An air handler is the indoor unit of a heat pump or AC system that contains the blower and the indoor coil and, in most heat pump installations, an electric heat kit — resistance “strip” heaters that supply auxiliary heat when the heat pump can’t keep up and during defrost — whereas a furnace is an indoor unit that makes heat by burning gas (or with electric elements) and also houses the blower and, above it, the AC coil. In North Carolina most heat-pump homes have an air handler with strips, and because those strips cost two to three times as much per hour of heat as the heat pump, how they’re sized and controlled decides the winter bill.
Air handler
Blower (increasingly a variable-speed ECM motor), evaporator/indoor coil, filter rack, and a heat kit of one or more resistance elements, commonly 5–20 kW total in stages. In cooling it’s the indoor half of the AC; in heating it moves air across the coil while the heat pump supplies heat, and brings strips in as needed. Sits in a closet, attic, crawlspace or garage.
Furnace
Burners and heat exchanger (gas) or heating elements (electric furnace), blower, and the AC or heat pump coil mounted on top. A gas furnace with a heat pump outdoors is a dual-fuel system; a gas furnace with an AC outdoors is the traditional pairing.
Why strip heat is expensive
Resistance heat is 100% efficient: 1 kWh in, 3,412 BTU out. A heat pump at NC winter temperatures delivers two to three times that per kWh. So each hour the strips run instead of the heat pump costs two to three times as much. A 10 kW heat kit draws about 10 kWh an hour, roughly $1.50 at typical rates; twelve hours a day of that is a shocking January bill. Strips are supposed to run briefly during defrost and on the coldest nights; when thermostat settings or a struggling heat pump keep them on, that’s the problem behind most winter bill complaints (aux heat stuck on).
Sizing and control
The heat kit should be sized from the heating load and the heat pump’s output at the design temperature, in stages so only what’s needed comes on; oversized kits (installed “to be safe”) cost money every time they fire. Control is the thermostat’s job: system type set to heat pump, an aux lockout temperature, small setbacks or heat-pump-aware recovery (thermostat settings). Ask at installation what kW is being installed and why.
When each makes sense
Air handler with strips: most NC homes without gas, or where a heat pump is replacing an electric furnace or an older heat pump. Furnace: homes with gas that keep the furnace as dual-fuel backup, or the minority of homes better served by gas heat (heat pump vs furnace in NC). Every contractor on the North Carolina registry shows the license status we found.