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Heat Pump vs Packaged Air

Choosing an air conditioner is tricky. There are lots of options and they seem vastly different. Installations are complicated and buying an air conditioner is a major investment for most families.

So how do make the best choice? We’ve put together a series of articles to help you make the most informed decision about what type of air conditioner is best for you. 

This article covers heat pumps and packaged AC – two types of air conditioner designed for larger homes. 

What’s the difference between Heat Pump vs Packaged AC

The difference between a heat pump and packaged AC is that a heat pump can heat your home as well as air conditioning it. Packaged air is only capable of cooling.

Packaged air is a centralized air conditioning system with all the air conditioning parts housed in a single unit. The packaged air unit is normally located outside a property.

A system of ducts carries the cold air produced by the packaged AC into the various rooms of a home. 

By contrast, a heat pump does not use ducts to move cold air around your home. Instead, it connects to a network of radiators, underfloor heating, and air conditioning units.

A heat pump works by moving refrigerant through a system of pipes at different pressures using a pump and valve system. 

The pipes located outdoors are kept at a higher pressure to make them hotter than outdoor temperatures. Meanwhile, the indoor pipes are at a low pressure which makes them colder than room temperature.

The indoor pipes suck heat out of the air in your home, which is then transported outside via the outdoor pipes. Because the outdoor pipes are hotter than outdoor air, excess heat is lost to the outside air. 

With a heat pump, this process can be reversed by switching the balance of refrigerant pressures. The outside pipes become colder than outdoor air and the indoor pipes become hotter than indoor air. 

This process heats your home in the winter by pulling in heat from the outdoor air. 

Cooling Capacity

A heat pump is more powerful than packaged AC. Packaged AC produces 7,000 – 19,000 BTUs. A heat pump beats this figure with its 10,000 – 24,000 BTUs of cooling capacity. 

A BTU is a measure of the cooling capacity of an air conditioning system. One BTU is the amount of thermal energy needed to change the temperature of a kilogram of water by a single degree Fahrenheit. 

A typical packaged AC system with 15,000 BTUs of cooling power would be able to keep an 800-square-foot space at a comfortable temperature. That’s the size of a typical one-bedroom apartment.

A normal heat pump with a capacity of 20,000 BTUs would be perfect for a 1,000-square-foot family home. 

The smallest versions of both types of units in the 7,000 – 10,000 BTU would only be powerful enough for a large single room or a small one-bedroom apartment. 


Heat pumps cost more than packaged air. A heat pump will run you $3,500 – $7,500 while packaged air costs $2,000 – $4,000. 

Both units are pretty expensive and it mostly comes down to installation costs.

A heat pump is expensive to install because they need a system of pipes to carry refrigerant to various heating and cooling elements in your home. These pipes usually need to go through walls.

Additionally, some of the more advanced heat pumps use geothermal energy to maximize their energy efficiency. This is a fancy way of saying the external unit is buried deep in the ground. That installation process drives up the price of heat pumps considerably.

Packaged air is also fairly expensive to install. A professional will need to add a duct system to your home if you don’t have one already.

The outside units are housed above ground so the installation process for those components is a lot easier. 

Energy efficiency

A heat pump is more efficient than packaged air. Heat pumps waste less energy in the process of cooling down your home than packaged air.

Part of the reason for this difference in efficiency is that some heat pumps take advantage of geothermal energy to keep your home cool or warm.

Heat pumps are also more efficient than conventional heaters because they move heat into your home rather than just generating it. 

This means they can multiply their efforts. The energy used by a heat pump is moving thermal energy that already exists. Other heaters just convert electrical energy into thermal energy. 

You can calculate an air conditioner’s EER by dividing its cooling capacity in BTUs by the amount of watts of energy it uses. A higher EER means an air conditioner has greater efficiency.

Should I buy a Heat Pump vs Packaged AC?

You should buy a heat pump over a packaged AC if you want to cool and heat a large property with the same system. Heat pumps are more expensive than packaged AC so this purchase makes the most sense if you plan to take advantage of the heat pump’s dual functionality.

Another advantage of choosing a heat pump over packaged AC is its energy efficiency. Heat pumps are much better at using energy efficiency and will save you money on your electricity over time.

That’s another reason why they work well for larger properties.

Packaged air is much less difficult to install than a heat pump and costs less. So packaged air is probably a better choice if you’re on a budget.

You can still cool fairly large properties with packaged air. Packaged air is therefore a good option for cooling large homes on a budget.