When Isn’t a Heat Pump the Cheapest Way to Heat Your Home?

Hi guys, Dave here. And the implication of this question, "When aren't heat pumps the cheapest form of heat," is that there must be a time when they are the cheapest form of heat. So we're going to look at what's different about heat pumps now that makes them the least expensive, the most economical way you can heat your home, your shed, or your man cave. Maybe you're looking at building a mother-in-law house, a pool house, a cabin, something either on or off your property. Maybe you just want to get one 12,000 BTU mini-split heat pump because it may save you energy. So we're going to do a little analysis to see if it potentially will, and we're going to do it for the town of Peoria, Illinois.

Why Peoria? Well, there's a saying that if it plays in Peoria, it'll play anywhere. Companies like Crest would take their toothpaste from Cincinnati and put it on the shelves in Peoria, and if a new variation sold great there, they'd expand it nationally, or maybe not. Peoria sits in the northern part of DOE Region IV, so a lot of people have similar heating needs. If you're in the Upper Peninsula of Michigan or Duluth, your needs are a little different, and your analysis would give different results. But Peoria gives us a wide swath, I think, of the needs of a lot of you watching this. Maybe you're even in a slightly warmer region than Peoria.

If you look at the graph on the left, that shows the time you actually need heat. About 76% of the time you need heat, it's above 29 degrees Fahrenheit, and only about 6% of the time is it below 10 degrees. The problem is that this isn't your actual burn time, meaning when the unit is actually running. The graph on the right shows the actual runtime, and that looks a little dicier: time above 29 degrees drops to only 52%, while the time it's super cold is 16.1% of runtime. That colder region is the area where heat pumps can now perform well, when they used to struggle.

Heat pumps used to bottom out around 35 to 38 degrees and were pretty worthless below that, covering that big cold swath poorly. The problem was the technology wasn't there yet. Now there's something called an inverter compressor, which gets units down to around 14 degrees. The newer R-32 refrigerant gets them down to about 5 degrees. And some units, like ours, use something called enhanced vapor injection (EVI), which allows heating even when the outdoor temperature is minus 22 degrees Fahrenheit. Our unit isn't much of an outlier there; you can find others with similar capability. Ours has an HSPF2 of 10.8, which is higher than older units, and that's tied directly to the fact that it can still heat effectively at these colder temperatures.

So here are the four types of heat: electric baseboard, home heating oil, natural gas, and heat pumps. The good news about electric baseboard heat or a portable electric heater is that it's 100% efficient. The bad news is that in Peoria you're paying over 18 cents a kilowatt-hour, so if it's costing you 18-plus cents to produce one kilowatt-hour of heat, that's not your best option. It's even worse than the second-worst option, home heating oil, which is also expensive. If you currently have one of these two, get a heat pump if you can. If you don't already have natural gas and can get it cheaply, that's worth considering too, but weigh it against the rest of this analysis.

Electric baseboard heat, home heating oil, and natural gas all do essentially the same thing: they burn energy. Home heating oil burns at maybe 85% efficiency, a natural gas furnace maybe 95%, so those are pretty efficient in their own right. But heat pumps work differently. Instead of burning something, they carry heat from outside to inside. It's analogous to a delivery truck that only gets 5 miles to the gallon but is hauling 10,000 gallons of fuel; the fuel efficiency of the trip isn't the whole story. At warmer temperatures, it costs literally pennies to produce one kilowatt-hour of heat with a heat pump, so above 40 degrees, it's a no-brainer to use one.

The orange line on our chart is a heat pump without solar assist. The blue line is ours with solar panels plugged in, which changes the math. We're assuming about four hours a day of usable sun in Peoria, based on NOAA and Weatherspark data. If you haven't checked out weatherspark.com, it's amazing: it shows how long your heating season is, your peak temperatures, humidity levels through the year, precipitation, all of it. Peoria averages around four hours of sun a day statistically, and we're using those hours to run the unit for free off solar power during a good chunk of the day.

Carrying heat from outside to inside gets tougher the colder it is. Heat pumps from the early 2000s couldn't get their outdoor coil colder than about 30 to 35 degrees, so once the coil itself was only 35 degrees, it couldn't absorb much heat from air that cold. Our coil gets down past minus 22 degrees, so it can still absorb and carry heat even in serious cold. The tradeoff is that at these colder temperatures, the heat pump needs a lot more electricity to move that heat, like that same delivery truck now climbing a steep hill and getting only 2 miles to the gallon.

But if you look at what you're actually spending, there's a clear crossover point. For our unit without solar assist, at about 28 degrees, natural gas becomes less expensive to run than the heat pump. So if you're someone who goes to Florida for the winter, you're not going to spend much time in that colder region at all, and a heat pump is going to be your cheapest heat for sure. If instead you're heating a ski cabin you only visit on weekends when it's always six degrees out, and you already have natural gas there, keep it, because that's probably your best bet for those consistently cold conditions.

Looking at the whole winter, the HS12 heat pump without any solar panels, on the warmer end of the chart, clearly beats natural gas, and on the coldest end, natural gas takes noticeably less to run than our standard, non-solar-assisted HS12. But adding it all up over the full winter, natural gas came out to $187 for a 500 square foot space, while the HS12 SuperHeat heat pump came out to only $183 for that same period.

You might say, "Hey Dave, I'm not heating my whole house for $183, I'm paying $1,000 a winter." That's probably because you have something like a 2,000 square foot house, since this analysis is based on 500 square feet. Why 500 square feet? Because the rule of thumb is that a 12,000 BTU unit, which is what we used here, will heat and cool about 500 square feet. Also note we dropped electric baseboard heat and home heating oil from this final cost comparison entirely; get rid of those if you possibly can.

Hopefully this helps. If you spend most of your winter time inside during the coldest stretches, natural gas may still be your best bet, and the analysis will look a little different for you. But this is based on the unit running all winter long. Today's heat pumps, including ones more efficient than ours, are out there. Ours is 10.8 HSPF2 and works well for its price point, but you can find units rated even higher than 10.8. If you're in a more northern climate, Region V, you'll probably want to look into one of those.

For a good swath of America, though, based on this data, it's cheaper to run a heat pump than natural gas. Put your questions from all this in the comments. We are Airspool. Subscribe to the Airspool channel if you want to talk about solar, air conditioning, heating, or solar-assisted heating and air conditioning. Thanks for your time.