Heat Pump vs Gas Furnace Operating Cost Calculator

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Walk-through

How to Use This Calculator

5 steps

1

Enter your heating load (or home size)

On the Operating Cost tab, enter your annual heating load in MMBtu/yr if you know it — an energy audit or utility program often provides it. If not, leave it blank and enter your home's square footage; the calculator estimates the load from your size and climate zone.

2

Pick your climate zone

Choose your IECC climate zone. Colder zones apply a heat-pump efficiency (COP) penalty, because heat pumps deliver less heat per kilowatt-hour as the outdoor temperature drops — this is what can flip which system is cheaper.

3

Enter your electricity and gas prices

Type your electricity price in dollars per kWh and your natural gas price in dollars per therm — both are on a recent utility bill. These two numbers drive the result more than anything else, so use your real rates rather than a national average.

4

Set your equipment efficiency

Enter the heat pump's HSPF2 (seasonal heating efficiency; 8–11 is typical, higher for cold-climate models) and the furnace's AFUE percentage (80% for older units, up to 98% for high-efficiency condensing furnaces).

5

Read the cheaper option, monthly cost, and payback

The result card shows which system is cheaper to run and by how much per year, plus your electricity-to-gas price ratio and a dual-fuel switchover temperature. Open the Monthly Breakdown tab for the per-month chart, and the Install Payback tab to compare install costs.

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Reference

Formula & Methodology

3 formulas

Heat pump electricity use

kWh/yr = load_Btu / (HSPF2_eff x 1000)

HSPF2 is measured in Btu per watt-hour, so multiplying by 1,000 converts it to Btu per kWh. HSPF2_eff is your nameplate HSPF2 reduced by a climate-zone factor (colder zones lose efficiency). Annual electricity cost = kWh x your $/kWh.

Furnace natural gas use

therms/yr = load_Btu / (AFUE x 100,000)

One therm is 100,000 Btu, and AFUE is the fraction of fuel energy delivered as heat (95% = 0.95). Annual gas cost = therms x your $/therm. Exact unit constants: 3,412 Btu per kWh, 100,000 Btu per therm.

Crossover price ratio

break-even (elec:gas $/MMBtu) = seasonal COP / AFUE

The heat pump is cheaper when your raw electricity-to-gas price ratio (per MMBtu) is below this break-even. A typical HSPF2 ~11 heat pump against a 95% furnace breaks even near a 3.4:1 ratio; the tool computes the exact figure from your own equipment.

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YMYL

Trust, Methodology & Sources

Written by Quinn Sumner · Updated 2026-07-12 · 3 sources

Editorial accountability

Author: Quinn Sumner - Editor

Owner: Quinn Sumner - Editorial owner

Last reviewed: 2026-07-12

Last verified: 2026-07-12

Data effective: 2026-01-01

Methodology

Converts a home's annual heating load to heat-pump electricity (load Btu ÷ (HSPF2 × 1000)) and furnace natural gas (load Btu ÷ (AFUE × 100,000)) using the exact conversions 3,412 Btu/kWh and 100,000 Btu/therm, then multiplies each by user-entered energy prices. A climate-zone factor derates HSPF2 to reflect COP degradation in colder IECC zones, the annual load is distributed across months by heating-degree-day share, and the break-even electricity-to-gas price ratio is derived from the equipment's seasonal COP and AFUE. Efficiency definitions follow the DOE 2023 HSPF2/SEER2/AFUE test standards; default electricity and natural-gas prices reflect EIA 2026 U.S. residential averages.

Assumption: The same electricity and gas prices apply all year; real utility rates vary seasonally and by tier or time of use.

Assumption: Climate-zone HSPF2 multipliers, heating-degree-day monthly shares, and the square-foot load estimate are editorial approximations, not a Manual J calculation or a manufacturer performance curve.

Assumption: The dual-fuel switchover temperature uses a simplified linear COP-vs-temperature model and is an approximate guide, not a control setpoint.

Limitations & guidance

Operating-cost estimates only; they do not include maintenance, standby/pilot loads, electrical-service upgrades, ductwork, or comfort and resale considerations.

Energy prices vary widely by utility and region and change over time — use your own current rates for an accurate comparison.

The federal 25C tax credit expired December 31, 2025; only state, utility, and IRA rebates are modeled, and rebate amounts should be confirmed with your program.

Professional guidance: This calculator is for planning and estimating purposes only and is not a substitute for a load calculation, equipment selection, or quote from a licensed HVAC contractor. Verify equipment ratings, local energy prices, and available rebates before purchasing.

Primary sources

Electricity Data — Average Price of Electricity to Residential Consumers - U.S. Energy Information Administration (EIA)

Natural Gas Prices — Residential Price - U.S. Energy Information Administration (EIA)

Central Air Conditioners and Heat Pumps — Energy Conservation Standards (HSPF2 / SEER2) - U.S. Department of Energy

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Glossary

Key Terms Explained

9 terms

HSPF2 Heating Seasonal Performance Factor (2023 test standard) — the seasonal heating efficiency of a heat pump, in Btu of heat delivered per watt-hour of electricity. Higher is better; cold-climate models reach 9–11.

SEER2 Seasonal Energy Efficiency Ratio (2023 standard) — the cooling counterpart to HSPF2. It governs summer air-conditioning efficiency, not heating cost, but heat pumps carry both a SEER2 and an HSPF2 rating.

AFUE Annual Fuel Utilization Efficiency — the percentage of a furnace's fuel energy that becomes usable heat over a season. An 80% AFUE furnace wastes 20% up the flue; condensing furnaces reach 95–98%.

COP (coefficient of performance) The ratio of heat delivered to electricity consumed by a heat pump at a given moment. A COP of 3 means 3 units of heat per unit of electricity. COP falls as the outdoor temperature drops.

MMBtu One million British thermal units — a convenient unit for a home's annual heating load. A typical U.S. home uses roughly 40–100 MMBtu of heat per winter depending on size, insulation, and climate.

Therm A unit of natural gas energy equal to 100,000 Btu, and the unit most gas utilities bill in. Natural gas is priced per therm (or per hundred cubic feet, which is close to one therm).

Heating degree days (HDD) A measure of how cold a location is over time — the sum of degrees each day's average temperature falls below 65°F. More HDD means a larger heating load; the calculator uses HDD to split the annual load across months.

Dual-fuel / switchover temperature A hybrid system pairs a heat pump with a gas furnace and switches to gas below a set outdoor temperature — the switchover point. It hedges against the heat pump's falling efficiency and cost-competitiveness in deep cold.

Crossover price ratio The electricity-to-gas price ratio (per equal unit of energy) at which the two systems cost the same to run. Below it the heat pump wins; above it the furnace wins. The rule-of-thumb break-even is roughly 3.4:1.

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Scenarios

Real-World Examples

3 worked examples

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Mixed climate, high electricity price

Zone 4, gas wins

Heating load 60 MMBtu/yr Electricity $0.17/kWh Natural gas $1.30/therm HSPF2 / AFUE 8.1 / 95%

The heat pump uses about 7,800 kWh (~$1,326/yr) after the Zone 4 efficiency penalty, versus 632 therms (~$821/yr) for the furnace — so the gas furnace runs about $505/yr cheaper. At $0.17/kWh your electricity-to-gas price ratio (~3.8:1) sits above the break-even for this equipment.

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Cheaper electricity, climate flips the answer

$0.09/kWh, Zone 3 vs Zone 7

Heating load 60 MMBtu/yr Electricity $0.09/kWh Natural gas $1.30/therm HSPF2 / AFUE 8.1 / 95%

At $0.09/kWh in warm Zone 3 the heat pump wins (~$667/yr vs $821), saving about $154/yr. Move the same home to very cold Zone 7 and the COP penalty raises heat-pump use to ~$926/yr — now the furnace ($821) is cheaper. Climate alone flipped the result.

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Weighing a new install

Payback on the extra upfront cost

Heat pump install $12,000 Furnace install $6,000 State/IRA rebate $2,000 Operating savings $600/yr

The heat pump's net extra install cost is $12,000 − $6,000 − $2,000 = $4,000. If it saves $600/yr to run, the payback is $4,000 ÷ $600 ≈ 6.7 years. If the heat pump is more expensive to run, there is no operating-cost payback — the calculator flags that case.

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Deep Dive

Heat Pump vs Gas Furnace: Running the Real Numbers for 2026

3 chapters · 5 min read

Whether a heat pump beats a gas furnace on operating cost is not a national verdict — it comes down to your local electricity-to-gas price ratio and your climate. This guide explains how to run the real numbers for 2026, now that the federal 25C tax credit has expired, and when a dual-fuel setup is the smart hedge.

How the comparison works

Heating cost is just energy used times price. A heat pump's yearly electricity is your heating load divided by its HSPF2 (times 1,000, because HSPF2 is Btu per watt-hour); a furnace's yearly gas is the load divided by its AFUE times 100,000 Btu per therm. Multiply each by your rate and compare. The single biggest driver is the electricity-to-gas price ratio: a heat pump wins when your raw price ratio (per MMBtu) sits below roughly seasonal COP ÷ AFUE. For a high-efficiency setup that break-even lands near the well-known 3.4:1 rule of thumb, but the calculator computes the exact figure from your own HSPF2 and AFUE.

Why climate can flip the result

A heat pump moves heat rather than burning fuel, so its efficiency falls as the outdoor air gets colder — its COP drops. The calculator applies a climate-zone penalty to your HSPF2, so a system that beats gas in a mild zone can lose in a very cold one at the same prices. That is also why the dual-fuel switchover temperature matters: below the outdoor temperature where the heat pump's running cost crosses the furnace's, a hybrid system that hands off to gas keeps you on the cheaper source all winter. Distributing the load by heating degree days shows how lopsided that cost is toward the coldest months.

2026 incentives and install payback

The federal 25C energy-efficient home improvement credit expired on December 31, 2025, so a 2026 comparison should model only state and utility rebates and the IRA's Home Energy Rebates where available — do not assume the old 30% federal credit. On the Install Payback tab, the tool divides the heat pump's net extra install cost (after rebates) by the annual operating savings to estimate a payback period, and it is honest when there isn't one: if the heat pump costs more both to install and to run at your prices, it says so. Energy prices vary widely by utility and change over time, so re-run the numbers with your latest bill.

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Questions

Frequently Asked Questions

7 questions

Is a heat pump cheaper to run than a gas furnace?+

It depends on your electricity-to-gas price ratio and your climate. Where electricity is cheap relative to gas, or in milder climates, heat pumps usually win; where electricity is expensive or winters are severe, a gas furnace can be cheaper. Enter your own rates to see which wins for you.

What is the crossover price ratio?+

It's the electricity-to-gas price ratio (per equal unit of delivered energy) at which the two systems cost the same to run — roughly 3.4:1 in dollars per MMBtu for typical high-efficiency equipment. Below that ratio the heat pump is cheaper; above it the furnace is. The calculator computes your exact break-even.

Do heat pumps work in cold climates?+

Yes. Modern cold-climate heat pumps heat effectively well below freezing, but their efficiency (COP) drops as it gets colder, so they use more electricity per unit of heat. The calculator models this with a climate-zone penalty, which is why a colder zone can change the cheaper option.

What is HSPF2?+

HSPF2 is the Heating Seasonal Performance Factor under the 2023 test standard — a heat pump's seasonal heating efficiency in Btu delivered per watt-hour of electricity. Higher is better; standard units are around 7.5–8.5 and cold-climate models reach 9–11.

Is the federal 25C tax credit still available in 2026?+

No. The federal 25C Energy Efficient Home Improvement Credit expired on December 31, 2025. For a 2026 comparison, model only state and utility rebates and any IRA Home Energy Rebates you qualify for — this calculator's rebate field is for those state/IRA amounts, not the expired federal credit.

What is a dual-fuel (hybrid) system?+

A dual-fuel system pairs a heat pump with a gas furnace and switches to gas below a set outdoor temperature — the switchover point. It uses the heat pump when it's cheaper and efficient, and the furnace in deep cold, hedging against both price swings and efficiency loss.

Does home size matter?+

Yes, through the heating load. A larger or less-insulated home has a bigger annual heating load, which scales both systems' energy use proportionally. If you don't know your load, enter your square footage and the calculator estimates it from your size and climate zone.

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Heat Pump vs Gas Furnace Operating Cost Calculator

Your home & climate

Your energy prices

Equipment efficiency

Monthly heating cost — heat pump vs furnace

Lower heating cost

Compare

How to Use This Calculator

Enter your heating load (or home size)

Pick your climate zone

Enter your electricity and gas prices

Set your equipment efficiency

Read the cheaper option, monthly cost, and payback

Formula & Methodology

Trust, Methodology & Sources

Key Terms Explained

Real-World Examples

Mixed climate, high electricity price

Cheaper electricity, climate flips the answer

Weighing a new install

Heat Pump vs Gas Furnace: Running the Real Numbers for 2026

How the comparison works

Why climate can flip the result

2026 incentives and install payback

Frequently Asked Questions

Get a branded PDF of your results

Heat Pump vs Gas Furnace Operating Cost Calculator

Your home & climate

Your energy prices

Equipment efficiency

Monthly heating cost — heat pump vs furnace

Lower heating cost

Compare

How to Use This Calculator

Enter your heating load (or home size)

Pick your climate zone

Enter your electricity and gas prices

Set your equipment efficiency

Read the cheaper option, monthly cost, and payback

Formula & Methodology

Trust, Methodology & Sources

Key Terms Explained

Real-World Examples

Heat Pump vs Gas Furnace: Running the Real Numbers for 2026

How the comparison works

Why climate can flip the result

2026 incentives and install payback

Frequently Asked Questions

Get a branded PDF of your results

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