A balance point is the approximate outdoor temperature at which the maximum heating capacity of the heat pump matches the heating requirements of the home.
The lower the temperature outside drops, the greater the heating needs are of the home. As the temperature drops, the heat pump has a harder time absorbing heat, reducing the amount it can bring into the home. When the outdoor temperature is below the balance point, the heat pump needs help from a backup heat source, such as a resistant heater or furnace. When the outdoor temp is higher than the balance point, the heat pump alone can keep the home comfortable.