Heat Pumps / AC

Spend $1,000 now and
SAVE $200 each year...
ROI = 20%


Heating and Cooling accounts for about 35% - 45% of a home's energy cost. Consider a 'dual fuel' hybrid system with a gas furnace for very cold weather and a heat pump for mild weather. The technology has improved, and you now get very warm air with heat pumps vs. very hot air with furnaces.

You can save up to $200 a winter over a gas furnace alone. In mild winter climates, you don't need the back-up gas furnace and the savings is greater. Dual fuel works best if you are considering replacing your AC system or adding a zone for a home remodel, because the heat pump doubles as your AC by pushing warm air out and cold air in over the summer. Think of it as a reversible AC unit.

The ROI Calculation is based on a high-efficiency 2 ton heat pump with special thermostat that costs $1,000 more than a 2 ton AC-only system. The added heat pump cost is easily recouped, and you can choose between the heat pump and gas furnace given temperate and fluctuating costs of gas vs. electricity. Many electric companies offer discounts on the cost of kWh between October and March for homes that use heat pumps. You can also get the 30% Tax Credit on the materials and installation for an Air Source Heat Pump.


The American Recovery and Reinvestment Act (ARRA) provides you with a 30% Tax Credit for Air Source Heat Pumps that are put into service by the end of 2010. This tax credit item is only for existing homes, not new construction, that is your primary residence and it includes the cost of materials and installation. (3 KEY POINTS - #1: The tax credit cap is $1,500 on collective home improvement elements other than Geo-Thermal 'Ground Source' Heat Pumps, Solar Hot Water Heating, Solar Photovoltaic, and Fuel Cell systems - which each have no cap and are eligible through 2016. #2: The tax credits for exterior 'weatherization' improvements like windows, doors and insulation do not include the cost of installation! #3: If you reach the $1,500 cap in 2009, you are not eligible for additional tax credits in 2010.) Choose an Air Source Heat Pump that meets these criteria to get the tax credit and check products carefully, because in many cases an ENERGY STAR certification does not necessarily meet the tax credit requirements below:

Split Systems:
• Heating Seasonal Performance Factor (HSPF) must be at or above 8.5
• Energy Efficiency Ratio (EER) must be at or above 12.5
• Seasonal Energy Efficiency Ratio (SEER) must be at or above 15

Package Systems:
• Heating Seasonal Performance Factor (HSPF) must be at or above 8
• Energy Efficiency Ratio (EER) must be at or above 12
• Seasonal Energy Efficiency Ratio (SEER) must be at or above 14

Some Key Definitions

A. Air-Source Heat Pump (ASHP): An air-source unitary heat pump model consists of one or more factory-made assemblies which normally include an indoor conditioning coil(s), compressor(s), and outdoor coil(s), including means to provide a heating function. ASHPs shall provide the function of air heating with controlled temperature, and may include the functions of air-cooling, air-circulation, air-cleaning, dehumidifying or humidifying.

B. Central Air Conditioner: A central air conditioner model consists of one or more factory-made assemblies which normally include an evaporator or cooling coil(s), compressor(s), and condenser(s). Central air conditioners provide the function of air-cooling, and may include the functions of air-circulation, air-cleaning, dehumidifying or humidifying.

C. Single Package: A single package unit is an ASHP or central air conditioner that combines both condenser and air handling capabilities in a single casing.

D. Split System: A split system is an ASHP or central air conditioner with separate indoor (evaporator) and outdoor (condenser) units. For split systems, the energy-efficiency rating of a particular split system is based on the actual condenser-evaporator coil combination of the split system.

Good to Know

If the outside AC condenser/compressor unit is more than 8 to 10 years old (pre-2000) then it most likely only has an efficiency rating of a SEER 8 or 9 vs. the target 14 or Higher. The SEER rating is the BTU of cooling output during a typical cooling-season divided by the total electric energy input in watt-hours during the same period. The higher the SEER the better the efficiency. However, replacing an inefficient AC unit with a more efficient one is not as cost-effective as replacing the old one with a heat pump. Heat pumps are only marginally more expensive than a new AC unit and the labor is about the same. Bonus 1: Air Conditioning Economizer - Economizers like the IntelliCon®-AC typically reduces home Central Air Conditioning electric consumption by 10% to 20% or more. The IntelliCon-AC is a microcomputer-controlled, UL listed electronic device that automatically adjusts the compressor cycles to achieve the greatest efficiency and reduced electrical usage, while assuring consistent temperature levels for even the most temperature sensitive homes. IntelliCon-AC is maintenance free, easy to install by a qualified installer. The whole cost with installation is typically $300 - $400 and the product guarantees a 10% savings on your AC. Many property owners have seen 15% - 20% or more in savings. With average AC costs at $400 per year, you could save at least $40 a year if not double that amount in warmer climates.

DIY Tips:

Move items that block air circulation - Heating and cooling account for over 40% of household utility bills. Every small optimization adds up. Clean the elements that supply and return Heating and AC in each room - Clean the cold air return vent grills, the heat supply registers, any radiators, and the base boards.

Heat Pumps offer ‘High Efficiency’
and you can landscape around them
as long as your let enough air in form
the sides and top.


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See the Tax Credits: Click Here

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