Most Americans use utility-supplied natural gas to heat their homes.
As a result, most Americans are stuck with their utility and the prices they set. And, since natural gas is made almost entirely of the potent greenhouse gas methane, gas furnaces (and stoves and water heaters) have a climate cost in carbon that can’t be avoided.
Still, while 47% of homes use gas, 40% use electricity, according to the US Census Bureau. That points to the fact that cleaner, more efficient options exist.
In this guide for electrifying your home heating system, we outline the steps you can take to create a sustainable and cost-effective electric heating solution for your property, before showcasing the synergistic benefits of solar energy.
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A Brief Introduction to Home Heating Systems
According to the Energy Information Administration (EIA), more than half of the energy consumed by US households is used for heating or air conditioning purposes.
While nearly half of US home heating is gas-powered, electrified systems have become more common in the last decade.
Back in 2015, electricity was the main energy source for home heating in only 36% of US households, representing an 11% share increase over the last seven years. This trend is most apparent in home construction, where over half of new residential US properties are built with electric heating appliances.
This graph shows the percentage of new housing built in 2023 by its heating fuel. Percentages may not equal 100 because small amounts of other fuels, like heating oil were omitted. Data from the US Census Bureau.
By completely electrifying your home (swapping all your gas appliances for electric ones), you can set yourself up for efficient energy consumption and savings when you adopt solar. Not all electric appliances are created equally. When it comes to the newest, most efficient, and most effective electric heating system, heat pumps stand above the rest.
Heat pumps
Heat pumps use electricity to heat and cool your home. Heat pumps available on the market today vary by where they get the heat they bring into your home, and how they move heated air around your house.
- Air source heat pumps: The most common and easiest to install, air source heat pumps absorb heat from the exterior air and transfer it inside your home at selected room temperatures.
- Geothermal heat pumps: Also commonly called ground-source heat pumps, geothermal systems transfer heat from below the earth’s surface into your home.
- Ducted: Like a traditional furnace or central air conditioning system, ducted electric heat pumps can be used to warm or cool your entire home by blowing warm or cool air through your home’s ducts and vents.
- Ductless: More like window air conditioning units, but installed permanently, ductless heat pumps (also known as split systems) offer a room-to-room solution for efficient space heating and cooling.
- Absorption heat pumps: Among the least commonly used today, absorption or gas-fired heat pumps are supplemented with a variety of energy sources, including natural gas or steam from geothermal or solar-heated water. They’re generally only used in large buildings and aren’t a fully electric option.
Heat pumps are experiencing massive increases in adoption rates around the world. In 2023, the MIT Technology Review reported that “heat pumps are significantly better than they were a decade ago, [and] there’s still plenty of potential growth ahead for the technology.” A year earlier, more heat pumps were sold in the US than gas furnaces for the first time in history.
Other electric home heating systems
Electrified furnaces, baseboard heaters, and wall units are all available heating solutions. While these systems can be effective, according to the Department of Energy, most electric heating methods are not economical due to their level of energy consumption and high grid electricity costs.
Homeowners pursuing electric heating should strongly consider some sort of heat pump system. Compared to electric furnaces and baseboard heaters, heat pumps can reduce household electricity use by up to 60% on average.
The Benefits of an Electric Home Heating System
Going electric can deliver three primary benefits.
Cost savings
A 2-in-1 solution for heating and cooling, efficient air-source heat pumps can lead to lower energy consumption and spending. According to the International Energy Agency, today’s commercially available heat pumps are about three to five times more efficient than traditional gas boilers. The US Department of Energy says replacing an old heater with an efficient heat pump appropriate to its region can save the average American household $300-$1500 per year in the US, depending on location and the heater it’s replacing.
Although every property is different, recent peer-reviewed research indicates that heat pumps can lower the energy costs in 90% of US homes, with opportunities in every state. As a result, adding an efficient heat pump can also increase your property value. In a 2020 study led by the Center for Global Sustainability, homes with heat pumps sold for a premium (between $10,400 and $17,000 more on average) in nearly half of US states.
Environmental impact
Installing a heat pump can eliminate direct natural gas use on your property and can dramatically reduce the amount of fossil fuels your home consumes. However, if your heat pump uses grid-supplied energy, you may still generate some greenhouse gas emissions if your utility uses coal, natural gas, or another fossil fuel.
Thankfully, grid-supplied power is getting greener in many places as cities, states, and utilities work toward net-zero goals. Still, the greenest possible way to electrify your home heating system is with photovoltaic (PV) solar panels. By pivoting from a gas furnace to an electric heat pump powered by solar energy, you can significantly reduce your environmental impact and save money.
Future-ready
As if saving money and reducing greenhouse gas emissions wasn’t future-proof enough, an electric home heating system can bring your living space into the world of today and tomorrow. In addition to being highly efficient, today’s best heat pumps are incredibly sophisticated and include smart automation, app-based control, and easy integration with other home systems like solar and battery storage.
3 Steps to Electrify Your Home’s Heating System
When you are ready to electrify your home heating, here are three steps to doing so.
Evaluate your current home heating system
Your home’s heating efficiency has many factors, like your insulation and property size, but the HVAC equipment itself is a good place to start.
Furnaces and boilers can last for multiple decades, but when things begin to fail, make alarming noises, or operate at lessening efficiencies (resulting in higher utility bills), it may be time to replace your equipment. As a rule of thumb, Energy Star recommends replacing any furnace or boiler that is more than 15 years old.
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Consider your personal circumstances
As with any major property upgrade, your personal situation will impact your decision-making. To find the most sustainable solution for your home and wallet, consider the following factors in your heating system selection.
- Climate: Air source heat pumps work most efficiently in warmer climates, though specific cold climate models are rapidly making cold-weather performance issues a thing of the past. On the other hand, geothermal systems are highly efficient in most climates, though installation costs and space might be a concern.
- Existing systems: If you have a central HVAC system already installed, then you may be ready for a high-efficiency ducted heat pump. Conversely, if your home does not have ducts already, you can opt for a ductless mini-split heat pump in any living space that requires heating or cooling.
- Budget: While efficient systems can help you save money in the long run, unfortunately, they are not installed free of charge. Thankfully there is a massive range of heat pump costs, with installations reported from $1,500 to as much as $20,000 and options for every property size. Tax credits may reduce the installation cost some.
Find the right installation partner
Once you have a rough idea of what you are looking for, then it's time to talk to the people who can install your equipment. Almost always, you should trust a professional to supply and install your heat pump.
Finding the right installer means finding the one who has your best interests in mind. While it may be tempting to work with the cheapest provider, it is also very important to consider any included performance and workmanship warranties to guarantee the long-term success of your investment in sustainable home heating.
After you have decided to move forward with your electric heat pump upgrade, your installer will schedule a time to remove your old HVAC equipment and install the new system. This process is typically completed in one day, though additional upgrades may be required to incorporate your electric heat pump (like a new electric panel) or completely phase out your old heating system.
The Economics of Electric Heat Pump Energy Savings
One of the best things about a heat pump is that it can save you energy and money for years. For that reason, it’s best to take a long view of savings and use any incentives available to you.
Initial costs vs. long-term savings
Like a lot of things in life, a little bit of an investment can go a long way for your home’s heating. So while heat pumps generally cost more to install than traditional gas-powered furnaces, efficient systems can reduce overall, long-term expenses. According to the Department of Energy, an average US homeowner switching from natural gas to a heat pump system may be able to save between $28 and $556 annually on energy bill costs.
Financial incentives for heat pumps
In the United States, there are several national and local financial incentives, rebates, and other programs available that reduce the total costs of a residential heat pump.
The Energy Efficient Home Improvement Credit (EEHIC), a federal income tax credit that allows US homeowners to earn up to $2,000 back on their taxes for qualified heat pump installations. Your city, state, or utility may operate its own programs to make efficient heating systems more affordable with rebates, no-interest financing, and other financial incentives.
Maintenance and ongoing operations
Much like your car or your teeth, your heat pump needs ongoing maintenance to work as well as possible. While we strongly recommend listening to your installer and learning the ins and outs of your particular equipment, there are also a few general best practices for heat pump maintenance.
A few general tips for success include:
- Changing or cleaning air filters monthly or as needed
- Performing ongoing inspections and investigating any unusual noises or operations
- Working with a professional technician to service your heat pump annually
Installing Solar Panels With Your Heat Pump
Although not every home in the US is suitable for solar panels, millions of Americans are saving money with emission-free electricity generated on their roof or property.
Why solar and heat pumps are a perfect match
Home electrification means you’ll use more electricity and generate higher electric bills, but solar energy can help lower those bills for decades. If you are looking for the quickest way to see your potential savings, use our solar benefits calculator to weigh your ongoing utility expenses against your property’s solar potential.
Because the number of solar panels you can add to your home is often tied to how much electricity you actually use, the order in which you electrify your heating and add solar may be important. A solar advisor at a reputable solar company can help you plan it all out.
What to know before you go solar
Before you purchase or lease a solar energy system, here are a few tips to guide your journey, and set expectations.
- Buy the right solar equipment. In the realm of home solar energy, there are two main types of systems: photovoltaic (PV) solar panels and thermal solar collectors. Thermal solar systems (also known as active solar heating systems) can capture the sun’s heat and use it to warm your home’s interior or water supply. Photovoltaic solar panels generate electricity to power your property’s appliances and electronics, like electric heat pumps. While both technologies are sustainable, solar-powered solutions, implementing the right equipment is vital to meet your home’s energy goals.
- Explore buying options. You can go solar in many ways: with a cash purchase, loan, lease, power purchase agreement, and more. While there are pros and cons to buying and leasing solar, it is best to explore all purchasing models before signing a contract.
- Work with an expert. Working with an expert is the best way to ensure your panels will be worth the investment. Top-tier solar panels produce electricity for over 20 years, so an expert-installed and expert-maintained system can produce power and savings for a long time.
Future Trends and Final Thoughts
After residential heat pump sales eclipsed those of natural gas furnaces in 2022, there may be no looking back. An electrified heating system powered by solar is likely the greenest and most affordable system to run. In the shift toward running more things on electricity, heat pumps and solar panels are going to be doing a lot of the heavy lifting in residential settings.
If you’re interested in electrifying your home in the greenest possible way, estimate your solar savings and contact Palmetto for a personalized energy consultation.
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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.
Brian ChurchWriterBrian is a writer, NABCEP PV associate and outdoor enthusiast living in Denver, Colorado. As a freelancer, Brian has written hundreds of articles to help individuals, businesses and our planet benefit from solar power and sustainable energy systems.
