Heat pump vs. air conditioner: which should you buy?
Last edited
Author
Andrew Blok
Electrification and Solar Writer and Editor
Editor
Andrew Giermak
Solar and Electrification Writer and Editor
If your AC is on its last summer, you're about to spend a few thousand dollars on a machine that could do so much more. A heat pump is an air conditioner that can run in reverse to heat your home in winter, too. For most homes, that makes it the better buy.
What's the difference between a heat pump and an air conditioner?
Think of a heat pump as an air conditioner with a reverse switch. In summer, both machines pull heat out of your house and move it outside. In winter, a heat pump flips direction and pulls heat from the outdoor air into your house, even when the air is very cold.
That means a heat pump can also replace your furnace, cutting down on the number of appliances you need to maintain.
Will a heat pump cost more to install?
Cold climate heat pumps, because they’re more complex machines, will cost more than an air conditioner. Heat pumps for warm climates should be close in price.
- Heat pump: $7,500 – $12,000
- Air conditioner: $5,500 – $9,000
- AC plus a new furnace: $10,000 – $15,000
The comparison that matters is the last one. If your furnace is also near the end of its life, one heat pump may cost less than replacing two machines. Swapping an AC for a heat pump can also require new wiring or a new thermostat, which adds to the price. With the Palmetto Comfort Plan, you can swap the upfront cost of any of this equipment for predictable monthly payments that cover maintenance and most repairs as well.
Will a heat pump lower my energy bills?
In summer, probably not. Heat pumps and ACs cool with similar efficiency, so cooling costs are about the same.
Winter is where you may save. A heat pump is the most efficient way to heat a home because it moves heat instead of making it. The Department of Energy says a new heat pump paired with insulation and other upgrades can save.
| Heat pump replaces… | Potential annual utility bill savings |
|---|---|
| Heating oil furnace | $923 – $2,822 |
| Propane furnace | $889 – $2,811 |
| Electric resistance | $287 – $1,059 |
| An older heat pump | $63 – $338 |
| Natural gas furnace | $28 – $556 |
Savings listed are 25th and 75th percentile. Actual savings will vary and aren’t guaranteed.
If you heat with natural gas, the answer depends on local prices. Where gas is cheap and electricity is expensive, a heat pump may cost about the same to run as a gas furnace.
Read more about heat pumps in cold weather: Cold climate heat pumps
When is a plain AC the better choice?
A plain AC can be the smarter buy in a few cases:
- You have a newer furnace with many years of life left.
- Gas is very cheap where you live and your budget is tight this year.
If that doesn’t sound like you, a heat pump is likely the better value over the life of the system.
Paying for a heat pump upgrade
The upfront cost of a heat pump isn’t too much higher than the cost of an air conditioner, but both are substantial to start.
Are there incentives for heat pumps?
The federal tax credits for heat pumps expired at the end of 2025. State and local incentives may still apply. Check your state energy office and your utility's efficiency programs.
Leasing a heat pump
If the upfront cost is the obstacle, consider leasing. With the Palmetto Comfort Plan, Palmetto installs and owns the heat pump at your home, covers maintenance and repairs for the lifetime of the agreement (10 years). You make predictable monthly payments and get heating and cooling tailored to your home.
Ready to see what a heat pump would look like for your home? Explore your HVAC options with Palmetto Comfort Plan.
See how much you can save with a new HVAC system from Palmetto
Frequently asked questions
Can a heat pump replace an air conditioner?
Heat pumps can replace air conditioners. Because they can also heat homes they can replace furnaces and other heaters, too. Heat pumps are the most efficient way to heat your home and may be the cheapest, too.
Are heat pumps or air conditioners better?
Because heat pumps can heat and cool, they’re more versatile than air conditioners. Heat pumps may not cool your home any better than an air conditioner, but an air conditioner can’t provide heat.
Can a heat pump replace a furnace?
Yes. Heat pumps can replace furnaces. A heat pump should be sized to your home and rated for your climate, but the technology is used all over the world, even in very cold temperatures.
Disclaimer: This content is for educational purposes only. Palmetto does not provide tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors.
