Heat pump vs furnace: which costs less to run where you live
A heat pump usually costs less to run than a furnace in mild and moderate climates, and against propane, oil or electric resistance heat almost anywhere. A gas furnace often wins where winters are severe and natural gas is cheap compared with electricity. If you live in between, a dual fuel system uses the heat pump in mild weather and the furnace in deep cold.
The decision rule
Three questions settle most cases:
- What fuel do you have now? If you heat with electric resistance, propane or oil, a heat pump is the likely winner on running cost. If you have natural gas, the answer depends on the next two questions.
- How cold are your winters? The colder the air, the harder a heat pump works and the more backup heat it needs. In mild and moderate climates that penalty is small.
- How do your electricity and gas prices compare? A heat pump moves heat and can deliver more heat energy than the electricity it uses, according to ENERGY STAR. That advantage has to be large enough to beat your local gas price.
You also need cooling in most of the country. A heat pump is the AC, so one system covers both jobs. A furnace needs a separate AC.
Side by side
| Factor | Heat pump | Gas furnace |
|---|---|---|
| Energy source | Electricity | Natural gas or propane |
| Cooling | Built in | Needs a separate AC |
| Air temperature at the register | Warm, steady, longer cycles | Hot, shorter cycles |
| Very cold weather | Loses capacity, relies on backup heat | Output does not depend on outdoor temperature |
| Combustion safety | No flame, no flue, no carbon monoxide from the unit | Needs venting and a carbon monoxide alarm |
| Running hours | Year-round | Heating season only |
| Home requirements | Enough electrical capacity | Gas line and flue |
How to compare running costs where you live
Pull a winter gas bill and an electric bill and find the price you pay per unit of each. Then ask each contractor who quotes the job for an estimated annual heating cost for both options, using your actual rates and the efficiency ratings of the proposed equipment: HSPF2 for the heat pump and AFUE for the furnace. A contractor who does heat pumps regularly can run this comparison. Ask to see the assumptions.
Keep the purchase price in the picture too. If your AC also needs replacing, a heat pump takes the place of that purchase, which changes the math. If your furnace is failing and you are weighing options, the page on furnace replacement cost covers the furnace side.
Dual fuel: using both
A dual fuel system pairs a heat pump with a gas furnace. The heat pump heats the house in mild weather, when it runs least expensive. Below a set outdoor temperature, the thermostat switches to the furnace. ENERGY STAR notes that a heat pump can be paired with an existing furnace this way. It suits cold regions with affordable gas, and homes where the furnace is still in good shape and the AC is due for replacement.
The switchover temperature should be set from your energy prices and the heat pump's cold-weather performance. Ask the installer how they chose it.
Edge cases
- Very cold climate, no gas service. Look at cold-climate rated models and plan the backup heat carefully. The page on heat pumps in cold climates covers what to check.
- Small electrical panel. A heat pump with electric backup strips may need a panel upgrade. Get that priced in the quote.
- Leaky or undersized ducts. Heat pumps move more air at a milder temperature, so duct problems hurt comfort more.
- No ducts. Ductless mini splits are heat pumps and avoid the duct question entirely.
The heat pump overview explains each system type.
Common questions
Is a heat pump cheaper to run than a gas furnace?
It depends on your climate and your local prices for electricity and gas. In mild climates the heat pump usually wins. In very cold regions with cheap natural gas, the furnace often does. Ask installers for an annual heating cost estimate for each, based on your actual utility rates.
What is a dual fuel heat pump?
It is a heat pump paired with a gas furnace and controlled by one thermostat. The heat pump heats in mild weather and the furnace takes over when it gets very cold. You get lower running costs in mild weather and full furnace output in the coldest stretches.
Does a heat pump heat as well as a furnace?
A correctly sized heat pump holds the same room temperature. The air from the registers is milder and the system runs longer, which some people notice at first. In deep cold the system leans on backup heat, so sizing and backup setup matter more than with a furnace.
Should I replace a working furnace with a heat pump?
If the furnace is in good shape, a common route is to wait until the AC needs replacing and install a heat pump in its place, keeping the furnace as backup. Replacing a sound furnace early makes more sense if you heat with propane or oil.
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