Abstract Electric heat pumps are recognized as a key technology for decarbonization and have received increasing policy support in several countries over the last few years. These devices offer a highly efficient form of electric heating and could make an important contribution to the transition to a low carbon future, especially in case of district heating systems. Within this context, this paper presents a thermo-economic optimization analysis of a 7.35 MW electric heat pump system employed for district heating purposes and using ammonia as working fluid. The implemented code gathers multiple sub-models calibrated ad-hoc from real data or manufacturers’ datasheets. The heat exchangers are simulated by considering phenomenological equations and well-known heat transfer coefficient and pressure drop prediction methods. The optimization analysis is performed at constant condensation temperature that guarantees in/out hot water temperatures of 30/62 °C and is focused on the matching between compressor and evaporator heat exchanger, by considering either a direct expansion system or a chilled water heat pump. Both the coefficient of performance (COP) and the set-up costs are considered as optimization performance indicators for the construction of the Pareto front.