Texas has a lower than average electricity cost and a higher than average natural gas cost, making it a great place to heat and cool your home with a heat pump (which uses only electricity and no gas) instead of a natural gas furnace plus air conditioner combination. Texas homeowners can save money upfront (by only having to buy one unit for both heating and cooling instead of both a furnace and an A/C) and potentially save money every month by reduced utility bills (since electricity is relatively cheap in Texas and gas relatively expensive). In addition, milder winters in Texas than other colder states make it a great option since heat pumps work more efficiently in milder winters. Finally there are currently both federal and local rebates on heat pump system purchases, making this a great time to install a heat pump system as your HVAC system in Texas.
In this article, we’ll explain:
- What a heat pump is and how it works
- Benefits of heat pumps
- Benefits of heat pumps specifically in Texas
- Why heat pumps work even in extreme cold
- Rebates on heat pumps
How Does a Heat Pump Work?
The simplest way to explain heat pumps is to look at them as an air conditioning unit that can also work in reverse. In a standard air conditioning unit, hot air is sucked in from outside via a liquid refrigerant that absorbs the heat and moisture, leaving colder and dryer air remaining inside. Ever go outside in the summer and wonder why it’s hotter by your AC unit? That’s because heat is being filtered out from the inside. Heat pumps can do that – they are literally air conditioners in the summer. But they can also reverse this process in the winter. Instead of hot air being sucked in from the inside and kicked out, heat’s now absorbed from the home’s exterior and pumped into the interior. In a heat pump, the same refrigerant is used to attract and move the warm air; where that warm air goes depends on whether your heat pump is in AC or heating mode. The end result is a system that can keep your home comfortable in both hot and cold climates. Here’s a video that explains how a heat pump works in a little more detail.
What are the Benefits of Heat Pumps?
Since a heat pump can cool your home in the summer and warm it in the winter, it is more cost-efficient. The heat pump’s single cost is often lower than the dual costs of separate AC units and gas furnace systems. If you live in a state like Texas, where electricity is cheaper than the national average and natural gas is more expensive, a heat pump can also lower your monthly energy bills. Instead of constantly burning natural gas to generate heat as a gas furnace does, a heat pump uses electricity to move the refrigerant that attracts and delivers warm air into your home. By running on cheaper electricity instead of more expensive natural gas, a heat pump overall requires less money to operate. In short, a heat pump is a system that costs less money upfront and produces cheaper monthly bills.
Ditching your gas heater also means ditching a major source of carbon monoxide poisoning, which is often fatal. Natural gas isn’t just dirty and inefficient; it’s downright dangerous. Lastly, heat pumps reduce carbon emissions and help the planet breathe a little easier. So when we look at some of the primary benefits of choosing a heat pump, we see that cost-efficiency happens on multiple levels, both on a monthly short-term basis and in long-term costs. We also see a safer, cleaner home environment by eliminating natural gas and an eco-friendly investment that helps detoxify our homes, communities, and planet. But let’s get back to you, Texans. Why do heat pumps make even more sense for Texas homes?
How do Heat Pumps Save Texans Money?
Chances are you heat your home using a natural gas furnace, so when we talk here about a heat pump as an alternative to traditional heating systems, we’re drawing specific comparisons between heat pumps and gas furnaces. While every state has access to both electricity and natural gas, different parts of the country carry different rates and expenses for each. Compared to the rest of the country, Texas has lower electricity rates. The actual cost of electricity is about $.0.09/kWh, meaning that Texans enjoy a considerably cheaper electric bill than many other states. For homes that have solar, those prices go even lower since solar panels can produce a home’s energy without needing to purchase electricity from a power company. Gas, on the other hand, is more expensive in Texas. The state ranks 34th out of 50 for gas prices, meaning Texans pay more on average for natural gas than most of the country. Now let’s apply this to your home’s heating system.
Where a furnace requires natural gas to run and heat your home, a heat pump HVAC system forgoes the need for gas and runs purely off electricity: this is true for both the heating and cooling systems. Since the two systems rely on different utilities to perform, it’s easy to draw a cost comparison between them — one simply needs to look at the cost of electricity versus gas. Texas, in particular, has lower electricity prices than the national average and higher gas prices than the national average. So, a gas furnace in a Texas home will naturally bring in a higher operating cost than an all-electric heat pump. Since a heat pump can work all year round without ever needing gas, the savings are consistent and lead to a more cost-efficient home overall.
Can Heat Pumps Work in Extreme Cold?
While Texas is notorious for its long, hot summers, the state also experiences some extremely cold winter months. While there’s often speculation about heat pumps and weather, it’s a complete myth that these systems aren’t equipped for extreme cold. Heat pumps can provide heat for your home even when the temperature drops well below freezing. How? The refrigerant in heat pumps works to both cool and heat your home by sucking in the heat from one place and dumping it elsewhere. In the summer, the refrigerant grabs heat from the inside and kicks it out, making your home cool. In the winter, the refrigerant takes heat from the outside air and brings it into your house. But how can a heat pump suck in hot air from outside when it’s 20 degrees in December?
Science tells us that heat always moves from hot to cold. So if something is colder than that 20-degree air, all the heat will move to that colder thing like a magnet. Remember that heat pump refrigerant we talked about? That liquid is always really, really cold: -55 degrees, in fact. So even on the coldest winter days, that refrigerant is colder, meaning that it will always be able to attract all the heat from the outside air and bring it inside. The result is a consistent and reliable system, even in Texas’ coldest winter weeks. And remember, it’s heating your house at a significantly lower cost than your gas furnace!
Rebates are Available for Homeowners Who Switch
In the face of more renewable electricity efforts, government leaders are urging more homes to invest in systems that can run on electricity year-round. This encouragement comes in the form of state and federal rebates available for Texan homeowners that switch to a more energy-efficient heat pump. Under the Energy Efficient Home Improvement credit, qualified homeowners can receive a federal tax credit covering 30% of the entire system cost, allowing those homes to purchase and install heat pumps at a significantly lower price. For homes that switch to full electric heating and also invest in a renewable electricity system like solar, there’s an additional 30% that’s offered via the Residential Clean Energy credit. Both rebates are part of the Inflation Reduction Act, and the funding is distributed via tax credits that homeowners can claim when they file for the year.
These tax credits help lower what you owe the government when you file. They also work with various IRA programs that can offer additional refunds for energy-efficient investments. HEERA (The High-Efficiency Electric Homes Rebate) and HOMES (Homeowner Managing Energy Savings) offer another $8,000-$14,000 to homeowners that switch to a new heat pump, granting the household income isn’t higher than 80% of the Texan median. While folks can’t stack HEERA and HOMES on the same heat pump installation, upgrading your HVAC system alongside another renewable investment like solar means the house becomes more eligible for stacked rebate programs and funding.
Beyond the federal funding available, Texas has additional state rebates for homeowners that invest in a heat pump. Since state legislation passed new renewable energy standards that utility companies must meet annually, many local companies have offered additional rebates and incentives for switching to a greener heating system. When you take advantage of the federal and state incentives available, you should also call your local power company — odds are, they have additional programs you can qualify for.
