different types of heat pumps illustration

Heat pumps are the latest trend among HVAC systems, and with the many types of heat pumps on today’s market, there’s one suitable for every home. In 2021, heat pump sales increased by 13% globally and 15% in the United States. As a result of the Biden administration’s 2022 Inflation Reduction Act, heat pump installation is expected to rise continually.

Heat pump systems are alternatives to conventional heating and cooling systems, such as furnaces and air conditioners. The United States promotes heat pumps for their energy efficiency and eco-friendliness, and many households transition to heat pumps because of the energy cost-savings they derive. If you’re considering heat pump installation, researching the various styles is the first step.

What is a heat pump, and how does it work?

A heat pump is an energy-efficient heating and cooling system. Studies show 32% of U.S. households would reduce energy costs with heat pump installation. How does a heat pump work? Heat pumps use refrigerants, coils, and other components to transfer heat between buildings and other sources.  

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Types of Heat Pumps and How They Work

The various heat pump styles utilize particular mechanisms to exchange heat with different sources, such as the air, the ground, and water. Heat pumps in cooling mode transfer the buildings’ heat to the outdoor sources. In heating mode, heat pumps absorb heat from outside sources and move it into buildings. Most heat pumps are electric, but one type runs on alternative energy sources, and another is paired with a gas furnace.

Heat pumps are efficient and environmentally friendly heating and cooling systems, producing less carbon emissions than conventional fossil-fueled heating systems. Studies suggest that harmful emissions would be significantly reduced if 70% of U.S. households adopted heat pumps.

air source heat pump system illustration

Air Source Heat Pumps

Air-source heat pumps exchange heat between indoor and outdoor air. Refrigerants absorb the indoor air’s heat and transfer it outside in cooling mode. In heating mode, refrigerants absorb the outdoor air’s heat and move it inside.

Three types of air-source heat pump systems:

  • Split-system heat pumps

  • Ductless mini-splits

  • Package heat pumps

Split System Heat Pumps

Split-system heat pumps, consisting of indoor and outdoor units, are the most prevalent. Refrigerant circulates between the two units in refrigerant lines, absorbing and discharging heat. These systems are also called ducted heat pumps because they distribute the treated air through ductwork.

Ductless Mini Splits

Ductless mini-splits also have indoor and outdoor components, but these systems don’t require ductwork. One or more indoor wall-mounted units condition and distribute the air directly. Refrigerants in the wall units absorb the indoor air’s heat, transfer it outside, and internal fans blow the cooled air into the rooms. The operation reverses in heating mode.

Package Heat Pumps

Package heat pumps distribute air through ductwork, but unlike split-system heat pumps, one large cabinet installed outside the house houses all the heat pump’s components. Home systems often sit near ground level, while businesses typically install units on rooftops. Package heat pumps are good alternatives for limited indoor spaces that prevent furnace coil or air handler installation.

Absorption Heat Pumps

Absorption heat pumps use alternative energy sources, such as natural gas, propane, solar-heated, or geothermal-heated water. Natural gas is typical, so these systems are often called gas-fired or gas-absorption heat pumps. Absorption heat pumps use thermal compressors and an ammonia-water absorption cycle to transfer heat as opposed to the vapor-compression cycle used by other air-source pumps.  

Absorption heat pumps are more costly to install and operate than electric heat pumps. Still, they are ideal for houses without electricity service and areas with high electric rates or frequent brownouts.

Ground Source Heat Pumps

Geothermal heating and cooling systems, such as ground-source heat pumps, exchange heat between buildings and the ground. Consistent underground temperatures make heat extraction possible year-round. Refrigerant lines connect indoor heat pump units to underground pipe networks that absorb ground heat.

Installation of these systems is costly, but they are highly efficient and have the longest lifespans among heat pump systems.

Water Source Heat Pumps

Water-source heat pumps exchange heat between buildings and small bodies of water, such as wells and backyard ponds. Pipes are sunk to the water’s bottom, where underwater temperatures remain consistent despite surface-level fluctuations. These systems circulate the source water through lines to transfer heat between the buildings and the water supplies.

Water-source heat pumps are more affordable than ground-source heat pumps but require adequate water supplies year-round.

Air to Water Source Heat Pumps

Air-to-water heat pump systems integrate air-source heat pumps with hydronic heating. The heat pump unit extracts heat from the outdoor air and circulates the refrigerant to an indoor water tank. The water absorbs the refrigerant’s heat and spreads through the home’s radiant heating system, which consists of hot water radiators or underfloor heating lines. Air-to-water heat pumps can also supply the home’s hot tap water.

Unfortunately, these systems only provide heat; a separate system is required for cooling needs. Additionally, air-to-water heat pumps are nonexistent in the United States despite their prevalence in Europe.

Hybrid Heat Pumps

Hybrid or dual-fuel heat pumps combine air-source heat pumps and gas furnaces. The heat pump provides cooling and most heating; the furnace takes over heating the house during cold outdoor temperatures that reduce the heat pump’s efficiency. These systems suit cold climates where air-source heat pumps struggle to supply heat.  

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Which Type of Heat Pump is Best For Your Home?

Heat pumps are energy-efficient, eco-friendly, and cost-effective heating and cooling systems. Knowing which type of heat pump is best for your home is imperative to derive all the advantages heat pumps offer.

Electric heat pumps are the most energy-efficient and preferable for most homes. Gas absorption heat pump installation is only sensible in homes that don’t have access to affordable and reliable electricity service.

Air-source electric heat pumps are most prevalent because they are affordable and come in many styles. Split systems easily install in homes with existing ductwork, mini-splits offer solutions to homes without ductwork, and package systems allow heat pump installation in homes with ductwork but lacking space for indoor units. Air-to-water heat pumps incorporate hydronic heating systems, while hybrid systems integrate gas furnaces for supplemental heat.

Ground-source and water-source electric heat pumps are highly efficient but uncommon for different reasons. Ground-source systems have incredibly high installation costs, and energy cost-savings are recouped over time. Water-source systems require adequate year-round water supplies.

Cold Climates

Generally, air-source heat pumps in cold climates struggle to deliver sufficient heat, but other heat pump styles efficiently heat houses during the coldest winters. Hybrid heat pumps defer to their gas furnaces when temperatures and efficiency decline, and ground-source heat pumps are unaffected by outside temperatures.

Warm Climates

Homes in warm climates have the most heat pump options. Air-source, ground-source, and water-source heat pumps effectively cool and heat houses. However, air-to-water heat pumps don’t have cooling capabilities, and hybrid systems with gas furnaces are superfluous for warm regions.

Larger Homes

Larger homes can use virtually any heat pump system compatible with the climate, but installation costs for ductless mini-split systems in large homes are exceptionally high. Separate wall units must be installed in each room, and the system might require the installation of a second outdoor unit to serve the whole house.


All heat pumps provide energy-efficient heating and cooling when suitably matched with homes. Ground-source heat pumps are the most efficient option, but the high upfront costs make them long-term investments. Water-source heat pumps are highly efficient but require adequate water supplies. Though slightly less efficient, air-source heat pumps can output three times more thermal energy than the electrical energy it takes to power them.

Frequently Asked Questions

Which heat pump type is the most common?

Air-source heat pumps are the most common type. Over 60% of the 2021 global heat pump sales were air-source heat pumps.  

How do I know what type of heat pump I have?

Switch the heat at the thermostat and head outside to the outdoor unit. If it runs when the heat is on, it’s an air-source heat pump. For more information, find the metal plate on the outdoor unit. Search the brand name and model number online.

What is the most cost effective heat pump?

Ductless mini-splits are the most cost-effective option with low equipment, installation, and labor costs. Furthermore, there is no energy loss due to duct inefficiencies. On the other hand, ducted systems are typically more cost-effective in homes with existing ductwork.

Heat pumps

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