The heat pump vs furnace question is usually asked the wrong way. Most people compare running costs, but a furnace home also needs a central air conditioner, and a heat pump does both jobs. The fair test is the installed price of each setup plus what it costs to run for 15 years.
We built that comparison from public data: 2026 energy prices from the U.S. Energy Information Administration (EIA), real heating loads by climate, and current installed prices. The answer depends on your climate and your fuel, and in some homes gas still wins. If you are new to the technology, start with how a heat pump works.
In a heat pump vs furnace comparison over 15 years, a heat pump costs less than a gas furnace with central air in warm climates, about $880 less in our model. In mixed and cold climates, a gas furnace with AC comes out $1,400 to $4,500 cheaper at 2026 average prices, because gas is cheap compared with electricity. If you heat with propane or oil, a heat pump wins everywhere, by about $6,500 to $16,700. Your own gas and electricity prices can change the answer, so check the break-even rule below.
Electricity, 2026
18.2¢/kWh
US residential average (EIA, Sep 2026)
Natural gas, 2026
$1.40/therm
US residential heating-season average (EIA)
Propane or oil to heat pump
$6,500+
15-year saving in every climate (our model)
In this guide
- Heat pump vs furnace: the short version
- Heat pump vs furnace cost to install
- 15-year cost by climate
- Heat pump vs gas furnace: when gas wins
- Propane and oil homes
- Heat pump vs furnace: comfort, lifespan and upkeep
- The hybrid (dual-fuel) option
- Rebates in 2026
- Heat pump vs furnace: which should you choose?
- How we built the numbers
- Frequently asked questions
Heat pump vs furnace: the short version
A furnace burns fuel (gas, propane or oil) to make heat. A heat pump uses electricity to move heat from the outdoor air into the house, and reverses in summer to cool it. Because it moves heat rather than making it, a heat pump delivers two to three units of heat for each unit of electricity over a season. That is its big advantage, and expensive electricity is its big handicap.
| Heat pump | Gas furnace + AC | |
|---|---|---|
| What it does | Heats and cools with one system | Furnace heats, a separate AC cools |
| Typical installed cost (ducted) | About $13,000 | About $14,650 for both |
| Heating cost a year, mixed climate | $722 | $518 |
| 15-year total, mixed climate | $23,834 | $22,415 |
| Air at the vents | About 85–110°F | About 125°F |
| Fuel and venting | Electric only, no flue | Gas line, flue and CO alarm |
| Usually best for | Warm climates, propane or oil homes, cheap power | Cold climates with cheap gas |
The heat pump vs furnace cost gap is smaller than most people expect in both directions. Neither option is a runaway winner for a gas home in a mixed climate; the choice turns on local prices, the age of your AC and how much you value one system for both seasons.
Heat pump vs furnace cost to install
A fair heat pump vs furnace cost comparison has to include cooling. A furnace only heats, so most furnace homes also have a central air conditioner, and the two often wear out around the same time. Here are typical installed prices for a home with existing ductwork:
| System | Typical cost |
|---|---|
| Ducted heat pump (heats and cools) | $8,000–$18,000 |
| Gas furnace | $3,800–$10,000 |
| Central air conditioner, existing ducts | $5,500–$10,000 |
| Gas furnace + central AC | $9,300–$20,000 |
| Propane furnace | $3,700–$14,200 |
| Oil furnace | $6,700–$10,000 |
Using the middle of each range, a heat pump costs about $13,000 and a gas furnace plus AC about $14,650, so the heat pump starts roughly $1,650 ahead. That edge is thin: a basic furnace and AC at Fixr’s national averages comes to about $12,550, below the heat pump. Our heat pump installation cost guide breaks down what moves a quote up or down, and how we research costs lists the sources behind these ranges.
Good to know
If your air conditioner is only a few years old, the heat pump vs furnace comparison changes. Replacing just a furnace costs far less than a heat pump, so a new furnace usually wins on price until the AC also needs replacing. That is the best moment to look at a heat pump. Our guide to the cost to replace a furnace with a heat pump lists the extras a quote can add.
Heat pump vs furnace: 15-year cost by climate
Fifteen years is a common planning life for both systems, and long enough for running costs to outweigh most price differences. The chart shows the heat pump vs furnace cost over that life: each system’s installed price plus 15 years of heating energy at 2026 prices. Cooling costs are left out because a heat pump and a matching AC use similar electricity in summer.
| Climate | Heat pump | Gas furnace + AC | Propane furnace + AC | Oil furnace + AC |
|---|---|---|---|---|
| Warm (e.g. Gulf Coast) | $17,438 ($296/yr) | $18,320 ($245/yr) | $23,979 ($485/yr) | $26,553 ($697/yr) |
| Mixed (e.g. Mid-Atlantic) | $23,834 ($722/yr) | $22,415 ($518/yr) | $32,102 ($1,027/yr) | $38,216 ($1,474/yr) |
| Cold (e.g. Upper Midwest) | $29,906 ($1,127/yr) | $25,368 ($715/yr) | $37,960 ($1,417/yr) | $46,629 ($2,035/yr) |
Three things stand out:
- Warm climates favour the heat pump. Heating needs are small, the heat pump runs efficiently in mild weather, and its lower installed price carries it to a win of about $880.
- Gas pulls ahead as winters get longer. In a mixed climate the gas furnace with AC ends about $1,400 cheaper; in a cold climate about $4,500. A heat pump vs gas furnace in Minnesota is a different decision from one in Georgia.
- Propane and oil lose everywhere. These fuels cost two to three times as much per unit of heat as gas, which no furnace efficiency can make up.
Heat pump vs gas furnace: when gas wins
National averages hide a lot. Electricity prices differ by more than double from one state to another, and gas prices vary almost as much. What decides the heat pump vs gas furnace running cost is the ratio between your two prices, so you can check it with your own bills.
Find your price per kWh and per therm on your utility bills, including delivery charges and taxes. Then use the rule for your climate:
| Climate | Seasonal COP | Break-even electricity price | Rule of thumb |
|---|---|---|---|
| Cold | 2.3 | 11.5¢/kWh | Below 8.2 × your gas $/therm |
| Mixed | 2.6 | 13.0¢/kWh | Below 9.3 × your gas $/therm |
| Warm | 3.0 | 15.0¢/kWh | Below 10.7 × your gas $/therm |
Example: with gas at $1.40 a therm, a heat pump in a mixed climate is cheaper to run if your electricity costs less than about 13¢/kWh (9.3 × 1.40). At the 2026 national average of 18.2¢, it would need a seasonal COP of about 3.6, which only the most efficient systems reach in mild climates. That is why gas usually wins on running cost today, and why the heat pump vs gas furnace answer flips in places with cheap power, such as parts of the Pacific Northwest.
Quick check
A simple heat pump vs gas furnace check that works in most climates: if your price per kWh in cents is less than about 10 times your gas price per therm in dollars, a heat pump is likely cheaper to run. If it is more than that, a gas furnace probably is.
One more thing in a heat pump’s favour: if it lets you drop gas entirely, you also stop paying the gas utility’s fixed monthly customer charge. Check your bill for that line; our model does not count it.
Propane and oil homes: the clear case for a heat pump
For homes that heat with propane or heating oil, the heat pump vs furnace decision is much easier. At 2026 prices, propane costs about twice as much as gas per unit of heat and heating oil about two and a half times as much, while a heat pump turns each kilowatt-hour of electricity into two to three kilowatt-hours of heat.
- Against propane: a heat pump saved $6,500 in our warm-climate home, $8,300 in a mixed climate and $8,100 in a cold one over 15 years.
- Against oil: the saving was $9,100, $14,400 and $16,700.
- Fewer moving parts: no fuel deliveries, no tank to maintain or replace, and no chimney or flue to keep clear.
Cold-climate heat pumps are tested down to 5°F and keep operating below that, according to ENERGY STAR, though output and efficiency fall as it gets colder. In very cold areas many propane and oil homes keep their old furnace as backup for the coldest days, which is the hybrid setup described below. Our guide to how heat pumps perform in cold climates covers the field-test data.
Heat pump vs furnace: comfort, lifespan and upkeep
How the heat feels
The biggest everyday heat pump vs furnace difference is how the heat feels. A furnace sends out short bursts of hot air, around 125°F. A heat pump runs longer at lower temperatures, around 90–110°F, according to Energy Vanguard. That air is warmer than the room but cooler than a furnace’s, so a heat pump can feel drafty near a vent even when the house holds its temperature. Variable-speed heat pumps run almost continuously, which most owners find gives more even temperatures from room to room.
Lifespan
On lifespan, the heat pump vs furnace gap is smaller than it looks. A heat pump works all year, heating in winter and cooling in summer, so its compressor puts in more hours than a furnace that only runs in winter. A furnace home spreads those hours across two machines. In practice both setups are usually planned around 15 years or so, and the quality of the installation and upkeep matters more than the type of system.
Maintenance
Both need a yearly service, ideally a heat pump before summer and winter and a furnace before the heating season, as ENERGY STAR recommends. A heat pump needs its outdoor coil kept clear of leaves and snow; a fuel-burning furnace needs a combustion and venting check and a working carbon monoxide alarm. A heat pump removes the combustion safety risk from the house altogether.
For a fuller list of strengths and weak points, see our heat pump pros and cons.
The hybrid (dual-fuel) option
You do not have to settle the heat pump vs gas furnace question one way. A dual-fuel system pairs a heat pump with a gas furnace: the heat pump handles most of the year, and the furnace takes over when it gets cold enough that gas is cheaper or the heat pump can no longer keep up. The changeover is set at the thermostat, usually as an outdoor temperature.
Done well, a hybrid gets close to the cheapest of both in every month. It makes most sense when your AC is due for replacement but your furnace still has years left: swap the AC for a heat pump and keep the furnace as backup. The break-even rule above tells you where to set the changeover. Our guide to auxiliary and emergency heat explains how backup heat is controlled.
Rebates in 2026
The 25C federal tax credit, which paid up to $2,000 toward a heat pump, ended for equipment placed in service after December 31, 2025. Since May 29, 2026, the federal HEEHR rebate no longer pays to replace a gas, oil or propane system with a heat pump, under the Department of Energy’s Program Notice 26-2. Homes may keep fossil-fuel heating when they add a heat pump, so a dual-fuel project may still qualify; ask your state program.
Utility and state rebates are now the main help, and some are generous enough to tip a close heat pump vs furnace decision. See what replaced the 25C credit for how to find them.
Heat pump vs furnace: which should you choose?
| Your situation | Usually the better choice |
|---|---|
| Warm climate, any fuel | Heat pump |
| Propane or oil heat, any climate | Heat pump, or heat pump with the old furnace as backup |
| Gas heat, cold climate, average prices | Gas furnace + AC, or dual fuel |
| Gas heat, mixed climate | Close: check the break-even rule with your bills |
| Cheap electricity (under about 13¢/kWh) | Heat pump |
| AC is new, furnace has failed | Gas furnace now, heat pump when the AC goes |
| Furnace still good, AC has failed | Heat pump as a dual-fuel add-on |
| No ductwork | Ductless heat pump (mini-split) |
Whatever you lean toward, get two or three quotes and ask each installer for a written load calculation (Manual J). A system sized for your home matters more to comfort and cost than the choice between a heat pump and a furnace.
How we built the numbers
We wanted a heat pump vs furnace cost comparison anyone can check, so every input in the model comes from a public source:
- Energy prices: EIA Short-Term Energy Outlook, September 2026. Electricity 18.2¢/kWh (2026 residential average); natural gas $1.40/therm, propane $2.54/gallon and heating oil $4.93/gallon (heating-season averages).
- Heating loads: average space-heating use of gas-heated homes by climate region from EIA RECS 2020 (table CE5.4): 20.8, 44.0 and 60.8 million Btu a year for hot-humid, mixed-humid and cold regions. We assumed existing furnaces deliver 80% of that as heat.
- Efficiency: new gas and propane furnaces 95%, oil furnaces 85%. Heat pump seasonal COP 3.0 (warm), 2.6 (mixed) and 2.3 (cold).
- Heat pump baseline: the ENERGY STAR heat pump specification (version 6.2) requires at least 8.1 HSPF2, a seasonal COP of about 2.4. Our mixed and warm-climate figures assume a somewhat better unit; the cold figure assumes a cold-climate model.
- Installed prices: the midpoint of each Fixr range in the install table above.
- Left out: fuel price changes, rebates, maintenance, fixed gas charges, and cooling (similar for both). Everything is in 2026 dollars with no discounting.
Change any input and the gaps move, which is the point: use our numbers as a starting point and your own bills for the final answer.
Frequently asked questions
Heat pump vs gas furnace: which is cheaper to run?
Only if your electricity is cheap compared with gas. A rough rule: a heat pump is cheaper to run when your price per kWh in cents is below about 10 times your gas price per therm in dollars. At 2026 US averages (18.2¢ and $1.40), gas is cheaper to run in most mixed and cold climates.
Heat pump vs furnace: which is cheaper over 15 years?
In warm climates, yes, by about $880 in our model against a gas furnace with AC. In mixed and cold climates a gas furnace with AC was $1,400 to $4,500 cheaper. Against propane or oil, a heat pump saved $6,500 to $16,700 in every climate.
What is the heat pump vs furnace cost to install?
A ducted heat pump typically costs $8,000 to $18,000 installed. A gas furnace costs $3,800 to $10,000, and with a new central air conditioner the pair runs $9,300 to $20,000. Midpoints are about $13,000 for a heat pump and $14,650 for a furnace with AC.
Do heat pumps work in cold climates?
Yes. Cold-climate heat pumps keep producing heat well below 0°F, though their efficiency drops as it gets colder. In very cold areas many homes keep a furnace or electric backup for the coldest days.
Should I replace my furnace with a heat pump?
It usually makes most sense when you heat with propane or oil, live in a warm climate, have cheap electricity, or need to replace your air conditioner anyway. If your AC is new and you have cheap gas, a new furnace is often the cheaper choice for now.
Is a dual-fuel system worth it?
Often, in cold climates with gas service. A heat pump handles mild weather efficiently and the gas furnace takes over in deep cold, so you pay the lower running cost most of the year. It is a natural choice when the AC fails before the furnace.
Sources
- U.S. Energy Information Administration: Short-Term Energy Outlook (September 2026)
- U.S. Energy Information Administration: Residential Energy Consumption Survey 2020, table CE5.4
- Fixr: Heat pump installation cost (January 2026)
- Fixr: Furnace installation cost (January 2026)
- Fixr: Central air conditioner installation cost (August 2025)
- ENERGY STAR: Heat pump specification, version 6.2 (March 2025)
- ENERGY STAR: Heating and cooling maintenance checklist
- ENERGY STAR: Air-source heat pumps
- U.S. Department of Energy: Home Energy Rebates Program Notice 26-2 (effective May 29, 2026)
- Energy Vanguard: Is heat pump supply air too cold for heating?
About this guide
Published by HomeHeatAdvisor. The heat pump vs furnace cost model in this guide uses public EIA price and consumption data and published installed-price ranges, checked in October 2026; the method section lists every assumption. Your own prices, climate and home will give different results. 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.