For climates with moderate heating and cooling needs, heat pumps offer an energy-efficient alternative to furnaces and air conditioners. Like your refrigerator, heat pumps use electricity to move heat from a cool space into a warm space. This makes the cool space cooler and the warm space warmer. During the heating season, heat pumps move heat from the cool outdoors into your warm house. During the cooling season, heat pumps move heat from your cool house into the warm outdoors. Because they move heat rather than generate heat, heat pumps can provide up to 4 times the amount of energy they consume.

If you heat with electricity, a heat pump can trim the amount of electricity you use for heating by as much as 30%-40%. High efficiency heat pumps also dehumidify better than standard central air conditioners, resulting in less energy usage and more cooling comfort for summer months. However, the efficiency of most heat pumps as a heat source drops dramatically at tempers below 30 degrees generally making them unsuitable for long periods of cold climates. There are electric handlers and gas (dual fuel) systems that can overcome that problem.

For homes without ducts, heat pumps are also available in a ductless version called  mini-split heat pumps. In addition, higher efficiencies are achieved with geothermal (ground-source or water-source) head pumps, which transfer heat between your house and the ground or a nearby water source. Although they cost vastly more to install, geothermal heat pumps have very low operating costs because they take advantage of relatively constant ground or water temperatures. However, the installation depends on the size of your lot, the subsoil and landscape.