From Heating Oil to Heat Pump: One Homeowner’s Savings Story

Heating and cooling your home constitutes the biggest chunk of energy costs in your home. However, there are not enough people who consider heat pumps as a solution.

Energy Information Management Data shows that 31% of energy consumption comes from air conditioners and space heating. CNET’s latest energy cost survey found that 78% of Americans emphasized utility bills.

These energy-efficient HVAC systems have gained popularity over gas reactors, which have surpassed gas reactors for the past three years, but the same CNET survey shows that only 14% of respondents upgrade to heat pumps to reduce energy costs.

At CNET, we are a big fan of heat pumps, due to our efficiency and our ability to heat and cool our homes by moving heat rather than generating them. Heat pumps are often advertised as a money-saving home upgrade, but the actual savings will vary depending on where you live, your electricity bill, and the HVAC system you are replacing.

So, how much can you really save with a heat pump? We asked home appliance experts and homeowners in Pennsylvania Wael Kanjihe is also a senior researcher at Rewiring America, a nonprofit organization that advocates for home electrification efforts.

Heat Pump Case Study: Pennsylvania

Heat pumps are an energy-efficient way to keep your home comfortable all year round. The heat pump runs on electricity and cools the heat from inside the house to the outside. It then reverses the heating process by pumping the heat inside.

We spoke to a Pennsylvania homeowner. He has tracked the heating and cooling costs for the past nine years. The house was built in the late 1950s and used air conditioners and heating oil before installing the heat pump in January 2022.

Before installing the heat pump, homeowners’ electricity costs included air conditioners, lights and appliances. In 2019, homeowners completed an energy audit to assess the efficiency of their homes, and in 2020 they improved weather resistance.

We reviewed the energy cost data and evaluated the overall energy savings from the switch to heat pumps compared to the use of electricity and heating oil.

Before installing the heat pump, the average homeowner’s electricity bill was $138 per month. After the heat pump, their average bill increased to $153. Although the total electricity costs for homeowners have increased, installing heat pumps has saved them on total heating and cooling costs. This is the way.

Total energy cost

The following table shows the total heating and electricity costs from 2016 to 2024. Overall costs have been significantly reduced after installation of the heat pump in 2022.

Will heat pumps save you money?

The simple answer is yes, heat pumps will save you money. But how much you store it depends on the system you are replacing, the amount of energy you are using, and where you live.

Heat pumps use electricity for both heating and cooling, which can cause your electricity bills to rise. However, heat pumps don’t pay for fuel, which saves you money overall. Natural gas is cheaper than fuel supplied, such as propane and heated oil. So if you’re replacing the delivered fuel, you’ll save more than someone replacing your natural gas heating system.

You can decide using your home’s potential energy savings Energy Star Calculator Or rewire the US Personal electrification planner.

Energy saving depends on where you live

As mentioned before, location plays a major role in savings on potential heat pumps due to the climate, home size, insulation and energy costs.

In colder climates where heat is used more frequently, those using the fuel supplied can save more money with heat pumps than those using natural gas. However, some people are concerned that extreme cold temperatures will affect the efficiency of heat pumps.

“A lot of people probably hear that heat pumps don’t work in really cold places. That’s not true,” Kanji said. “Many modern heat pumps work at negative temperatures in Fahrenheit.”

For example, the Mitsubishi H2I continues to decline to 13 degrees Fahrenheit. Below these temperatures, the heat pump may lose efficiency and require more energy.

The electricity costs in your area can also affect how much you save with a heat pump. Homes with door doors and windows that are less insulated may use more electricity to maintain indoor temperatures. Kanj recommends home energy auditing to make your home as efficient as possible.

Expensive electricity bills may be a problem for people in expensive states, such as Hawaii, Connecticut, and Texas. However, heat pumps may not be as efficient as traditional systems. For example, electricity bills for homeowners in Pennsylvania increased by just $15 after switching to heat pumps, but overall saved money by eliminating heating oil costs.

It depends on heating fuel

The type of fuel used for heating affects how much money you can save with a heat pump.

“If people are using fuel delivered at home, I think there’s a good chance that switching to a heat pump will save you money,” Kanj said. “People in the Southeast and those in areas with a more milder climate are also more likely to save money.”

Pennsylvania case study homeowners saved $800 in their first year with heat pumps compared to the previous year when they used air conditioning and heating oil.

The estimated annual savings from switching from supplied fuel to heat pumps is $810 more than switching from natural gas. “There’s less natural gas savings, but if you live in a place where you use more air conditioning, a heat pump can help you save more,” Kanj said.

A heat pump cannot significantly reduce your bill if you already have inexpensive heating fuel like natural gas. But the price is It is expected to rise in 2025. Therefore, installing a heat pump gives you long-term energy efficiency, savings and potential environmental benefits when equipped with renewable sources such as solar energy.

Compare heat pump savings

Here’s how much you can save with a heat pump based on your current fuel type: Rewire America.

How much does it cost to run the furnace and air conditioner?

Heating and cooling costs differ, and heating fuel also plays a major role.

Natural gas, electricity, propane and heating fuels are the most popular heating fuels, but their usage varies from region to region. Natural gas is the most common heating fuel used in 47% of US households. It is a major source of information in the Northeast, Midwest and West. Electricity is more common in the southern parts of the mild winter.

In general, heating and cooling costs are more expensive in areas with extreme temperatures. Massachusetts, for example, uses more heat in winter than warmer climates like Florida. This means that homeowners in colder climates spend more on heating, while people in hotter regions pay more for air conditioning.

The type of heating fuel also affects your cost. Natural gas tends to be cheaper than electricity and fuel supplied, such as propane and oil.

Here are some ideas on how location and heating sources affect costs based on costs: EIA data.

Various types of heat pumps

Air source heat pumps are the most common type, but there are other options to choose from based on your home and budget.

• Air Source Heat Pump: Use your home air duct to move heat between your home and outdoors. These are good options to replace gas furnaces with heat pumps for heating and cooling.

• Mini Split Heat Pump: A ductless system that provides targeted heating and cooling for individual rooms and home zones. Suitable options for homes that are not looking for ducts or flexible temperature control.

• Geothermal Heat Pump: Uses the temperature of the ground to transfer heat. Geothermal heat pumps are more costly than outdoor source heat pumps, but can provide more efficiency. These systems are solid options if you can prioritize lasting perks and invest in a higher upfront price.

• Absorbent Heat Pump: This system is similar to an air source heat pump, but uses energy from natural gas or steam instead of electricity. These are not very common, but Good options for bigger homes Or a commercial building.