Can I see your heat loss/gain calculation?
Any heating or cooling appliances should be sized by a Manual-J het loss or equivalent. There are short cut heat loss and heat gain calculators online and I have looked into many of them. My consensus is the quicker and/or easier the calculator is, the further from accurate the calculation is. Unlike boilers, furnaces and air conditioning that should be sized according to the heat loss calculation a heat pump may be best if slightly oversized, by up to 20%. Use manufacturers information to determine home much. If this is done use a modulating AWHP in your application.

Why is a heat loss/heat gain calculation so important?
Yes, since most heating appliances are oversized they will produce more heat than needed so the appliance will short cycle. This short cycling will create higher operating costs.

Can't I just size the AWHP as the same size as my current heat source?
No, most existing heating appliances are way oversized. If you size by using the current appliance size and add more to slight oversize to meet the most efficient operation you will cause short cycling.

Will an AWHP reduce my heating costs?
This is a hard question to answer directly for multiple reasons due to moving targets. We would have to consider a few factors. We are not considering any electric or gas back-up below.
1. Average outdoor monthly temperatures from year to year by winter months
2. Moving current fuel and electric prices year over year and area to area
3. Combined gas & electric or gas and oil bills per month
4. Was the AWHP oversized
5. Is the heat pump of the modulating type?
6. Are the settings on the heat pump set properly?
7. If using night set back, how much is to much?
8. How does you thermostat recover from night setback? Does it recover from setback a couple degrees at a time to avoid the back-up devices from operating?
9. Are the circulators properly sized?
10. Was the AWHP properly installed?
11. Is the water temperature setting for the water to run through the pipes too high?
12. Is the AWHP operating on an outdoor sensor for the proper water temperature at a given outdoor temperature.
So, let me answer your question. Yes and no. Yes it should be cheaper on a year-to-year comparison if the AWHP was sized and installed properly. I will warn you though, there may be a month or two where the cost may be higher but most months will be lower. The average cost per year will be lower.

With the higher cost of electricity compared to the cost of gas or oil how can it be cheaper to operate? It's all about the operating efficiency. Heat pumps have two efficiency ratings. The first is the Seasonal Energy Efficiency Ratio (SEER) and applies to the air conditioning side of the heat pump. The higher the number the more efficient the cooling cycle will be, The second is the Coefficient of Performance (COP) for the heating cycle. The higher the number the lower the operating cost. Electricity is billed in Kilowatt hours (KWh). To explain this let's assume you choose a AWHP with a coefficient of 4. The means for every 1 KW of electricity you buy you will get 4 KW of heat. The COP is a moving target as the outdoor temperature changes. This is why it is a good idea to oversize slightly according to the manufacturers heating curves. Using an outdoor sensor to automatically adjust the supply water temperature to the system. Cooler system supply water temperature will operate at a higher COP. AWHP should run exceptionally long cycles to be efficient.

Will I have to add insulation to my home?
It is possible dependent on the heat loss calculation and heating curves of the appliance. You could use a larger appliance, but the appliance price and the operation cost will be higher. It usually is a good idea even if it really would work as is. It really doesn't matter how you heat your home adding insulation and tightening up your home will reduce your heating costs.

Should I remove my old cast iron radiators and install some other type of radiation?
No, cast iron radiation is good at operating at low water temperatures. The supply water temperature will have to be calculated using square foot of radiation and the room by room Manual-J heat loss calculation.

What type of heat emitter is best for AWHP applications.
While cast iron radiation is exceptionally good for an AWHP application, radiant floor in a lightweight pour is best.

Is the heating response time the same as my gas or oil boiler?
No, AWHP works on much cooler water temperature so the heat up time is slower. You will learn at times on warmer days in the fall and spring it might ne best to turn the thermostat down two or three degrees instead of off. Using Outdoor reset will assist in maintaining a lower supply water temperature and will help with this problem. As the outdoor temperature gets warmer the supply water temperature goes down. As the outdoor temperature cools off the supply water temperature goes up.

I heard AWHP's do not work in colder temperatures.
Yes, most heat pumps will work to 0f or less. As I stated before you may require back up heat to raise the supply water temperature from what the heat pump will produce to the supply water temperature required. Remember the colder it gets outside the higher the supply water temperature will be needed.

I have a hot water heating system and a seperate ducted air condition system, if my A/C fails can the AWHP do cooling in my house?
Yes, the AWHP will supply hot water for heating, domestic hot water and chilled water for air conditioning. Your existing air conditioning coil will need to be removed and a water coil installed in or near you existing fan unit. The outdoor compressor unit and interconnecting lines to the fan unit can be removed and discarded. Water lines will need to be installed from the AWHP to the new coil.

I have two a/c units. One for the upstairs and one for the basement and first floor. Can the AWHP do both?
Yes, it can do heat, domestic hot water and air conditioning. The same application as above and do multiple a/c units.