We model decreasing heat pump capacity and efficiency as the outside air temperature declines. Yes, heat pumps do lose capacity and efficiency the colder it gets, but they can still provide heat even when it's very cold out (there's heat energy in the air until absolute zero, or -273, after all!). You can see that declining efficiency if you expand the "Step 2: Choosing your ideal heat pump" section. We'll add a graph of capacity relative to outside air temperature as well.
Backup heat is still often necessary for many homes in cold climates, but it's necessary a lot less often than you might think. Note that in the results you'll see for the site, backup heat is included if necessary for single-zone centrally ducted heat pumps, but not for any other ducting types.