The short version
- A heat pump moves heat instead of making it, so it can deliver two to four times more heat than the electricity it uses.
- Sizing, ductwork and installation quality matter as much as the rating on the box.
- Whether it saves money depends on your gas price, your electricity rate and whether you're adding air conditioning.
- Heat pumps like steady settings. Deep overnight setbacks can cost you more, not less.
How a heat pump works
A furnace burns gas to create heat. A heat pump works like your refrigerator in reverse: it pulls heat out of the outdoor air, even cold air, and moves it inside. In summer it runs the other way, moving heat out of your home, which is exactly what an air conditioner does.
Because it moves heat rather than creating it, a heat pump can deliver two to four units of heat for every unit of electricity it uses. That ratio is called the coefficient of performance, or COP. A gas furnace, by comparison, delivers a bit less heat than the fuel it burns.
The catch: as it gets colder outside, there's less heat to move, so both a heat pump's heating power and its efficiency drop. The North Bay's mild winters work in its favor.
What the ratings mean
SEER2: cooling efficiency
How much cooling you get per unit of electricity over a typical summer. Higher is better.
HSPF2: heating efficiency
How much heat you get per unit of electricity over a typical winter. Higher is better.
A higher rating saves money every year, but it's only worth paying extra for if the savings add up over the life of the system. The SEER2 & HSPF2 calculator turns ratings into dollars. If you live somewhere with frequent freezing nights, ask about cold-climate models, which keep much more of their heating power as temperatures drop.
What matters more than the rating
Right-sizing. A system that's too big turns on and off constantly, which hurts comfort and efficiency. Too small, and it struggles on the coldest nights. The right size comes from a room-by-room load calculation called a Manual J, not from your home's square footage or the size of your old furnace.
Your ducts. Leaky or uninsulated ducts in an attic or crawlspace can waste a significant share of the heat you pay for. Testing and sealing them is often one of the best-value parts of the project.
Installation quality. Correct refrigerant charge, airflow and thermostat setup make a real difference in both comfort and running cost.
Backup heat. Some systems include electric "heat strips" for very cold weather. They work, but they're expensive to run. In the North Bay, a well-sized heat pump rarely needs them, and choosing a system without them can also avoid an electrical panel upgrade.
Will it save you money?
It depends on three things:
- What you heat with today. Replacing electric resistance heat or propane almost always saves money. Replacing natural gas is closer, and depends on your rates.
- Your electricity rate. PG&E's Electric Home rate plan (E-ELEC) is designed for homes with heat pumps, EVs or batteries, and can change the math. Solar can too.
- Whether you're adding air conditioning. Many Marin and coastal homes don't have AC today. A heat pump adds cooling, which is a comfort upgrade, but it also adds electricity use in summer.
The Heat Pump HVAC calculator compares your current system with a heat pump, shows the break-even electricity rate, and estimates the solar needed to cover the added use.
Living with a heat pump
Heat pumps are designed to run longer and more steadily than a furnace, delivering gentler, more even heat. That changes how you should use your thermostat.
With a furnace, turning the heat way down overnight and blasting it in the morning saves money. With a heat pump, a deep setback can mean hours of recovery, or can trigger costly backup heat. Smaller setbacks of 2–3°F, or a smart thermostat that starts warming earlier, usually work better. The Home Heating Warm-Up calculator shows the difference.
Questions to ask your contractor
- Will you do a Manual J load calculation for my home?If not, ask how they chose the size.
- What size are you recommending, and why?Be cautious if the answer is simply "the same as your old system."
- Will you test and seal my ducts?Ask what leakage they find, and what it would cost to fix.
- Does this system include backup heat strips? Do I need them here?They affect running cost and your electrical panel.
- Would a cold-climate model make sense for my home?
- Does my electrical panel have room, or will I need an upgrade?Check first with the Panel Readiness Check.
- Which thermostat will you install, and how should I set it?
- What's the warranty, and who services the system?
Common mistakes to avoid
- Sizing by square footage alone. It's a rough guess, not a design.
- Keeping old, leaky ducts. A new system can't overcome heat lost on the way to your rooms.
- Using a heat pump like a furnace. Deep setbacks and big temperature swings cost comfort and money.
- Forgetting the electrical panel. Find out early whether it has room, so it doesn't surprise you mid-project.
- Comparing quotes on price alone. Two quotes for the "same" size can include very different ductwork, equipment and installation.
Run the numbers for your home
This guide is general education, not advice for your specific home. Equipment, rebates and PG&E rates change; confirm details with a qualified contractor. Unfamiliar term? See the glossary. Unfamiliar term? See the glossary. Unfamiliar term? See the glossary. Have a question it didn't answer? Ask Robert.