How to Determine Optimal Operating Setpoint for Heat Pumps

By Ted Tiffany

Heat pumps have outsold furnaces for four years running, and in the first half of 2026, they held 58% of the U.S. space-heating equipment market. They have overtaken furnaces in this market for many reasons. For one, unlike fossil-fuel furnaces, heat pumps emit no pollution. Contractors and their customers are also increasingly recognizing that heat pumps deliver greater energy efficiency, better heating and greater cost savings than fossil-fuel furnaces.

As heat pumps gain popularity in the U.S., contractors need to learn how to determine if the heat pumps they install should have backup heating capacity from an electric resistance system or furnace. For some customers this backup might be needed to keep the home comfortable at very low temperatures. And if so, at what outside temperature this backup heating system comes online: the heat pump’s operating setpoint.

The setpoints are also very different for standard-efficiency heat pumps compared to cold climate-rated heat pumps. In some regions, backup heat will impact the customer’s energy bills, since at very low temperatures some heat pumps cost more to operate depending on the type of backup source: electric resistance heat, gas or delivered fuels like propane or fuel oil.

Depending on the specific heat pump model and setup, this operating setpoint temperature will be a supplemental heat setpoint (meaning the backup system supplements the heat pump’s heat) or a crossover heat setpoint (meaning the backup system takes over heating the building from the heat pump). Normally, the heat pump will be configured with an operating setpoint at the factory and may need to be adjusted by the contractor when commissioning the system.

An operating setpoint can vary between two concepts: the thermal balance point of the home and specified equipment or the economic balance point. The thermal balance point is the outside temperature at which the heat pump cannot meet the indoor temperature setting and backup heat is needed to supplement the primary heat pump system. The economic balance point is the outside temperature at which using backup heat minimizes the customer’s energy bills. These points will vary on a case-by-case basis, depending on the customer’s heat pump, type of backup heat system, climate and home envelope.

Today, many contractors set conservative operating setpoints to avoid callbacks rather than determining these balance points and setting an operating setpoint in line with them. However, given how well modern heat pumps maintain capacity and efficiency in the depth of winter, setting a conservative operating setpoint will underutilize the heat pump by prematurely using the backup heating system.

Because each building is different, the first step in determining a thermal or economic balance point is to perform a load calculation using Manual J or an equivalent method, which provides the home’s thermal heat loss at design-temperature. Contractors should avoid using less accurate rules of thumb like the square footage or age of the home, or simplified “block load” calculators to determine the thermal heat loss, as these may lead to oversized equipment.

Determining the home’s thermal heat loss enables contractors to assess the home’s heat loss at the design condition and how many hours the system might operate at this setpoint throughout the year. This data will help establish the thermal balance point between the home heat loss and the heat pump system selection. To determine the economic balance point, contractors also need to also factor into this calculation the heat pump’s efficiency, backup heating source, and local utility rates.

The selection process should include comparing the low-temperature performance tables from heat pump manufacturers the customer is considering. Contractors can obtain this data from the manufacturer specification sheets, which usually include full- and part-load capacity and efficiency performance tables at 47 F, 17 F, 5 F and sometimes at the lowest operating temperature. These tables can then be used to determine the thermal balance point for the home.

Time to rethink traditional setpoints
Modern heat pumps that have been developed in the last few years have a much better cold weather performance than traditional heat pumps most contractors are familiar with.  It’s time to dig deep on the latest performance tables and select heat pumps tailored to the project at hand.  The thermal balance point for the specific home and equipment can be set much lower with the right specification.

Educating customers on the performance of the equipment and how setpoints are selected is the easiest way to give them flexibility on selecting their own economic decisions for their family, as well. With changing fuel prices and utility rates, understanding setpoints can allow for flexibility in how homeowners operate the system to comfortably and efficiently heat their homes.

Ted Tiffany is senior technical lead at the Building Decarbonization Coalition.