Heat pumps are very widely used here in Norway. I wouldn't class our winters as "mild" :)

Ground source heat pumps work anywhere. Also, it's common to have a heat pump paired with resistance heating for when you're pushing the bottom of the range where the heat pump is useful (somewhere between -10 and 20℉ depending on the hardware).

That has similar issues with peak load to AC in the summer but most people do not live in places which are consistently so cold that you don't have a significant amount of time where the heat pump efficiency savings are substantial. As a matter of public policy, encouraging systems which work for 90% of the population is an easy call — especially because that can pair with code changes and subsidies which work anywhere (insulation, install of ground cooling loops, efficiency improvements, etc.).

A ground source heat pump costs at least 3X a normal heat pump. The payback period might not make snese versus a furnace in most cases where extreme cold (below 10F) is common.

> A heat pump could never be used in Minnesota, people would freeze.

Heat pumps work in Alaska:

* https://www.nrel.gov/news/features/2021/even-in-frigid-tempe...

The more inhabited parts of Alaska are milder climates than MN, despite being northern they have an ocean to moderate the temperatures. Ground source heat pumps work fine in both MN and the most remote parts of Alaska - but at a much higher cost to install.

That would be an air heat pump. Water or earth-exchange heat pumps can work nearly anywhere. This article explains it well:

https://www.nordicghp.com/2017/01/heat-pump-effective-temper...