Eco-Explainer: What are heat pumps?

Could a Heat Pump Lower Your Heating Bills This Winter? Find out more.

The winter of 2026 has been one of the coldest on record. With frigid temperatures driving heating bills higher, understanding which heating options are both energy-efficient and affordable can be a win for the environment and your wallet. Americans, on average, have seen an estimated 35% increase in heating and cooling costs from March 2022 through June 2025, with winter heating bills reaching as high as $1,000 per month.

But there are better home heating and cooling system options.

What are heat pumps? How do they work?

Heat pumps are electric HVAC systems that move heat – rather than generate it – to keep homes comfortable year-round.

There are two types of heat pump ductwork systems: air-to-air and ground source/geothermal. Here’s the difference:

• Air-to-Air: The most common type of heat pump is an air-source heat pump, which moves heat between your home and the outdoors. During the summer, it pulls warm air from inside your house and transfers that heat outside using a refrigerant-filled system. Once the heat is released outdoors, cooler air is sent back inside, keeping your home comfortable without generating heat the way traditional systems do.
• Ground Source/Geothermal: Geothermal heating pumps, also known as GHPs, transfer heat between your home and the ground. This method can be more expensive than the air-source method, but it has been shown to use 60% less energy.

Why are heat pumps a healthier and more affordable option?

When it comes to more sustainable HVAC systems, heat pumps offer an alternative to traditional heating systems that rely on fossil fuels. More than 13% of climate pollution in the US is attributed to burning common fossil fuels, such as methane and propane, released by buildings and homes that use traditional heating and cooling systems.

Many people may not associate their healthcare costs with the air quality within their home. Rewiring America’s 2024 report found that upgrading to more energy-efficient HVAC systems, such as heat pumps, reduced Americans’ overall medical costs associated with health risks by $40 billion. In addition to reducing healthcare costs, Americans can save $60 billion annually on utility bills through building electrification upgrades.

PECO offers up to $300 rebates for heat pumps in the Philadelphia region, and PSE&G offers rebates for high-efficiency models for South Jersey customers.

Can heat pumps work in older homes?

As the nation’s original capital, Philadelphia is well known for its historic architecture. Outfitting a 100-year-old stone home with a brand-new HVAC system may seem daunting. Homes traditionally designed to use a gas furnace or boiler can also use heat pumps. Even poorly insulated homes have shown that heat pumps can be a better alternative. Heat pumps outperformed traditional gas boilers in buildings older than 100 years, according to a study by the Fraunhofer Society in the UK .

In many Philadelphia homes, installing heat pumps is a problem. Many homes in the area have boilers or radiators that use baseboard heating. According to The Philadelphia Inquirer, these housing units would need to incorporate ductless heat pumps called “head units,” mounted on the ceiling or interior walls. This method allows for the refrigerant in the heat pump to travel directly through these head units to be dispersed throughout the room.

With electrified heat pumps, efficiency is important to prevent overloading the system and inefficient heating. Very High Efficiency HVACs are performance-based technical specifications that help to optimize the entire system. 85% of the energy used to heat and cool inside air is recovered, making the entire heating system more efficient.

Want to learn more?

Listen in: Check out the BBC’s “Sliced Bread” podcast hosted by Greg Foot, who interviews experts and surveys his own home to find out whether air-source heat pumps are “the best thing since sliced bread.”

Worth the read: “Ask MIT Climate,” breaks down how heating and cooling buildings contribute to climate change, and how efficient technologies like heat pumps can help reduce that impact.