Should you switch to a heat pump? A climate-by-climate guide for U.S. homeowners

• Heat pumps are growing in popularity, capable of both heating and cooling a home by moving heat rather than generating it.
• While ideal for mild climates, modern heat pumps with dual-fuel capabilities are also a viable option for colder regions.
• High upfront costs, potential electrical upgrades, and local utility prices are key factors to consider before switching.

Heat pumps are rising in popularity because of their increased efficiency and dual purpose. In 2025, heat pumps accounted for 47% of cooling equipment sales, and from October 2025 to March 2026, heat pumps even outsold traditional air conditioning units for the first time, according to the Rocky Mountain Institute (RMI).

Thinking of jumping on the bandwagon, but aren't sure if your home is the right candidate for a heat pump? The USA TODAY team asked HVAC experts from ARS, a national HVAC installer, to help you decide.

Here's a breakdown of which regions are best suited for heat pumps and why.

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

The name "heat pump" is misleading, as this machine has the power to both heat and cool your home. The name does, however, perfectly describe how a heat pump works. Unlike furnaces, heat pumps don't generate heat; they move it from one place to another.

• In the winter, heat pumps heat your home by taking heat from outside air and moving it indoors. This works even in cold climates.
• During the warm summer months, heat pumps work in reverse. The heat pump takes hot air from inside your home and moves it outside.

Key factors that determine heat pump performance

Heat pump performance is more than just the model and efficiency rating. These factors contribute to how well your heat pump runs:

• Climate: Heat pumps can work in any climate, but perform much better in mild climates. As temperatures drop, so does heat pump efficiency (although heat pumps still operate at higher efficiency than other types of HVAC systems).
• Insulation: Even the most modern, efficient heat pump systems can't keep your home cool if the walls are poorly insulated. Insulation is the primary defence against heat entering or leaving your home, so poor insulation means your heat pump has to work extra hard to maintain your home's internal temperature.
• Heat pump models: Newer heat pump models feature better technology that helps cool your home. “The technology in these systems is really amazing right now," says Joey Dooley, a general manager at ARS in Texas. "In the past, we were limited to one or two stages — basically low or high. Now you’ve got systems with much more precise capacity control," he says, including communicating systems, variable-speed systems, variable-speed compressors.
• Correct installation: A heat pump cannot work properly if it wasn't set up well in the first place. Even if you buy the best and most efficient heat pump, "you have to install it correctly," says Scott Urquhart, an ARS HVAC sales and customer experience expert. "And if you don’t, you’re going to have problems.”
• Thermostat settings: Modern thermostats do more than just set the temperature in your home; they allow you to set timers, adjust home temps on the go and can even recommend the right temperatures to achieve your preferred energy footprint. These settings can help your heat pump run better.
• Your personal preferences: If you like a 65-degree home when the outside thermometer reads 95, you can expect your heat pump to work harder and use more energy. You shouldn't be uncomfortable, but if you keep your home at 72 to 75 degrees when it's unbearably hot outside, your heat pump will probably perform better and last longer.

Heat pumps in cold climates

Homeowners in northern climates have traditionally avoided heat pumps, assuming they can't handle cold temperatures.

But Steve Wade, a senior director of operations and procurement at ARS, debunks that myth. Heat pump technology has advanced, making it a viable, if not more efficient, choice than traditional air conditioners and furnaces. Older heat pump models may not have been sufficient, but the use of dual fuel (both electricity and natural gas) now makes them suitable for any climate.

In cold climates, a highly efficient heat pump may still rely on supplemental heating (i.e., gas) during extreme temperatures.

"Dual fuel is great," Wade says. "They use electricity when [the temperatures are] warmer but switch to gas when they need more energy," Wade says. This dual-fuel functionality is what makes heat pumps possible in cold regions like Chicago and Milwaukee.

Many homeowners assume that simply installing a high-end or “premium” heat pump guarantees lower bills. In reality, performance in cold climates depends far more on proper system sizing, installation quality and how the equipment is used. Even the most expensive system can underperform if it’s not matched to the home’s insulation levels or if it’s oversized.

Heat pumps in warm climates

For homeowners living in warmer climates like Florida, Texas and Arizona, a heat pump is an obvious choice.

"They become more like a traditional A/C system," says Wade. Heat pumps keep indoor temperatures cool but also supply heat during the few months of the year when it's needed.

In warmer climates, heat pumps operate more efficiently, but many of the same myths persist.

Homeowners often believe that paying more upfront guarantees better energy savings. Wade points out that higher-priced systems don’t always deliver meaningful improvements over mid-range models if the efficiency gains are marginal. The real differentiator is how well the system is matched to the home’s cooling load and how consistently it’s maintained.

Incentives and rebates by state

The federal Energy Efficient Home Improvement Credit that allowed you to claim a tax credit of up to $3,200 expired on December 31, 2025. This means fewer financial incentives exist for heat pumps.

In 2026, some states still offer tax incentives for installing energy-efficient systems, like heat pumps. They include:

• New York: Up to $8,000 for a heat pump through EmPower+
• Maryland: Up to $15,000 for projects through EmPower Maryland and the top energy providers in the state
• Rhode Island: up to $11,500 for qualified homeowners through Clean Heat RI
• Colorado: Funding for certain counties in Colorado via the HEAR program
• Wisconsin: The HOMES project can save you up to $5,000 on energy efficiency projects

This is by no means a complete list, so check with your state and local utility companies for rebates, credits and other opportunities for savings.

When NOT to switch to a heat pump

Heat pumps can be used in any region, but the cost can sometimes outweigh the benefits. If you're retrofitting a new heat pump, you can expect a hefty bill at the end of the project. So if cost is your main reason not to get a heat pump, your reasoning may be spot on:

• Higher upfront cost: If you don't need new ductwork or other upgrades, you can still be looking at an average of $13,000 for a new heat pump. New air conditioners run between $3,000 and $15,000, but most are more affordable than a heat pump.
• Electrical upgrades: If you have an older home, ductwork and the heat pump are only part of the total installation. Outdated electrical systems may need to be updated from a 100-amp electrical panel to a 200-amp panel, adding more cost to your project.
• Ductwork: Not every type of heat pump needs ductwork installed (think ductless mini-split), but if you want whole-home heating and cooling, you do need it. This can easily cost thousands of dollars and may make installation costs too expensive.

Other reasons not to install a heat pump depend on your home and where you live.

• If you live in an area with low gas prices, switching to a heat pump might not save you any money. If you have high electricity costs, you might even end up spending more on energy.
• Regions that experience extreme cold still may need gas-powered systems to combat the temperatures. A heat pump is still more efficient, but might not be the right fit for your home.
• Uninsulated homes lose heat more easily, which means your heat pump will have to work harder to maintain your home's internal temperature. Upgrading your home's insulation can solve this issue, but it can be pricey.

If you don't plan to be in your home long-term, you may also want to reconsider buying a heat pump.

The bottom line is that they are expensive, and you may not be there long enough to recoup the cost. However, a new heat pump might attract buyers, even if it doesn't directly impact your home's value.

“If one home has a newer, high-efficiency A/C system and another home has a system that looks like it’s on its last legs, the house with the better system is more attractive," says Dooley. "I don’t know that it raises the price of the home dollar for dollar, but it definitely increases desirability."

Why heat pumps are so expensive

Heat pumps may save more on energy costs, but they do require a higher upfront cost.

"They have additional components that don't exist in traditional A/C," Wade says. The product is manufactured differently, with copper components that are more expensive and drive up the cost.

Installation costs can also raise the total price. Heat pumps often require careful sizing, potential electrical upgrades, and, in some cases, ductwork modifications or supplemental systems for extreme temperatures. If you don't already have them installed, you may also need a compatible indoor unit and thermostat.

Heat pump decision checklist

Not sure if a heat pump is right for you? Use this heat pump decision checklist to help you decide: