Compare annual heating costs of a heat pump vs gas furnace. Calculate which heating system is cheaper for your home and climate.
Choosing between a heat pump and a gas furnace is one of the biggest HVAC decisions homeowners face. Heat pumps use electricity to move heat from outside air into your home, achieving 200–400% efficiency (COP 2–4). Gas furnaces burn natural gas at 80–96% efficiency.
The cost comparison depends on local electricity and gas prices, climate severity, and equipment efficiency. In mild to moderate climates, heat pumps are often cheaper to operate. In very cold climates with cheap natural gas, furnaces may have an edge — though modern cold-climate heat pumps are closing that gap.
This calculator compares the annual heating costs of both systems based on your specific prices, climate, and equipment specs. It helps you make an informed decision for new construction or when replacing an aging system.
This analytical approach supports both immediate cost reduction and long-term sustainability goals, helping organizations balance economic and environmental priorities in their energy management.
Energy prices vary dramatically by region. This calculator uses your specific electricity and gas rates to give an accurate cost comparison rather than relying on national averages that may not reflect your situation. Having accurate metrics readily available streamlines utility bill analysis, budget forecasting, and investment planning for energy efficiency projects and renewable energy installations.
Heat Pump Cost = Heating BTU / (COP × 3,412) × Electricity Rate Furnace Cost = Heating BTU / (AFUE × 100,000) × Gas Rate
Result: Heat pump: $815/yr vs Furnace: $750/yr
For 60M BTU annual heating: Heat pump at COP 2.8 and $0.13/kWh = 60,000,000 / (2.8 × 3,412) × 0.13 = $815. Furnace at 96% AFUE and $1.20/therm = 60,000,000 / (0.96 × 100,000) × 1.20 = $750. Gas is slightly cheaper here.
The heat pump vs furnace decision comes down to the ratio of electricity to gas prices. At the national average of $0.13/kWh and $1.20/therm, a COP 3.0 heat pump costs about the same as a 96% AFUE furnace. But regional variation is enormous — electricity in the Northwest is $0.08/kWh while the Northeast hits $0.22/kWh.
Heat pumps provide both heating and cooling, eliminating the need for a separate AC. The federal Inflation Reduction Act offers up to $2,000 in tax credits for heat pump installation. Heat pumps produce no on-site emissions, important for climate goals and indoor air quality.
Electrification of heating is accelerating due to climate policy, improving heat pump technology, and rising gas prices. Cold-climate heat pumps now perform well in nearly all US climates. Many states offer additional incentives beyond federal credits. The economics increasingly favor heat pumps as the technology improves.
It depends on local prices. When electricity is under $0.12/kWh and gas is over $1.50/therm, heat pumps are usually cheaper. At $0.15+/kWh with gas under $1.00/therm, gas is often cheaper. This calculator uses your exact rates.
The break-even point is: electricity rate = gas rate × COP × 3.412 / (AFUE × 100,000 / 100). At $1.20/therm gas, 96% AFUE, and COP 3.0: break-even = ~$0.125/kWh. Below this rate, heat pumps win.
Modern cold-climate heat pumps work efficiently down to -15°F or colder. Models from Mitsubishi, Fujitsu, and Daikin maintain 75–80% of rated capacity at 5°F. For most of the US, a heat pump alone can serve as primary heating.
Dual-fuel pairs a heat pump with a gas furnace. The heat pump heats whenever COP makes it cheaper than gas, and the furnace takes over during extreme cold. This optimizes cost but adds equipment complexity and maintenance.
Yes, and they provide excellent dehumidification during cooling mode. In heating mode, humidity isn't a concern. Heat pumps are increasingly popular in the Southeast US where they provide both efficient heating and superior cooling.
Heat pump maintenance costs are similar to AC maintenance ($100–$200/year for a tune-up). Gas furnaces also need annual service. Heat pumps eliminate the risk of carbon monoxide from combustion appliances, which is a safety benefit.