The cost to replace a furnace with a heat pump is usually two to three times the price of a new furnace, and most of the gap is not the heat pump itself. Quotes also cover wiring, a new indoor unit, sometimes a bigger electrical panel or new ducts, and the jobs that come with taking gas out of the picture.
This guide breaks a furnace to heat pump conversion into its line items, with a named price source for each (see how we research costs), so you can read a quote line by line and spot what is missing. If you are still deciding whether to switch at all, our 15-year heat pump vs furnace comparison covers running costs.
To replace a furnace with a heat pump in a ducted home, expect to pay about $14,000 to $16,500 before rebates. That is the range California contractors quoted for a 3- or 4-ton system in a 2024 survey, against about $6,000 to replace the furnace like for like. EnergySage’s March 2026 national average for an air-source heat pump is $15,393. A panel upgrade, new ducts or a chimney liner can each add $1,300 to $5,600. Keeping the furnace as backup (dual fuel) averages about $9,500.
Furnace to heat pump, 3-ton
$14,909
Average contractor quote (TECH Clean California, Feb 2024)
New furnace, like for like
$5,951
Same survey, same house
Panels already over 150 amps
50–60%
Share of US homes (NREL and Berkeley Lab, 2024)
In this guide
Cost to replace a furnace with a heat pump
The most detailed price data for this exact job comes from TECH Clean California’s cost study (February 2024). It asked 64 contractors to price the same 1,700 sq ft single-story home three ways: a new gas furnace, or a furnace to heat pump conversion with a 3-ton or 4-ton system. The heat pump quotes averaged $14,909 and $15,555. The like-for-like furnace averaged $5,951. That makes the survey the best single benchmark for the cost to replace a furnace with a heat pump.
National cost guides land in a similar place once you look at the same kind of job:
| Source and scope | Typical cost |
|---|---|
| Gas furnace to ducted heat pump, 3-ton (TECH Clean California) | $14,909 |
| Gas furnace to ducted heat pump, 4-ton (TECH Clean California) | $15,555 |
| Air-source heat pump, national average (EnergySage) | $15,393 |
| Ducted heat pump, national average (EnergySage) | $14,529 |
| Heat pump, homeowner survey average (This Old House) | $10,575 |
| Like-for-like gas furnace (TECH Clean California) | $5,951 |
Lower averages, such as Fixr’s $8,350 for a heat pump (January 2026), are not specific to a furnace to heat pump conversion, so they may leave out the wiring and gas work it adds. Our heat pump installation cost guide covers prices by system type, size and state.
What a furnace to heat pump conversion includes
In the TECH survey, every heat pump quote covered the same core scope:
- Disconnecting, removing and disposing of the old furnace.
- Installing the outdoor heat pump and a matching indoor air handler or coil on the existing ducts.
- Running a new 240-volt circuit and an outdoor disconnect switch for the heat pump.
- Refrigerant lines, condensate drain, thermostat, permits and start-up.
Equipment made up about 55% of the 3-ton price and labor about a third, according to the same study. Quotes rose to an average of $16,437 when the HVAC contractor hired an electrician, against $13,904 when it did the wiring itself. That one detail is worth asking about when you compare a furnace to heat pump conversion quote with another.
Real installations show the same gap between a new furnace and a furnace to heat pump conversion. A Berkeley Lab review of 642 heat pump installations found a median cost of $8,027, against $5,025 for furnaces, in 2019 dollars (Less et al., August 2021). Prices have risen since, but the heat pump premium has not gone away.
Extra costs to plan for when you replace a furnace with a heat pump
These are the items that push the cost to replace a furnace with a heat pump from about $14,000 toward $18,000 or more. Most homes need only some of them, and a good installer will tell you which before you sign.
| Item | Typical cost | Who needs it |
|---|---|---|
| Larger or new ductwork | $1,400–$5,600 | Homes with small or leaky ducts |
| Chimney liner for the water heater | $1,500–$4,000 | Gas water heater that shared the furnace flue |
| New air handler | $1,500–$3,400 | Most full switches (the furnace blower goes) |
| Panel upgrade, 100 to 200 amps | $1,300–$3,000 | Panels with no spare capacity |
| New 240-volt circuit | $250–$900 | Usually included; check the quote |
| Old furnace removal and disposal | $50–$330 | Every full switch |
| Capping the gas line | $50–$200 | Every full switch |
Electrical work: circuits, panel and backup heat
A furnace to heat pump conversion almost always adds electrical work. A gas furnace runs on an ordinary 120-volt circuit. A heat pump needs a 240-volt circuit for the outdoor unit, and the new air handler usually carries an electric heat kit (heat strips) that covers defrost cycles and the coldest hours. That kit needs its own large circuit. In one major manufacturer’s air handler specification (Goodman AMST, 2022), the breaker grows quickly with kit size:
| Heat kit size | Minimum circuit | Largest breaker |
|---|---|---|
| 4.5 kW | 27–31 amps | 30–35 amps |
| 8 kW | 42–47 amps | 45–50 amps |
| 9.6 kW | 49–56 amps | 50–60 amps |
When you replace a furnace with a heat pump, the heat kit and the outdoor unit together can push a 100-amp panel to its limit. Even so, 50% to 60% of US homes already have a panel larger than 150 amps, according to a 2024 study by NREL and Lawrence Berkeley National Laboratory in Joule. Before agreeing to a panel upgrade, ask the electrician for a load calculation; a smaller heat kit or a load-management device sometimes avoids it. Our guide to auxiliary and emergency heat explains when those strips actually run.
The gas line and meter
When you replace a furnace with a heat pump, a plumber or the HVAC installer caps the gas line, which costs $50 to $200 according to HomeGuide (December 2025). If the furnace was your only gas appliance, you can also close the gas account and stop paying its fixed monthly charge. Removing the meter or the service line is the utility’s job, and fees vary widely: Palo Alto’s municipal utility, for example, charges $6,092 to abandon a 1- to 2-inch gas service line (rate schedule G-5, January 2026). Ask your utility before you budget for it.
The water heater left behind
Many older gas water heaters share a chimney or flue with the furnace. When the furnace goes, the water heater is left venting alone into a flue sized for both, which can draft poorly and condense. Check that your furnace to heat pump conversion quote covers it. Building-performance standards treat this as an “orphaned” water heater that needs a properly sized liner (Building Performance Institute). A chimney liner typically costs $1,500 to $4,000 (HomeGuide, February 2026). If your water heater is near the end of its life, replacing it with an electric or heat pump water heater at the same time removes the problem.
Ductwork and airflow
A heat pump delivers cooler air than a furnace, so it moves more of it. Ducted heat pumps are typically designed for about 400 cubic feet per minute per ton, much more than older non-condensing furnaces, and many duct systems can only carry 2 or 3 tons, according to the NREL and Berkeley Lab study. If your ducts already handle central air, they are usually fine, but ask for an airflow check before you replace a furnace with a heat pump. If not, replacing ductwork runs $1,400 to $5,600, or $25 to $55 per linear foot (HomeGuide, December 2025).
Full switch or dual fuel?
You do not have to remove the furnace. A dual-fuel (hybrid) system adds a heat pump in place of the AC and keeps the gas furnace as backup for the coldest days. Fixr puts a hybrid installation at $7,500 to $12,000, averaging $9,500, and $2,500 to $8,000 to convert an existing system, which needs a dual-fuel thermostat wired to both (Fixr, January 2025).
- Choose dual fuel when the furnace has years left, the AC is due, gas is cheap and winters are cold.
- Choose a full switch when the furnace is failing, you heat with propane or oil, you want to drop the gas bill, or your rebate requires removing the old system.
- Watch the rebate rules: several programs pay much less, or nothing, if the furnace stays (see below).
Dual fuel costs less partly because it skips several extras of a full furnace to heat pump conversion: no gas capping, no orphaned water heater and usually no heat kit, because the furnace provides backup heat.
Rebates in 2026
Federal help has shrunk. The 25C tax credit ended for equipment placed in service after December 31, 2025, and since May 29, 2026, the federal HEEHR rebate no longer pays to switch a gas, oil or propane system to a heat pump (Department of Energy Program Notice 26-2). State and utility programs remain, and some reward a full switch over dual fuel:
| Program | Full switch | Keeping the furnace |
|---|---|---|
| Efficiency Maine, whole-home ducted | $3,000 any income; up to $9,000 low income | Not eligible (dual fuel) |
| NYS Clean Heat, Con Edison | $8,000 ($10,000 in disadvantaged communities) | $2,500 ($4,500) |
Where they apply, programs like these take thousands off the cost to replace a furnace with a heat pump, but most require a participating contractor.
See what replaced the 25C credit for how to find programs in your state.
Running costs after the switch
The cost to replace a furnace with a heat pump is only half the story. In our 15-year heat pump vs furnace model, built on September 2026 EIA prices, a heat pump came out ahead of a gas furnace with AC in warm climates, while gas stayed cheaper in mixed and cold climates. Against propane or oil, the heat pump won everywhere. Your own electricity and gas prices decide it, and that guide shows a quick break-even rule.
Nationally, air-to-air heat pumps are cost-effective without subsidies in about 59% of US households, according to the NREL and Berkeley Lab study (2024).
Should you replace your furnace with a heat pump?
| Your situation | Usually the better choice |
|---|---|
| Furnace failed, AC also old | Replace the furnace with a heat pump |
| Propane or oil heat | Full switch, or heat pump with the furnace as backup |
| Gas heat, cold climate, AC due | Dual fuel |
| Furnace failed, AC only a few years old | New furnace now, heat pump when the AC goes |
| 100-amp panel and no room for breakers | Get an electrician’s load calculation before deciding |
| Rebate requires removing the furnace | Full switch, if the numbers still work |
How to get an accurate quote
When you replace a furnace with a heat pump, quotes can differ by thousands for the same house, mostly because of what each one includes. Get at least three and ask every installer to spell out:
- A written heat-load calculation (Manual J) and the system size it supports.
- Whether the 240-volt circuit, disconnect and any panel work are included, and who does them.
- The heat kit size in kW and the breaker it needs.
- Whether the existing ducts were checked for airflow.
- What happens to the gas line and, if you have one, the gas water heater’s venting.
- Removal and disposal of the old furnace, permits and the rebate paperwork.
A furnace to heat pump conversion quote that leaves several of these blank is not cheaper; it is incomplete.
Frequently asked questions
How much does it cost to replace a furnace with a heat pump?
Usually about $14,000 to $16,500 for a ducted home before rebates, based on a 2024 survey of 64 California contractors. EnergySage’s March 2026 national average is $15,393. Extras such as a panel upgrade, new ducts or a chimney liner can add $1,300 to $5,600 each.
Is a furnace to heat pump conversion worth it?
It pays off most with propane or oil heat, in warm climates, with cheap electricity, or when the AC also needs replacing. With cheap gas in a cold climate, a gas furnace is often cheaper to run, and dual fuel is a good middle ground.
Can I keep my ductwork when I replace a furnace with a heat pump?
Usually, if the ducts already serve central air. Heat pumps move more air than furnaces, so an installer should check that the ducts can carry the new system’s airflow before you sign.
Do I need a new electrical panel for a heat pump?
Not always. Between 50% and 60% of US homes already have a panel over 150 amps. A 100-amp panel may need an upgrade, which typically costs $1,300 to $3,000. Ask for a load calculation first.
What happens to my gas line when I replace my furnace with a heat pump?
It is capped at the old furnace location, which typically costs $50 to $200. If no other gas appliances remain, you can close the gas account; meter or service removal is up to your utility and fees vary.
How much does it cost to add a heat pump and keep my furnace?
A dual-fuel system averages about $9,500 according to Fixr, with a typical range of $7,500 to $12,000. That is less than the cost to replace a furnace with a heat pump outright, but some rebate programs pay less, or nothing, when the furnace stays.
Sources
- TECH Clean California: Incremental Cost Study, Phase I Findings (February 2024)
- EnergySage: Costs and benefits of air-source heat pumps (March 2026)
- This Old House: Heat pump cost (August 2026)
- Fixr: Heat pump cost (January 2026)
- Fixr: Furnace cost (January 2026)
- Fixr: Hybrid heat pump cost (January 2025)
- HomeGuide: Air handler cost (October 2025)
- HomeGuide: Dedicated circuit cost (October 2025)
- HomeGuide: Gas line repair cost (December 2025)
- HomeGuide: Chimney liner cost (February 2026)
- HomeGuide: Ductwork replacement cost (December 2025)
- This Old House: Cost to upgrade an electrical panel (March 2026)
- Goodman: AMST air handler technical specifications (2022)
- Wilson et al., NREL and Lawrence Berkeley National Laboratory: Heat pumps for all? (Joule, 2024)
- Less et al., Lawrence Berkeley National Laboratory: The cost of decarbonization and energy upgrade retrofits for US homes (August 2021)
- Building Performance Institute: Clarifications to technical standards for the Building Analyst Professional
- City of Palo Alto Utilities: Rate schedule G-5 (January 2026)
- Efficiency Maine: Whole-home heat pump rebates (2026)
- NYS Clean Heat: Program Manual (December 2025)
- U.S. Department of Energy: Home Energy Rebates Program Notice 26-2 (effective May 29, 2026)
About this guide
Published by HomeHeatAdvisor. The cost to replace a furnace with a heat pump in this guide comes from published contractor surveys, laboratory studies, cost guides, manufacturer data and rebate program documents, checked in October 2026; each figure names its source and date. Your quotes will differ with your home, region and installer. No installer, manufacturer or utility pays to be included. Our editorial policy explains how we research, fact-check and update our guides. Spotted an error? Let us know.