In a dual-fuel system, a heat pump and a fuel-burning furnace share the job of heating a home. This guide explains how ENERGY STAR and Puget Sound Energy (PSE) define these systems. It shows how the balance point and switchover temperature work. It also covers the controls, PSE's rebate rules and what PSE says about energy bills.
What a dual-fuel heat pump system is
ENERGY STAR's air-source heat pump page says: "If you have a relatively new furnace with an older central AC, or if you are planning to add a new central AC to the furnace, consider an ENERGY STAR certified heat pump." It says this "creates a dual-fuel system for a modest extra cost over an AC system." ENERGY STAR gives no figure for that cost.
ENERGY STAR says dual fuel systems "allow for the flexibility of heating with a heat pump or with a more traditional gas or oil furnace." It says they let you use each system "optimally based on costs and environmental benefits."
PSE is a Washington State utility, and it uses the term hybrid. Its hybrid heat pump page says "a hybrid heat pump system is an energy-efficient combination of two HVAC units: an electric heat pump and a gas furnace." PSE describes how this works in its program. The heat pump cools in summer and heats in the milder weather of fall and spring. "As the weather gets colder and drops below 35 degrees, the gas furnace kicks in," PSE says. It adds that the pairing "provides redundancy in case one system fails."
Balance point and switchover temperature
The Building America Solution Center guide covers sizing heat pumps for cold climates. Pacific Northwest National Laboratory wrote it for the U.S. Department of Energy (DOE). It was last updated May 14, 2024. It says, "When outdoor temperatures are below the balance point, the heat pump cannot fully meet the home's heating needs without a backup heat source." It also says "the balance point temperature dictates when the home can take full advantage of the heat pump and when it must use an alternate heating source."
Northeast Energy Efficiency Partnerships (NEEP) gives a definition in its February 2024 guide to its sizing tools. It defines the capacity balance point as the "temperature at which the capacity of the heat pump equals the heating load in the house." NEEP notes that "the term balance point is also used to convey other concepts in the building science and HVAC fields."
The Building America guide says that in a dual fuel system, "the heat pump is designed to provide most, but not all, of the heat." It describes a switchover strategy. Under it, the heat pump does not run at the same time as the backup heat. In that case, all heating below the balance point falls to the backup source. The guide says, "This is often the scenario with natural gas dual fuel systems."
ENERGY STAR describes how a cold-climate air-source heat pump handles deep cold. It says the heat pump "will continue working at temperatures below 5°F, but pairing it with a back-up energy source will heat your home the most efficiently when temperatures are even lower."
Is there a standard switchover temperature?
We found no primary source that sets one switchover temperature for every home. NEEP's guide covers the compressor lock-out or backup switchover temperature. It says this setting "should be set based on the installer's experience or manufacturer guidance." PSE's 35°F figure is a rule of its own rebate program.
Controls for a dual-fuel system
DOE's 2022 Energy Saver Guide advises: "Install or have a professional install a smart or programmable thermostat with functions suitable for a heat pump."
PSE also uses a setting called the auxiliary heat lockout temperature. It defines this as "the outdoor temperature above which the gas furnace auxiliary heat does not operate." PSE says it "may be listed as 'auxiliary heat' temperature setting on a thermostat or may be changed via a switch on the heat pump compressor." PSE's program also sets a compressor lockout rule, shown in the table below. Ask your installer which lockout settings were set on your system. Our thermostat settings guide covers setback advice for heat pumps.
PSE hybrid heat pump rebate requirements
PSE's rebate shows one way a utility sets these temperatures. Its page is undated. As of October 2026, PSE's requirements include those below. They apply to PSE customers in Washington State. Programs change, so confirm with your utility.
| Requirement | What PSE's page says, as of October 2026 |
|---|---|
| Rebate | $1,500 to convert from natural gas furnace heating to a hybrid heating system; $2,400 Efficiency Boost rebate based on income |
| Customer | Current PSE single-family natural gas or dual-fuel (natural gas and electric) customer; electric-only customers do not qualify |
| Current heating | Primary and current heating system must be a natural gas furnace using natural gas supplied by PSE |
| Equipment | A central ducted air-source heat pump certified by the Air-Conditioning, Heating, and Refrigeration Institute (AHRI), the industry's trade association, paired with an existing or new natural gas forced-air furnace; ductless heat pumps are not eligible |
| Balance point | Thermal or capacity balance point of 30°F or below |
| Compressor lockout | Must not exceed the calculated thermal or capacity balance point |
| Auxiliary heat lockout | 35°F or below; the gas furnace must not operate when the outdoor temperature is above the configured lockout setpoint, except for defrost cycles and emergency or fault operation |
| Contractor | Must be a PSE Recommended Energy Professional (REP) or PSE Trade Ally; no out-of-network contractor and no do-it-yourself installation |
PSE hybrid heat pump rebate amounts, as of October 2026
- Standard rebate$1,500
- Efficiency Boost rebate (based on income)$2,400
What PSE says about energy bills
PSE cautions, "Unlike single-device heating equipment systems, specific bill impacts associated with hybrid heat pumps may vary significantly depending on the difference between natural gas and electric rates." It goes on, "While gas usage may decrease, electric usage will increase, offsetting some of the savings you may have expected on your overall energy bills."
Two of our guides look at this choice in specific places. See heat pump or gas furnace in western Washington and heat pump or gas furnace in Ohio. Our furnace guide covers furnace efficiency ratings.