A duel fuel heating system uses both a heat pump and a fossil-fuel furnace to keep your home warm.
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New tech, old backup

What Is A Dual-Fuel Heating System

Steve Hansen
September 6, 2023

While air conditioners use lots of electricity, with the incentives available in the Inflation Reduction Act, lots of folks are thinking about going electric with their heating, too. If you need to replace your central air conditioner, you should definitely consider a heat pump. And, because extreme weather (including cold snaps) is becoming more common, it’s important to be prepared for both hot weather and cold. If your home does not have an up-to-date heating system (or relies primarily on fossil fuels for energy, such as natural gas, propane, or heating oil), you can almost certainly save money with a dual-fuel system. It will also cool your home more efficiently.

How A Dual-Fuel System Works

A dual-fuel heating system uses a combination of an electric heat pump and a gas furnace to handle all the heating and cooling needs of your home. The heat pump handles the heating when the weather is moderately cold, as well as the cooling when the temperature is warmer. The gas furnace takes over when the temperature drops below the heat pump’s optimal range. In practice, that’s somewhere under 32° Fahrenheit, typically, but with advances in technology, there are heat pumps that will run efficiently all the way down to 5° Fahrenheit.

The two systems (linked by an intelligent controller using the same thermostat) work together to ensure your house stays warm and your bills stay low. In many cases, homeowners will install a new heat pump to replace their existing air conditioner and leave their existing furnace in place as a backup for extra cold days.

What’s In the Kit?

A gas furnace is a fairly basic piece of equipment. Propane or natural gas flows through pipes into the burner, gets ignited, and the heat produced goes to a heat exchanger. A fan or blower then pushes air over the heat exchanger, and then the hot air gets distributed throughout the house in ductwork.

An electric heat pump is a lot more complex but also more efficient. It works like an air conditioner that can run in either direction, pulling heat out of either the inside or outside air and then sending it where you want it. If you have an existing air conditioner with ductwork, a heat pump is nearly a drop-in replacement. In this case, we’re talking about an air-source heat pump, which has a limited range of efficient operation, so when it gets wicked cold outside, the gas furnace kicks in to heat your home. Thus, the “dual fuel” label that we’re using in this article.

You’ll see the term HSPF, which means heating season performance factor, applied to heat pumps. You’ll also see the SEER rating, which means “seasonal energy efficiency ratio,” and rates the cooling power of the unit. You can read more at the link above but expect to pay more for higher-efficiency heat pumps. You’re getting a higher-quality product that will use less energy, which means less cost over time.

You can also read about ground-source heat pumps here. These work well, but the investment is at another level because you will need a contractor to install the “loop” in the ground or in an appropriate body of water on your property. The loop is typically plastic piping filled with antifreeze that circulates from the earth to the heat pump and then back out to the earth.

Even in very cold climates, the earth maintains a constant temperature that’s much warmer than the ambient air temperature on a cold winter day, so the heat pump can extract that heat and pump it into your home. Ground-source heat pumps require some space for the loop, so they’re not an option for all homes in the way that air-source heat pumps are. And all that digging does tend to be expensive, so it’s an investment that doesn’t work for everyone.

Other Factors to Consider

There’s more than one type of air-source heat pump, by the way. You can install a system that uses your home’s existing ductwork if your home has that in place already. If you choose this type of system, you’ll find that this is a straightforward add-on system. The heat pump will deliver both hot and cool air through the ducts, just as you’re accustomed to.

But what if your home doesn’t have ducts? Or what if you have a room that is often too cold or too hot? Plenty of homes have central air conditioning and also have a room or two that also needs a noisy window air conditioner. Or they have a room that always needs a space heater in the winter. Or what if you have a home addition and wonder how to best heat and cool it?

That’s where a ductless mini-split system could be the solution. This type of system does not use ducts to deliver conditioned air, but instead places a control unit, or evaporator, in a room, or in several rooms in the house. This type of system also places the compressor(s) outside the home. Your contractor will use an industry formula to determine the number of indoor and outdoor units that your home requires based on your climate and the square footage of the home.

Instead of pushing air through ducts into your room, this type of system heats and cools a fluid (called a refrigerant) at the outside compressor unit. The fluid then travels through relatively thin, flexible, insulated tubes to the evaporator unit, and there a fan blows air over the fluid so it can deliver the hot or cold air to that room, or to that zone of your home.

Instead of running ductwork throughout your home to deliver cool and hot air, you’ll just need a three-inch hole through an exterior wall for the tubing to go from the compressor to each evaporator unit. These units typically have remote controls also, so you won’t have to fuss with a central thermostat anymore.

Granted, you may object to the “visual clutter” of a mini-split compared to the basic little vents of a forced air system. The units do look sort of like another piece of electronic hardware hung on the wall. To each his own, but I would say that the precise control, improved comfort, and greater efficiency are well worth it. (You can also get ceiling and floor mount cassettes if you don’t like the look of a wall-mounted unit.)

What Does It Cost?

You can find a lot of useful cost information here. If you are adding a mini-split to your existing system, and the installation is all quite simple, you might see just a $3000 charge or so. But it could get up to $10,000 or more depending on what’s needed. However, the Inflation Reduction Act could be your wild card!

IRA Incentives

The Inflation Reduction Act not only has a bump for your solar system, it will give you a bump for your new heat pump. You can take a tax credit for “30% of the costs of buying and installing a heat pump, up to $2,000 including support for any electric system upgrades needed to make the home heat-pump-ready.”

You can also get some help with installation costs depending on where you live:

“Beginning in 2023 state programs offer low- and moderate-income households rebates for heat pumps at the point-of-sale, cutting costs of purchase and installation up to $8,000. If home electrical upgrades are needed to integrate new heat pumps, rebates of up to $4,000 are available to households.”

That’s a substantial benefit, so even if you feel like you don’t have the cash to drop on all this hardware at this moment, consider that you’ll have great tax benefits and rebates, as well as decreased utility costs over time. You will almost certainly come out ahead if you upgrade to a more efficient dual-fuel heating and cooling system.

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