When Upgrading your HVAC think 2 words...DUAL FUEL

Unless you live in a really warm climate or an extremely cold climate, duel fuel combines the best of both worlds. Let’s back up a little and go over HVAC basics. Generally what you’ll find in a home is a compressor that sits outside that comes on in the summer and provides air conditioning. You have a unit inside that is both your air handler and your gas furnace for the winter. In warm climates that have very mild winters, you’ll sometimes find a heat pump instead of a gas furnace. A heat pump is basically an upgraded outdoor unit that can both cool in the summer and heat in the winter. A heat pump is electric only whereas a furnace relies mostly on natural gas, oil or propane.

Before we go further, let’s give a quick overview of a heat pump and a furnace. A heat pump works by moving heat, rather than producing it. In the summer, it moves heat out of the house; in the winter, a heat pump moves heat into the house. What you have to realize is that all air contains some heat. Even when it is 20 degrees outside, there is still some heat in the air, otherwise it would be colder. A heat pump extracts that heat and moves it inside of your house. Of course, the warmer it is outside, the more efficiently, and cheaply, the heat pump works. A furnace is fairly simple. Gas burns and air passes over it, warming the air. The cost to operate is solely based on the cost of gas in your area and the efficiency of your furnace. The picture below is of a typical heat pump that you'd see outside of your house.



So what is duel fuel? A duel fuel system combines the best of both worlds. Since a heat pump is generally more efficient in moderate temperatures and gas is generally more efficient in colder temperatures, why not have both and use each when it makes the most sense? The thought is this…Unless you live in a warm climate, you will need a gas furnace. It is powerful in very cold weather and in most markets a heat pump can’t keep up. But for $500-$1000 extra, you can upgrade your standard air conditioning unit to a heat pump, which gives you the benefit of the heat pump in the mild temperatures and the power of gas in the extreme temperatures. Here is the math.

Figure natural gas costs around $0.90 per therm after taxes and fees. With an 80% efficient furnace, your effective cost per 100k BTUs is $1.13. With a 95% efficient furnace, your effective cost per 100k BTUs is $0.95. Below is a picture of a 95% efficient gas furnace (although on the outside, they all basically look the same).



Now figure your electricity in the winter is 9.5 cents per kilowatt hour after taxes and fees. Straight up, that equates to $2.78 per 100k BTUs, which is much higher than natural gas. But since a heat pump is transferring heat rather than producing it, you can achieve efficiencies well above 100%. For example, at 55 degrees, a heat pump can attain approximately 410% efficiency, brining your effective cost per 100k BTUs down to $0.68, much less than the gas furnace. As the temperature drops so does your heat pump savings. The break-even in this example occurs around 27 degrees Fahrenheit. With dual fuel, you can set an outdoor thermostat, which will automatically switches between gas and electric based on the outdoor temperature. Keep in mind that the break-even temperature changes as the cost of gas and electricity changes. As gas prices rise in the US, heat pumps look more and more desirable. And there are added benefits:

1. Heat pumps don’t dry out the air like gas furnaces do, which makes your house feel more comfortable. Dry air leads to cracked skin and dried out nasal passages, which can increase your chances of getting sick.
2. Since heat pumps are all electric, there is less risk of fire and carbon monoxide.
3. With so much uncertainty with both electricity and gas, why not give yourself both options. As gas goes up, switch the thermostat to lean towards the head pump. When electricity goes up, do the opposite.

Below is a link to a spreadsheet from http://www.goheil.com that allows you to calculate the effective costs of gas vs. heat pump. Goto to the Dual Fuel tab and fill in the blanks to see your cost at each temperature.

Heating/Cooling Cost Spreadsheet

To give you my personal experience, I live in Atlanta, GA and recently had 2 new HVAC systems installed in my house (1 per floor). I put a dual fuel system downstairs and a heatpump only (no gas furnace) upstairs. While they both work well, I have seen the disadvantages of the heatpump only system in the past few very cold weeks. As the temperatures got down to around 15 degrees Fahrenheit, I could tell the heat pump was struggling. It spent more time on than off and to raise the house a degree or 2 could take well over an hour. The gas furnace on the other hand, could raise the temperature 5-6 degrees per hour and ran sparingly, saving me money at only $0.75 per therm. While these low temperatures are rare in Atlanta, I did appreciate the flexibility I had with the dual fuel system. As soon as temperatures go back up to the 40s and 50s this week, the dual fuel system will automatically switch back to heat pump saving me money again.