Heat pumps are quite common in Central Oregon where summer daytime highs are often over 100°F and nights below 25°F. I have been in many a heat pump rental house in winter at below 10°F in a wide range of efficiencies from below eight to over 20 SEER. They work fine.
For units with a SEER of over 14 or so, the backup heat does not kick in (except for defrost cycles) in cold, dry weather and the thing pumps a lot of heat into the house with air register temperatures over 110°F. These are all air source units—there is no groundwater in the desert. Natural gas is available and cheap, but about half of the owners choose heat pumps, the remainder choosing central air plus a gas furnace. The recent trend seems to be favoring heat pumps more.
A close friend had a ground source heat pump installed in his Willamette Valley home (temperate, moist climate). It was beautifully quiet, compact, and tremendously efficient. When I asked if he would do it again, he said "No. The expense of excavation would not pay for itself in his lifetime." (He was about 32 at the time). For a level lot in nice sandy loam with the water table about 6 feet deep and good water flow from 2 feet deep and below, it cost $45,000 twenty years ago just to install the ground loops. I can't imagine what it would cost now.
I'm told the units will somehow be set so that the furnace kicks in automatically when needed, but I'm wondering how that is actually determined.
I have owned two heat pump systems (okay three: one was an upgrade replacing another). Backup or emergency heat (same physical thing) is activated under any of several conditions:
During defrost cycles—which only occur during system "heat" operation. The heat pump outdoor fan is turned off, the system reverses to cooling mode to melt frost and ice built up on the outdoor unit. To keep from blowing cold air indoors at a time heat is expected, the backup heat is turned on to remove the chill. My most stupid heat pump, a 1980s relic, used a timer which ran a defrost cycle for 4 minutes out of every 45 minutes (of system "on" time) whether it was needed or not. The other two systems were much smarter and learned under what conditions defrosting might be needed, would engage defrosting every hour or two, somehow detect if it wasn't needed and return to heating within a minute. Otherwise the defrost cycle could run up to 3 or 4 minutes.
When the thermostat (which are necessarily specialized for heat pumps) is switched into emergency heat mode. You would do this if you did not want to run the heat pump because a tree fell on it or something.
When a simpler thermostat's setpoint is more than 4°F above the current room temperature, or when a smart thermostat determines that the heat pump is not going to get the temperature to the setpoint anytime soon.
I've also heard the pump is cheaper for heating, but I am wondering about the specifics. How much cheaper would a heat pump be to run? Both run on electricity to some extent, but does the heat pump use more electricity to warm the house than the furnace, and, if so, is it enough to make up for the cost difference?
Yes, a heat pump uses more electricity than a furnace, which only blows air inside. A heat pump blows around air outside and inside, plus it runs a hefty refrigeration compressor. The seasonal energy efficiency ratio (SEER) is a measure of how much heat is moved compared to how much energy was input to move the heat. An electric furnace or electric baseboard heater would have a SEER very close to 3.8. A new window air conditioner is now required (in the U.S.) to be at least 8.0, and for an Energy Star rating, at least 14.0. Ratings of 10–12 were recently common in low end heat pumps, but the required minimum is 13.0 since 2005. As the rating increases, so does the purchase price.
My Portland, Oregon, condo came with an electric furnace. When it was installed in the 1970s, electricity cost 2.2 cents per kilowatt hour; today's price is $0.07–0.11 depending on the power company. During a particularly cold winter storm c. 2004, my electric bill made it to $300 per month, mostly due to some compromised windward windows—normal winter electricity ran $50–70. I replaced the electric furnace with an 18 SEER heat pump costing $7,000; a 15 or 16 SEER version was $5,000 IIRC. Afterward, my electric bill was $45 in normal winter weather and up to $60 in severe cold, most of which was probably to run a bank of five computers 24x7. While the economics may not make perfect sense, I am sure the more "normal" electric rates which most areas have would easily make the break-even point plenty soon enough.
I am really happy with having a heatpump. I would consider doing a ground source if there were a cheap way to bury the tubing, but otherwise the air source is just fine.