Kelly O’Connell and her husband, Phillip Soucy, had a checklist of features they wanted in their first home. It needed to be a single-family house located north of Boston with MBTA access. It had to have a basement or garage to be used as a workspace. Ideally it would have some character. And of course, it needed to be in their budget. 

That’s how, in November 2023, they settled into a single-story home in Medford, Mass., with unique details like a dormer on the roof and coffered ceilings inside. The home’s existing fossil fuel heating system, however, was “on its last legs.” 

But that, too, was something of a selling point for O’Connell, 31, who is a building engineer, energy data analyst, “and a climate geek” by trade and by passion.

“I definitely knew that I wanted to get our house as efficient as possible,” O’Connell says. “Heat pumps are well-known to me, and I definitely knew that this was the right fit for this house.”

So what is a heat pump, and how does it work?

Heat pumps are electric HVAC systems that both heat and cool a home by moving heat rather than generating it.

“Basically, a heat pump is an air conditioner that can reverse the flow of refrigerant,” explains Steve Pemberton, senior technical advisor at Elephant Energy, a climate tech company that specializes in heat pumps. In the summer, it pulls heat out of the house and pushes it outside. In the winter, it extracts heat from the outside air and brings it inside.

Even in a cold climate like Boston, “technology today has the capability of extracting heat from the outside air down to minus 20 degrees [and below],” Pemberton says. Unlike fossil fuel systems that burn propane or natural gas to generate heat, heat pumps are more efficient because they simply move existing heat, rather than create it.

“It almost seems like sorcery, which is why I call it magical,” says Josh Lake, cofounder of Elephant Energy. “Like, how on a really cold day can you possibly pull heat from the air and bring it inside? And yet, heat pumps have been around for many, many years. They work well in super cold climates … and they work here.”

Heat pumps can take on a couple of different forms. Ducted air-source systems commonly replace a traditional furnace, while minisplits are an alternative to baseboard heating. 

And better yet, they eliminate the need for AC, meaning it’s just one system to invest in for both heating and cooling.

Designing the right system

O’Connell’s home, circa 1930, had a furnace in the basement and vintage, “clunky” steam radiators on the main floor. 

While a ductless system of minisplits installed on the walls would have been the cheapest and most efficient solution for her Cape Cod-style home, O’Connell worked with Elephant Energy to determine the best solution for their home and lifestyle. They ultimately chose a ducted system that vents from the ceilings in the main living areas.

Elephant Energy also installed a minisplit to heat and cool the open concept, semi-finished basement, which will make it a comfortable year-round workspace. “It was nice to be able to mix and match and get the best of both [styles],” O’Connell says.

Cost considerations: Saving money with smart upgrades

The total cost of the project was $32,000. But the couple paid nothing up front.

O’Connell and her husband pursued residential incentives from Mass Save^®, a collaborative of local utility companies and service providers that encourages citizens to make energy efficient upgrades. They qualified for the maximum $10,000 heat pump rebate, as well as a 0 percent heat loan and $2,000 in tax credits, so their $32,000 HVAC system cost them nothing out-of-pocket and is now an interest-free monthly payment.

For comparison, quotes they received for a standard boiler replacement were in the ballpark of $16,000, O’Connell says, but there were unknowns regarding the existing system that could have increased that cost. “We might have had to replace a bunch of pipes, because those radiators were probably in here for 60, 80 — who knows how many —  years?” she says. “I think this is a much more high-tech and long-term solution.”

Plus, that boiler would have required a separate air conditioning system for cooling, which could have added another $5,000 to $12,000 to the total cost — meaning the traditional setup could have run well over $23,000. By comparison, their all-in-one heat pump system, which provides both heating and cooling, came to just $20,000 after rebates.

The bigger picture

So, do heat pumps actually save money? The short answer is “not yet” in O’Connell’s case, but that may change over the next few months as their system shifts from heating to cooling. 

While this past winter’s electricity rates led to higher-than-expected utility bills, the couple is playing the long game. Their new heat pump system cools the home in summer, which eliminates the need for separate AC units — a major financial bonus considering it’s just one system doing the work of two. Plus, the couple recently took another step toward energy independence by installing rooftop solar panels on their Medford home. “So as we build up energy credits over the summer, we’re expecting that our bills by next year will be, hopefully, near zero,” O’Connell says.

Of course, every home — and homeowner — is different.

For instance, Josh Levinger, an engineer at Elephant Energy, got a heat pump installed in his Somerville home in August 2024. He immediately enjoyed the cooling and dehumidification benefits. His total annual bills are about the same as before the install — they go up in the winter and are lower in the shoulder seasons, he gets clean and conditioned air for “free.” With the air sealing and additional insulation required for the Mass Save rebates, he says his home is more comfortable than ever.

The real estate impact

While resale was never a motivating factor for O’Connell and Soucy when purchasing their Medford home, the value of their upgrades is clear. 

“There’s no doubt that they do [add value],” Adam Shulman, realtor with Leading Edge Real Estate, says. When he took a look at the single family homes (with three or four bedrooms and two bathrooms) sold in Middlesex County over the past three months, he notes that homes with a heat pump sold for 6.6 percent higher than those that didn’t.

And anecdotally, it seems like more buyers are making the switch, he says. “More people are adopting this technology, and learning about it, and learning about not just the benefits, but [the rebates and tax credits].”

How Elephant Energy is streamlining the switch

Still, making the leap to a new system — especially one tied to evolving incentives and unfamiliar tech — can feel overwhelming. That’s where companies like Elephant Energy aim to make a difference. By helping homeowners navigate the rebate landscape, design systems tailored to their needs, and access affordable financing, they help simplify what can otherwise feel like a complex transition.

“You don’t know what’s the right system, what’s the right design for your home, what’s the right equipment. You don’t know how to maximize the chance of getting financial incentives and rebates. You don’t know what your operating costs are going to be afterwards,” says DR Richardson, cofounder of Elephant Energy. “By building some technologies around all those questions, we can deliver a better customer experience by partnering with the local installers.”

In the end, it’s not just about replacing an old system — it’s about reimagining the future for your home. For O’Connell and Soucy, the benefits of a heat pump are already adding up: more consistent comfort, meaningful financial incentives, and potential resale value down the line. And, with the support of Elephant Energy, they’re confident their investment will continue to pay off for years to come.