A heat pump is usually cheaper to run than an electric furnace and often competitive with or cheaper than a gas furnace in mild and moderate climates. In very cold areas with cheap natural gas, a gas furnace often still wins on operating cost. The deciding factors are your local price of electricity versus gas and how cold your winters get. Many homes get the best of both with a dual-fuel system.
Quick answers
- Heat pumps move heat instead of making it, delivering about 2–4 units of heat per unit of electricity in typical conditions.
- Efficiency drops as outdoor temperature falls; cold-climate models keep working well below freezing.
- A heat pump also replaces your air conditioner.
- Gas furnaces deliver hotter air and have lower operating cost where gas is cheap.
- Dual fuel = heat pump for mild weather + furnace for the coldest days.
How the two systems heat
- Gas furnace: burns natural gas or propane. A 96% AFUE furnace turns 96% of the fuel’s energy into heat for your home.
- Heat pump: uses a refrigerant cycle to pull heat from outdoor air and move it inside. Its efficiency is expressed as COP (coefficient of performance). A COP of 3 means 3 units of heat for each unit of electricity.
Run the numbers for your home
Convert both to cost per million BTU of delivered heat:
- Gas: (price per therm × 10) ÷ AFUE
- Heat pump: (price per kWh × 293) ÷ COP
| Example prices | Gas furnace (96% AFUE) | Heat pump (COP 3.0) | Heat pump (COP 2.0, cold day) |
|---|---|---|---|
| Gas 1.40 USD/therm, power 0.17 USD/kWh | ~14.60 USD | ~16.60 USD | ~24.90 USD |
| Gas 1.80 USD/therm, power 0.13 USD/kWh | ~18.75 USD | ~12.70 USD | ~19.05 USD |
| Gas 1.20 USD/therm, power 0.25 USD/kWh | ~12.50 USD | ~24.40 USD | ~36.60 USD |
Plug in your own prices from your utility bills. Seasonal average COP for a good modern heat pump in a moderate climate is often around 2.5 to 3.5.
Comfort differences
- Furnace air feels hot at the vents (often 120–140°F supply air).
- Heat pump air is warm but not hot (often 90–110°F), and the system runs longer cycles. Many people find it more even; some miss the blast of hot air.
- Heat pumps defrost periodically in cold, damp weather, which is normal. See Heat Pump Defrost Mode.
Upfront cost
If you need a new AC and a new furnace at the same time, a heat pump can replace both, which narrows the price difference. If your AC is new and only the furnace failed, a new furnace is usually cheaper upfront. Compare: Heat Pump Installation Cost and Furnace Replacement Cost.
Note: the federal 25C tax credit for heat pumps ended for systems placed in service after December 31, 2025. See Heat Pump Tax Credit 2026: What Ended and What Still Exists.
Climate guide
| Climate | Typical best choice |
|---|---|
| Warm (South, Southwest) | Heat pump |
| Moderate (mid-Atlantic, Southeast, Pacific) | Heat pump or dual fuel |
| Cold (Midwest, Northeast) | Cold-climate heat pump, dual fuel, or high-efficiency gas furnace |
| Very cold with cheap gas | Gas furnace or dual fuel |
| No gas available | Heat pump (instead of electric resistance or propane) |
Dual fuel: the hybrid option
A dual-fuel system pairs a heat pump with a gas furnace. The thermostat uses the heat pump until the outdoor temperature drops below a set balance point (often 25–40°F), then switches to gas. It’s a good choice when you want low summer and shoulder-season costs but don’t want to rely on electric backup heat during cold snaps.
Frequently asked questions
Do heat pumps work below freezing?
Yes. Standard models lose capacity in deep cold; cold-climate models are designed to keep heating well below 0°F. Details: Do Heat Pumps Work in Cold Weather?
Is a heat pump more expensive to maintain?
It runs year-round, so it wears faster than an AC alone. Annual maintenance is similar to an AC tune-up.
Can I add a heat pump to my existing furnace?
Often yes, as a dual-fuel setup, if the furnace and ductwork are compatible.