Heat pump vs gas furnace in the USA: cost to run

Against these a heat pump usually wins. At last winter's prices it costs less to run than a new propane furnace in 30 of the 38 states with a propane price, less than a new oil furnace in 13 of the 21 with an oil price, and less than an electric furnace or baseboard everywhere.

Propane furnace

Heat that costs $100 from a new propane furnace costs $72–88 from a typical heat pump at US prices: a heat pump beats propane if it delivers 1.8 units of heat per unit of electricity. The average US home that heats with propane burns about 390 gallons a year (EIA's 2020 survey); on a new furnace that heat would cost about $830 at last winter's price, on a heat pump $595–726. About the same in Illinois, Iowa, Maine, Massachusetts, Michigan, New York, Rhode Island and Wisconsin.

Oil furnace

Heat that costs $100 from a new oil furnace costs $63–76 from a typical heat pump at US prices; the average oil-heated home (422 gallons a year) would pay about $1,558 on a new furnace and $975–1,190 on a heat pump. Not everywhere: in Maine, Massachusetts and Rhode Island the oil furnace is the cheaper one, and in Connecticut, Michigan, New Hampshire, New York and Vermont the two cost about the same; electricity there cost 20.00 to 30.77¢ a kWh last winter.

Electric furnace or baseboard

A heat pump always wins here, in every state, because both run on the same electricity: an electric furnace turns each unit into one unit of heat, a typical heat pump into 2.0–2.5. For every $100 of electricity an electric furnace or baseboard heater uses, a heat pump uses $40–49 for the same heat.

With gas at $1.50 a therm, a typical new heat pump is cheaper than a new gas furnace only where electricity costs under about 11¢ a kWh, and about the same up to 13¢.

Find your price per kWh down the side and your price per therm across; both are on your bills. The cell is how many units of heat a heat pump must deliver per unit of electricity to tie a new gas furnace. If you will keep gas, use the per-therm line of your gas bill without the monthly charge.

An average gas-heated US home burns about 449 therms a year for heating (EIA's 2020 survey). At last winter's prices a new gas furnace would make that heat for about $528 a year, a typical new heat pump for $748–913. Spread over the 5 winter months, November to March, that is about $106 a month on gas and $150–183 on the heat pump (some heating falls in October and April, so the real winter months are a little lower).

Your own bills give a closer answer: add up the therms of last winter's bills, or of a year, and follow the three lines below with your furnace's efficiency (on its label; 80% if you do not know) and your two prices.

Yes, with less to give. At 5°F a typical certified ducted heat pump still delivers 2.0 units of heat per unit of electricity, against 2.5 over its rating season. What drops more is how much heat it can make: a standard model keeps 52% of its 47°F heating capacity at 5°F, a cold-climate model 77%. Cold-climate models run harder for that extra heat, so their efficiency at 5°F is about the same (2.0 against 2.1).

How often that matters depends on the state. Over the last 10 winters, days averaging below 5°F carried this share of the heating need: North Dakota 18%, Minnesota 15%, South Dakota 9%, Iowa 7%; North Dakota saw 23 such days a winter. In 32 of the 48 states with NOAA figures the share is 1% or less.

Where it is large, choose a cold-climate model sized for the coldest days, or keep the furnace for them (dual fuel, below). When a heat pump cannot keep up it switches on electric backup strips, which give one unit of heat per unit of electricity: in a field study of 13 homes by the National Renewable Energy Laboratory, backup heat cut the season's efficiency by more than 30% in two of them.

The same study measured how efficient the heat pumps were over a whole winter: 2.5 on average, from 1.7 to 3.5, in Washington and Montana in 2021–22 (the compressor alone, dry climates). That is close to the 2.5 certified models are rated at, so the rated figure, the cheaper end of the ranges on this page, is a fair guess for an ordinary winter; in Minnesota-like cold plan on the dearer end.

Worth it mainly when the air conditioner needs replacing anyway. In 49 of the 50 states and DC gas stays the cheaper heat on all but mild days, so the heat pump does the cooling, the mild days of spring and autumn, and little else.

The rule for running one: let the heat pump heat while it delivers more than your state's switch-over figure, and the furnace below it. With gas kept, the monthly charge is paid anyway, so the figure is the break-even at what one more therm costs: 4.4 for the US, above the 2.5 a typical heat pump is rated at over a season.

The outdoor temperature at which your unit falls to your switch-over figure is in its performance data. Ask the installer to set the changeover there, rather than at a default that brings the backup on early.

Each state's switch-over figure is in the table below, column "Keeping gas"; it uses our estimate of what one more therm costs (36 months to Jul 2026), or the winter average where no estimate holds (Arkansas, California, Hawaii, Massachusetts, Nevada, New Hampshire, New Mexico, Rhode Island and Utah).

Compare a heat pump with a furnace and an air conditioner, not with a furnace alone: a heat pump is the air conditioner too, run in reverse in winter. In summer it cools the way an AC does, so for the same cooling rating (SEER2) it costs the same to run.

No public source has installation prices, so this page gives none. Ask for both quotes on the same ducts and the same capacity; the heat pump's heating capacity at 17°F and 5°F, which its ENERGY STAR listing gives; whether backup heat strips and any electrical work are included; and, for dual fuel, the changeover temperature.

Where a heat pump saves money, as against propane or oil, set the extra price against the saving a year. The average US home that heats with propane would save $104–236 a year at last winter's prices, so an extra $2,000 comes back in 8 to 19 years.

Look outside in winter. A heat pump's outdoor unit runs while the house is being heated; an air conditioner's stands still until summer. Inside, a gas furnace has a flue pipe and a gas line with a shut-off valve going into its cabinet; a heat pump's indoor part, the air handler, has neither. A thermostat with an "Emergency heat" or "Aux heat" setting usually runs a heat pump.

In a power cut both stop. A heat pump runs on electricity, and a gas furnace needs it too, for its blower and its controls; federal rules even set the efficiency of furnace fans.

From 18 Dec 2028 a new gas furnace must reach 95%, so the basic 80% model leaves the market; the 3,704 certified gas furnaces on this page are at 95 to 99% already. A new ducted heat pump must be rated at least HSPF2 7.5, 2.2 units of heat per unit of electricity over a season; the typical certified one is at 8.5, 2.5.

Prices are last winter's, Nov 2025–Mar 2026, because that is when a furnace runs: electricity is what households paid divided by what they bought; gas is the average price weighted by the volume sold each month, monthly charges included. A state with a withheld month uses the winter before. Propane and heating oil are the average of EIA's weekly prices, Oct 2025–Mar 2026. The twelve-month prices the other pages use are on how the prices are calculated.

The heat pump is the median of the 266,360 ENERGY STAR certified ducted combinations of an outdoor and an indoor unit (133,965 standard, 132,393 cold-climate, the rest without the flag): HSPF2 8.5, which is 2.49 units of heat per unit of electricity over the federal test's season (HSPF2 ÷ 3.412), and 2.04 at 5°F (8 listings with an impossible 5°F figure left out). The furnaces are the medians of the certified models: 96% for gas (3,704 models), 96% for propane, 87% for oil (29); the older gas furnace is the federal minimum, 80%. A state is "about the same" when its break-even, to one decimal, lies between the heat pump's two efficiencies.