closed. Learn below about more upgrades your customer may need.

Upgrading power supply, wiring and thermostats

You’ll likely need to upgrade power supply if your customer is switching to an air source heat pump, but requirements vary based on the size of the unit.

Heat pumps typically require a dedicated 208/230V circuit. If you’re replacing an existing AC condenser, you may be able to use the existing circuit. If you’re replacing a furnace, you will need to add a new circuit.

Thermostats for heat pumps require an additional wire, the reversing valve wire. And as always, you’ll want to make sure the thermostat is compatible with the heat pump model, whether it’s single- or two-stage heating and cooling.

Pro tip: Make sure you know whether the heat pump you’re installing energizes the reversing valve during heating or cooling and use the appropriate terminal on the thermostat.

There is a range of smart, WiFi-enabled and programmable thermostats that are compatible with air source heat pumps.

Recommending a heat pump vs. furnace for your customers

For your energy-conscious customers, an electric heat pump provides much more heat energy than it consumes in electricity. Depending on the heating system it’s replacing, these heat pumps can save between $300 to nearly $1,000 a year in energy costs.

As mentioned above, natural gas is usually more affordable in the U.S. than the equivalent in electricity or oil. Oil prices can vary throughout the year as well as based on your customer’s region in the U.S., making it difficult for homeowners to plan their budgets.

If your customer has a natural gas furnace that has years of life left, it may not make financial sense to replace that with an air source heat pump for monthly or yearly savings on utility bills. Savings on an oil furnace may make the switch worth it, though.

In an ideal climate and with proper insulation, electric heat pumps are much more efficient for heating and cooling than gas and oil furnaces are, which could help your customer save over the course of years. If you’re discussing options with your customer because their current system is nearing the end of its operational life, air source heat pumps can be a critical part of the conversation.

While heat pumps cost more initially, the price can be offset with tax credits, and installation costs will vary with the type of system you’re replacing.

When recommending a heating system to your customer, keep in mind any existing ductwork, their interest in long-term savings and efficiency, the expected lifespan of their current system and the type of fuel system they prefer.

The hybrid: dual-fuel furnace and heat pump combination

A hybrid, or dual-fuel heating system, combines a furnace that uses natural gas, propane or oil with an electric heat pump.

The heat pump furnace combo could be ideal to keep your customers comfortable year-round if you’re in a region that experiences the weather fluctuations of all four seasons. The heat pump cools during warmer temps and heats when it’s cooler, and the furnace kicks for the very cold temperatures.

A dual-fuel system can give the best of both worlds when it comes to efficiency and weather considerations.

As with gas furnaces, installation costs will be higher if the structure doesn’t already have existing gas lines. If your customer opts for a dual-fuel system, they can likely use their existing furnace, and existing ductwork can remain.

Ferguson can help with heating systems

No matter which type of heating your customer prefers, Ferguson can help you find it. Shop heating and cooling products, parts and supplies to keep your HVAC business humming all year long.