Basically it's the input vs output efficiency difference of your home generator vs the big ass grid one. For each unit of input fuel (like natural gas), the gr

Basically it's the input vs output efficiency difference of your home generator vs the big ass grid one. For each unit of input fuel (like natural gas), the grid generator can get more electricity out of it than a small home gen can. It's true that you don't capture the waste heat of the home generator if you use grid power. But that's a lot of work to install and maintain too. You'd have to have a heat exchanger with the generator running in some sort of shell. You can't run the gen indoors because of exhaust gases. You also can't have it running too hot with no ventilation. So you'd have to enclose and insulate the generator outdoors, capture its heat output, heat exchange it with the home, tie it to the home thermostat, and still have a way to shunt extra heat (water heater, external exhaust, whatever) so the gen doesn't overheat. You usually can't just throttle down the generator either because they have some optimal RPM at which they run, and your heat pump depends on its output. It's just a lot of overhead for what would probably be a small improvement in efficiency (maybe not even that, if the decreased efficiency in home generation is bigger than the captured heat output). Now, at a municipal level or bigger, having to install such systems in homes, along with the natural gas infrastructure, is a much tougher thing than just running wires to each house. Many cold places outside major cities don't have reliable nature gas delivery to the home. It's a marginal improvement to a hard to fill niche, vs the simplicity of running a mini split off grid power. That can be installed in a few hours. I think a regular electric heat pump plus supplemental wood burning or kerosene stove in the home would give you simpler and more consistent results, personally, at the cost of having to breathe their exhaust fumes.