Furnaces and boilers aren’t the only options for heating a home today. In fact, they are not even the best options for most American households— they’ve been eclipsed by a device known as an air-source heat pump.

Switching from a trusted heating technology to something less familiar can be daunting, but if you’re having a new home built—or if your home’s existing furnace or boiler needs replacement— it’s worth exploring the options. This decision can have major financial repercussions—heating makes up 42% of the average household’s energy bills, with annual heating expenses topping $1,000 across much of the US.

Bottom Line Personal asked homeimprovement expert Danny Lipford what you need to know about the heating tech competing to replace the familiar furnace…


Heat pumps are not a new technology, but recent efficiency improvements made them the clear choice for the majority of homes. Heat pumps warm homes not by burning fuel but by taking heat from the air or the ground outside the home and transferring it inside… and in the summer, they can cool the home by transferring heat in the other direction. These devices can replace a home’s furnace and air conditioning.

Heat-pump purchase and installation costs tend to be roughly comparable to those for high-efficiency gas furnaces and well below the combined price of a furnace and an air conditioner—though certain types of heat pumps can be very expensive. Some states and utilities offer rebates or tax incentives that further tip the balance in a heat pump’s favor—enter “heat pump,” “incentives” and your state into a search engine to locate these incentives.

Heat pumps are likely to produce lower annual heating bills, too—the average homeowner saves 10% to 20% compared with the cost of heating with a modern natural gas furnace…and potentially more if replacing oil heat or an old, inefficient gas furnace. These savings can be less impressive for households in the northernmost US—heat pumps are less efficient when outdoor temperatures drop below 15°F or so, because it’s difficult for them to extract heat from such frigid air. Steep local electricity rates could curtail savings, too—heat pumps almost always are powered by electricity (although some gas models are available), though they use far less electricity than traditional electric heaters. Three types of heat pumps…

Air-source heat pumps transfer heat to and from the outdoor air, as their name implies. They can be used with the ductwork originally installed for a furnace, which helps contain installation costs. Expect to pay $4,000 to $10,000 installed, depending on the size and efficiency of the system selected.

Drawbacks: Installation costs could be prohibitively steep if a home lacks ductwork, perhaps because it previously was heated by radiators. And as noted above, air-source heat pumps are less efficient in very cold parts of the country, though some of the latest models fare much better in extreme cold than earlier generations.

Mini-split heat pumps are much like the air-source heat pumps described above, except they don’t require ductwork— one component of the “split” system is installed on the wall or in the ceiling of each room to be heated/ cooled…a second component sits outside. Because each room has its own wall/ceiling unit, mini-splits provide “zoned” climate control—homeowners can set different temperatures in different rooms, potentially reducing their utility bills without reducing comfort. Mini-splits also are a cost-effective way to heat and cool an addition put on a home or a garage or attic that has been converted into living space, because they can be added without upgrading the heating, ventilation and air-conditioning (HVAC) system that serves the rest of the building. Prices range from $2,000 to more than $10,000 depending on the number of units required, the efficiency of those units and other factors.

Drawbacks: The wall-mounted units are unattractive. Ceiling units are less obtrusive but don’t fit easily into every ceiling. As with air-source heat pumps, efficiency can suffer in very cold temperatures.

Geothermal heat pumps exchange heat with the ground outside the home, not the air. The temperature five to 10 feet underground generally stays between 50°F and 60°F year-round, which helps these systems remain extremely efficient even on the coldest days in the northernmost US. Geothermal heat pumps have few moving parts, so they tend to require few repairs and last an impressively long time—potentially 25 years, roughly twice as long as the typical furnace, air conditioner or air-source heat pumps. But the excavation required to install the underground components can push up-front costs to $10,000 to $25,000.

Drawbacks: You probably won’t recoup the steep installation costs of a geothermal heat pump unless you remain in the home for decades. These systems are so efficient and long-lasting that they truly can pay back their high up-front costs over time, especially in very cold climates—but home buyers typically are unwilling to pay extra for homes that have geothermal heat pumps, so you’ll lose out if you move.

Heat pump brands to consider: American Standard and Trane make the best heat pumps across all types, sizes and efficiency levels, though they tend to be pricey. Carrier is a good choice if you’d prefer to pay a little less for a heat pump that’s almost as good as the top brands. Lennox and Bryant are respectable brands if controlling up-front costs is a higher priority than the unit’s longevity— for example, if you expect to sell the property within the decade. Janitrol and Goodman heat pumps often are used because they tend to be the least expensive, although they are not built as well as others and may not last as long.


Heat pumps aren’t the only furnace alternative. Additional options homeowners might consider…

Hydronic radiant floor heating is a wonderfully pleasant way to heat a home. Hot water and/or antifreeze circulates in tubes hidden beneath the floors, making it comfortable to walk around barefoot even in winter. The water or antifreeze typically is heated by a boiler, though solar water heating is an option, too. (Note: These are closedloop systems, so homeowners are never exposed to the antifreeze.) Hydronic radiant floor heating is quiet and helpful for people who have allergies—there are no vents circulating dust through the home. They’re energy-efficient, too, cutting heating bills by perhaps 15% to 30% compared with the typical furnace. Installation can cost $5 to $15 per square foot in new construction… but potentially $20 or more per square foot when retrofitted into an existing home. Uponor is the most trusted name in radiant floor heating.

There also are radiant floor heating systems that produce heat via electrical resistance, but these tend to be significantly less energy-efficient than hydronic floor heating systems.

Drawbacks: As noted above, retrofitting radiant floor heating systems into existing homes can be prohibitively expensive. Also, hydronic radiant flooring systems change temperature slowly— you won’t get instant gratification if you crank up the heat.

Active solar heating systems are the most environmentally friendly way to heat a home today. Sunlight collected by solar panels heats water and/or antifreeze that is routed through radiators, special baseboards or radiant flooring. Alternatively, the heated liquid could be routed through a liquid-to-air heat exchanger, producing hot air that is distributed through ducts. Sunlight is free, so your heating bills could fall dramatically. Upfront costs can run anywhere from a few thousand dollars up to $10,000 or more depending on factors such as the size of the system.

Drawbacks: Solar heating systems usually cannot provide all of a home’s heating needs, so homeowners must have a secondary heating system as well, undercutting the potential savings. But solar heating systems could potentially make sense from a dollarsand- cents perspective if subsidies and/ or tax credits are available. Enter “active solar heating,” “incentives” and your state into a search engine to see if your state or utility offers these.

Pellet and wood stoves provide heat the old-fashioned way—burning logs or wood pellets. Up-front prices tend to run from $2,000 to $4,000 installed. Heating with wood or wood pellets usually doesn’t generate significant savings compared to the cost of heating with a modern, efficient gas furnace. Wood stoves can make financial sense for homeowners who have access to lots of hardwood trees on their properties, however.

Drawback: The romantic appeal of a wood stove usually fades fast when homeowners actually live with one. Keeping a fire going takes time and attention, even with systems that feed pellets into the stove automatically. And the sense of self-reliance initially produced by splitting logs can quickly take a back seat to back pain.

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