Packaged Heat Pumps vs. Split Heat Pumps: Why You Should Install One

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You've decided to upgrade your heating system from the current furnace to a high-efficient heat pump. But you're not sure if a packaged heat pump system or a split-system is right for your home. The HVAC industry offers so many choices.

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Many of your neighbors have switched to heat pumps, and they rave about the savings in their power bills. But mostly they've installed mini-split or ductless units and have chosen to cover only selected areas of their homes. They still use their furnace as the primary source of heating.

You don't want to do that. You would prefer to install a new system that covers the whole house and gives you efficient heating with summertime cooling too — the best of both worlds.

Let's consider the benefits and disadvantages of both an air-to-air packaged system and a central split-system, using the existing ducting in your home, if possible.

Packaged heat pump system

Goodman packaged heat pumpGoodman packaged heat pump
photo: Goodman
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A packaged heat pump system, as its name suggests, has all the usual HVAC components - the compressor, coils, and air handler - in one outdoor unit. The only thing that's inside is the ducting to deliver the air around your home.

The unit can be located on the ground or, if suitable, on a flat roof. However, it won't look aesthetically pleasing. The alternative is to forego a small part of your garden space to accommodate the unit, which can sit on a plinth beside the house. It is possible to install it on a pitched roof, too, but there can be installation issues that will potentially cost more.

The single unit with all serviceable parts in one place makes regular care easier and quicker for you and technicians, keeping maintenance costs down.

Packaged heat pump systems have no mechanical or electrical components fitted inside your home, so the system runs quieter, which is a bonus. However, a brand-new split-system heat pump will run quietly too.

Possible downside of a packaged system

One potential downside of the packaged heat pump system is because the main components are all outside, there is a higher risk of damage from adverse weather over time.

If you choose to locate it on the ground, you need to make sure it's kept clear of leaves, grass cuttings, other garden debris, and of course, snow. If you install the unit on a flat roof, it's a bit more awkward to access for cleaning, repairs, and maintenance, but it leaves your garden free.

Packaged air conditioners have inbuilt electric heating coils and can also include a natural gas furnace. This combined arrangement of air conditioner and heater removes the need for a separate boiler. This is called a dual fuel unit.

If your existing furnace is in good shape, you could consider combining it with a new heat pump. That way, you get the best system for all-year-round comfort. The heat pump will handle heating and cooling efficiently for most of the year; however, the furnace will automatically kick in, in freezing weather, if the outside temperature drops below 35 F.

A dual-fuel system will deliver the most efficient and cost-effective way of keeping your home comfortable no matter what the season is.

Packaged systems can be less efficient

One disadvantage of a packaged heat pump system is they are typically lower in efficiency than split-systems. They usually range between 13 and 15 SEER, so it's easier to attain higher efficiency with a split-system.

The packaged system is factory-built, which means there's no assembly required. When the unit arrives on site, it will function at top efficiency as soon as the installation is complete. The only additional on-site part of the project would be the ducting system unless you plan to use your existing ducting.

If this is the case, a professional survey should be carried out to assess the suitability of the ducting to ensure it's in good enough condition to use with the new system. If it's old and leaky, you will immediately lose a substantial part of the efficiency gain of your new unit compared to a new ducting system. It's not worth penny-pinching on something so important.

Because the packaged heat pump system is outside in all weathers, the components are subject to degradation over time. Animals can also find a way inside to get warmth in the winter and can find wiring and insulation tasty to nibble on. As the unit ages, rusting can also be an issue, so overall, they tend not to last as long as split-systems.

Split-system heat pump

Frigidaire split heat pumpFrigidaire split heat pump
photo: Frigidaire

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With a split-system heat pump, part of your installation is outside and the rest inside.

There are three main components:

  1. The outdoor unit with the central compressor and condenser. 
  2. An indoor unit with the evaporator coil.
  3. The indoor air-handler which uses your duct system to circulate air.

Because some of the main components are inside your home, they will have a longer life away from the harsh outdoors.

Savings available

Split-system heat pumps deliver much higher efficiency than packaged units.

Some ENERGY STAR split-systems have a SEER rating as high as 25. If you link a split-system heat pump to a smart thermostat, it can deliver substantial savings in power consumption. In the USA, check here for savings.

Check out the Air Conditioning, Heating & Refrigeration Institute (AHRI) to see what tax savings you can make for installing energy-efficient systems.

The higher the SEER rating, the less your system will cost to run. Check out this fuel savings calculator to see how a higher SEER rating will save you more money on your home heating bills.

Split-system – The installation is critical

The split-system heat pump will only be as good as the installation, which is why it's essential to use qualified, professional HVAC technicians from a reputable company.

Often the internal parts of a split-system are installed in the attic, so some thought needs to go into the placement of the unit to ensure proper easy access for maintenance or breakdown. Try not to make it too hard to reach or work on it for servicing and repairs.

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Ducting – New, or use existing?

Both systems link to ducting to deliver the air around your home. However, split-systems are more complicated and more expensive to install because of the separation of the components, and the additional work involved installing them correctly.

You can link your existing furnace with your packaged or split-system heat pump to deliver additional heating in freezing conditions. It could be the ideal solution, providing heat on demand in winter, with efficient cooling in the summertime, all with maximum savings on your power bill.

Don't purchase on price alone

Whichever system you choose, don't purchase it on price alone. You will only be sure your purchase was worthwhile after 12 months. Experience the full range of cooling and heating seasons to assess its performance. Plus, with a year's worth of power bills, you'll be able to evaluate the savings too.

Each home is different, so book an assessment with a qualified HVAC professional. They will look at what you have and what you need to achieve your goals, then make recommendations.


Which system to choose? It will depend on the type of home you have, your available budget, and your HVAC assessment.

In the end, it will be down to your personal choice and the final costs, but don't forget to involve a professional HVAC engineer from the outset. It could mean the difference between the right decision for you in the long term, or a costly mistake.

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