Heat Pump vs Gas Furnace: Which Costs Less to Heat With?

Short answer: a heat pump is cheaper to heat with where electricity is cheap and winters are mild; a gas furnace is cheaper where gas is cheap and electricity isn't. The comparison comes down to two numbers on your utility bills — your price per kWh and your price per therm — and how efficient each system is. A heat pump also cools, so the fairest comparison is often "heat pump" against "gas furnace plus central air."

Heat pump vs gas furnace: cost per million BTU

To compare fuels fairly, price the same amount of delivered heat — one million BTU:

At 18.19¢ per kWh (EIA, Jan–Aug 2026) and $1.48 per therm (EIA 2025 average). A heat pump's seasonal efficiency comes from its HSPF2 rating ÷ 3.412; ENERGY STAR's dataset puts the average certified 3-ton split heat pump at HSPF2 8.44 and a coefficient of performance of 2.05 at 5°F.

At national average prices, a high-efficiency gas furnace wins on heating fuel. But national averages hide most of the story.

Heat pump vs furnace cost by state

Cost per million BTU of delivered heat. The heat pump column uses the ENERGY STAR average seasonal efficiency; in the colder states it will run a little worse, and in Florida or Arizona a little better, so the pattern is if anything stronger than shown.

The quick rule

A heat pump at this efficiency matches a 95% furnace when your electricity price in cents per kWh ≈ 8.9 × your gas price in dollars per therm. Against an older 80% furnace the break-even rises to about 10.5 ×. With $1.48 gas, that's about 13¢ and 15.6¢ per kWh. Find both prices on your bills — divide each bill's energy charges by the kWh or therms used — and do the multiplication.

Heat pump or furnace: what else matters

Cooling. A heat pump is also your air conditioner. If your central AC is near the end of its life, you're comparing one heat pump against a furnace plus a new AC, which usually tips the purchase-price math toward the heat pump.

Cold weather. Heat pumps lose capacity and efficiency as it gets colder — the ENERGY STAR average drops to about 2 units of heat per unit of electricity at 5°F, still twice as efficient as resistance heat. Cold-climate models hold up better; in the northern states most installations include backup heat strips or keep the gas furnace as backup.

Dual fuel. Pairing a heat pump with a gas furnace lets the thermostat pick the cheaper source by outdoor temperature: the heat pump handles mild weather efficiently, the furnace takes over on the coldest days. Where gas and electricity are closely priced, that's often the lowest-cost setup.

Incentives. The federal 25C credit no longer applies to equipment installed after 2025, according to the IRS. Some states and utilities still offer heat pump rebates — check before you buy, because they can change the answer.

Example: a year of heating in three states

For a home that needs 50 million BTU of delivered heat in a winter — an illustrative figure; colder states need more — the fuel bill at each state's average prices looks like this:

In Texas the heat pump edges out even a new high-efficiency furnace and saves about $220 a year against an old 80% furnace — and it replaces the air conditioner too. In Ohio and New York, gas wins on heating fuel, so a heat pump there makes sense mainly when you'd be replacing the AC anyway, as part of a dual-fuel setup, or where a local rebate covers the difference.

Our recommendation

Run the quick rule with your own bills first. If your electricity is cheap relative to gas, or you're in the South and replacing an air conditioner anyway, buy a heat pump. If you live in the cold Midwest with cheap gas and your AC is fine, a high-efficiency furnace is the lower-cost heater — consider dual fuel if you're also replacing the AC. Whatever you choose, size it with a Manual J; our heating BTU calculator gives a quick sanity check on the size a contractor quotes. Heating with space heaters today? The space heater cost calculator shows why resistance heat is the most expensive way to stay warm.