Concentration of CO2 in the Atmosphere

Heat Pumps: How They Work and Why They Are So Efficient

By Jake Marin, Efficiency Vermont HVAC Program Manager

When most people think of electric heat; efficient and inexpensive are not the first words that come to mind. However, with current heat pump technology, this is exactly what you get. In Vermont, air- source heat pumps (also known as mini-splits or ductless heat pumps) have garnered a lot of interest as Vermonters continue to struggle with controlling the cost of heating their homes.

Unlike most heating systems, mini-splits do not burn anything or use electric resistance to generate heat. As the name suggests, a heat pump transfers or “pumps” heat from one place to another. How does it work? I often explain heat pumps as an air conditioner working in reverse. Air conditioners do not make cold air. Instead, they extract heat from inside a building and “pump” it outside, leaving the air cooler. A heat pump is doing the same thing; just in the opposite direction.

The illustration below shows how heat is taken from the air outside, compressed, and brought into the house at a high temperature. There is a significant amount of heat to be extracted from cold outdoor air, even during a Vermont winter. Because they move heat rather than generate heat, cold climate heat pump systems consume much less energy than traditional electric, propane, or oil heating systems. By efficiently capturing the heat energy in the cold outside air, heat pump technology has become a realistic heating option for cold regions, like Vermont.

Image courtesy of Efficiency Vermont

Image courtesy of Efficiency Vermont

Heat Pumps: Not Just For Home Heating

Heat pump technology is found in a variety of new innovative products. For instance, until recently, electric water heaters and clothes dryers have been big energy users in a home, but heat pump technology makes these appliances much more efficient.

At Efficiency Vermont we’ve excitedly watched this technology develop. The potential energy cost savings that heat pump products can provide to Vermonters is huge, and we’ve jumped at the opportunity to make these savings attainable. We’re currently offering rebates or discounts on ENERGY STAR® 2014 Emerging Technology Award-winning heat pump clothes dryers, heat pump water heaters, cold climate heat pumps, and anticipating additional offerings as more products become available in Vermont.

Choosing Heat Pumps for Your Home: What to Expect

If you heat with electricity, the U.S. Department of Energy estimates that a heat pump can trim the amount of electricity used for heating by as much as 50%. If the heat pump is displacing (offsetting) the use of a fuel oil or propane heating system, actual energy savings will depend on the costs of the combustion fuel relative to the cost of electricity. Like any heating system, heat pumps work most effectively in buildings with high levels of thermal efficiency. Basic improvements in your home, such as proper air-sealing and insulation are therefore recommended before installing any heat pump technology.

If you are choosing a new clothes dryer with heat pump technology, these units are about 20% to 60% more efficient than their standard issue counterparts. Heat pump water heaters cost about 50% to 65% less to operate than traditional electric resistance water heaters. These water heaters are estimated to save as much as $3,250 over the lifetime of the equipment.

For more information about heat pump technologies and available incentives visit

Current Rebate Offers on Home and Water Heating Systems from Efficiency Vermont:

Efficiency Vermont partners with participating Heating, Ventilation and Air Conditioning (HVAC) distributors and installers to bring affordable high-performance HVAC equipment to homeowners. There are specific requirements associated with each of these incentives, visit or call 1-888-921-5990 to learn more.

System Type

Discount/Rebate Amount

Heat Pump heating & cooling system

$300 to $400 OR GMP Customers can lease a system with up to 7 months free from Efficiency Vermont

Boiler or Furnace


Central Wood Pellet Boilers

$2,000 plus an additional $2,500 from the Clean Energy Development Fund:

Heat Pump Water Heater

$400 point of purchase discount at a Participating Distributor, OR $400 Rebate for a retail purchase

Solar Water Heater

$950 Post-Installation rebate

Home Air Sealing and Insulation

Up to $2,100 in incentives per household

In addition to these cash incentives, Vermonters can take advantage of a number of different financing options for their energy efficiency projects and system upgrades. Visit to learn more.

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