Heat Pump vs Gas Furnace Running Cost
Heat pumps are usually cheaper to run, but not always — it depends entirely on the ratio between your electricity and gas prices. This works out exactly where your break-even sits.
Why this comparison is hard
The two systems are rated on incompatible scales, and sold in different units. A furnace burns gas billed in therms. A heat pump moves heat using electricity billed in kWh. Comparing headline efficiency numbers tells you nothing useful.
The only fair comparison is cost for the same delivered heat, which is what this calculator does:
heat pump kWh = BTU ÷ HSPF ÷ 1,000
furnace therms = BTU ÷ AFUE ÷ 100,000
Why a heat pump can beat 100% efficiency
A furnace at 95% AFUE converts 95% of the fuel's energy into heat. It cannot exceed 100% — you cannot get more energy out than you put in.
A heat pump does not create heat, it moves it from outside air into your home. One unit of electricity can move three or four units of heat. Effective efficiency of 300–400% is normal. That is how it can win even when electricity costs three to four times as much per unit of energy.
The break-even price is the real answer
Rather than a single yes or no, the calculator gives you the electricity price at which the two systems cost the same. That is more useful, because it tells you how much margin you have if rates change.
At 60 MMBTU of annual heat, HSPF 9.5, a 95% furnace and gas at $1.55/therm, the break-even lands near 15.6¢/kWh. At the US average of 17.5¢, gas is marginally cheaper — which surprises people who assume heat pumps always win.
| Electricity | Gas | Heat pump | Furnace | Winner |
|---|---|---|---|---|
| $0.10 | $1.55 | $632 | $979 | Heat pump |
| $0.1745 | $1.55 | $1,102 | $979 | Furnace |
| $0.1745 | $2.50 | $1,102 | $1,579 | Heat pump |
| $0.30 | $1.55 | $1,895 | $979 | Furnace, clearly |
60 MMBTU season, HSPF 9.5 heat pump, 95% AFUE furnace.
The honest summary: heat pumps win where electricity is cheap relative to gas, and lose where it is expensive. In much of the US at average rates the two are close enough that installation cost, cooling needs and incentives should decide it — not running cost.
What tips the balance
- Cooling. A heat pump is also an air conditioner. If you need cooling anyway, compare it against furnace plus AC — that often changes the verdict entirely.
- No gas connection. Against electric resistance heat or oil, a heat pump wins overwhelmingly. The comparison here only applies where you have gas.
- Backup heat. If your heat pump falls back on resistance heat in cold snaps, real costs rise sharply above this model.
- Incentives. Federal and state programmes can cut heat pump installation cost substantially.
Estimating your heat demand
If you do not know your MMBTU, work backwards from last winter's gas bills: total therms used for heating ÷ 10 ≈ MMBTU of delivered heat at 100% efficiency. Multiply by your furnace's AFUE for actual delivered heat. Rough guides: small well-insulated home 30–45, average home 50–70, large or draughty home 80–120.
Assumptions
- Seasonal averages — real performance varies with outdoor temperature
- Excludes backup resistance heat, which can materially raise heat pump costs
- Excludes installation cost, maintenance and equipment life
Common questions
What is HSPF and how does it compare to AFUE?
They measure different things, which is why comparison is confusing. HSPF is BTUs of heat per watt-hour of electricity over a season — a modern heat pump rates 9–13. AFUE is the percentage of fuel energy a furnace delivers as heat, typically 80–98%. A heat pump can exceed 100% efficiency because it moves existing heat rather than creating it, which is why it can win despite electricity costing more per unit of energy.
Do heat pumps stop working in cold weather?
Modern cold-climate models work down to around -13°F, though efficiency falls as temperature drops. Older units lose effectiveness below roughly 25–30°F and fall back on resistance backup heat, which is very expensive to run. If you are in a genuinely cold climate, the cold-climate rating matters far more than the headline HSPF.
Why does my heat pump cost more than my old furnace?
Almost always because backup resistance heat is running. Auxiliary heat is straight electric resistance at roughly 100% efficiency — it can cost three to four times what the heat pump costs. Common causes are an undersized unit, a thermostat set to recover temperature too aggressively, or genuinely severe cold. Check whether your thermostat shows 'aux' or 'emergency' heat running.
Is the break-even price the whole story?
For running cost, largely yes — but installation differs too. A heat pump typically costs $4,000–8,000 more installed than a furnace, though it also provides cooling, which offsets an air conditioner you would otherwise buy. Federal and state incentives can close much of that gap.