Heat Pump vs Gas Furnace Calculator
Compare a heat pump against a gas furnace for your home. See your annual heating cost each way, the payback period on the extra upfront cost, and net savings over time.
A heat pump costs more to install than a gas furnace but usually less to run. This shows whether the long-term savings outweigh the higher upfront cost — for your home and your local energy prices.
Home Size
The heated living area of your home in square feet. This drives how much heating energy you need each year.
Your Climate
How cold your winters are. This sets both how much heat your home needs and how efficiently a heat pump can deliver it — colder climates need more heat and lower a heat pump's efficiency.
Real winters, not extreme (e.g. Mid-Atlantic, Pacific NW)
Electricity Rate
Your cost per kWh. Find it on your utility bill by dividing total charges by total kWh used. The US average is about $0.16/kWh.
Natural Gas Price
What you pay per therm of natural gas. Divide your total gas charges by therms used on a winter bill. The US residential average is around $1.50/therm.
Installed cost of each system
Heat Pump Installed Cost
The total quoted price to install a heat pump, after any rebates you'd get. A whole-home system typically runs about $6,000–$10,000 installed.
Gas Furnace Installed Cost
The total quoted price to install a new gas furnace — typically about $4,000–$6,000. If you'd also be buying a new air conditioner, add its cost here too, since a heat pump heats and cools and replaces both.
Gas furnace efficiency and the time horizon. Sensible defaults are used unless you change them.
Over 15 years, a heat pump costs you $3,719 more here.
−$3,719
behind over 15 yr
Won't
pay for itself
−$48
more than gas / yr
Gas is cheaper here
At your local prices, the gas furnace costs less to operate than the heat pump, and that gap isn't recovered over your time horizon. This usually points to cheap natural gas paired with a high electricity rate, or a cold climate where heat-pump efficiency drops. A heat pump may still make sense for the summer cooling it provides or to cut carbon — but on heating cost alone, gas wins in this scenario.
Estimate only. Heating demand is approximated from home size and climate, and both systems are compared on energy cost alone — not equipment lifespan, maintenance, or the value of summer cooling a heat pump also provides. Your actual costs depend on insulation, local weather, equipment efficiency, and utility rates.
💡About this calculator▼
When your furnace is on its last legs, the question isn't just "gas or electric?" — it's whether a heat pump will actually save you money or quietly cost you more every winter. The honest answer depends on three things: how much heat your home needs, what you pay for electricity, and what you pay for natural gas. Get those right and the decision stops being a guess.
This calculator compares the two head to head. Tell it your home's size, your climate, and your local energy prices, and it works out what each system costs to run for a year — then weighs that against the extra upfront cost of going with a heat pump. You'll see the payback period and the net savings over the years you plan to own the system.
It's built to be honest in both directions. In a mild climate with pricey gas, a heat pump can pull clearly ahead. In a cold climate with cheap natural gas, the gas furnace often wins on running cost — and the calculator will say so plainly, rather than nudging you toward an answer that doesn't fit your situation.
The comparison starts with one number: how much heat your home needs in a year. That's driven by your home's size and your climate — a bigger house in a colder place needs more heating energy.
From there the two systems diverge. A gas furnace burns fuel, and some of that energy goes up the flue rather than into your home — its AFUE rating captures how much actually becomes heat. A heat pump doesn't burn anything; it moves existing heat from the outdoor air into your house, which is why it can deliver more heating energy than the electricity it consumes. How much more is its coefficient of performance (COP), and that drops in colder weather because there's less heat outside to move.
The calculator converts your annual heating demand into the fuel each system needs — therms of gas for the furnace, kilowatt-hours for the heat pump — and applies your local prices to get an annual operating cost for each. The difference between those is your yearly savings (or extra cost) from choosing the heat pump.
Finally it brings in the upfront cost. You enter the installed price of each system, and the difference is the heat pump's extra upfront cost. If the heat pump saves money every year, dividing that difference by the annual savings gives the payback period, and projecting forward gives the net savings over your time horizon. If the heat pump costs more to run, there's no payback — and the calculator says that directly.
The step-by-step formulas and a worked example are below.
📐How it's calculated▼
The calculation runs in a few clean steps.
Step 1 — Annual heating demand: Heating demand (BTU/yr) = Home size (sq ft) × Climate factor
The climate factor reflects how much heat a square foot needs per year: roughly 10,000 BTU in a mild climate, 25,000 in a moderate one, and 45,000 in a cold one.
Step 2 — Gas furnace cost: Therms used = (Heating demand ÷ Furnace AFUE) ÷ 100,000 Gas annual cost = Therms × Gas price
(One therm = 100,000 BTU; dividing by AFUE accounts for furnace losses.)
Step 3 — Heat pump cost: kWh used = (Heating demand ÷ 3,412) ÷ COP Heat pump annual cost = kWh × Electricity rate
(3,412 BTU = 1 kWh; dividing by COP credits the heat the pump moves for free. COP is set by climate: about 3.2 mild, 2.8 moderate, 2.2 cold.)
Step 4 — Annual savings: Annual savings = Gas annual cost − Heat pump annual cost
Step 5 — Extra upfront cost, payback, and net savings: Extra upfront cost = Heat pump installed cost − Gas furnace installed cost Payback (years) = Extra upfront cost ÷ Annual savings Net savings = (Annual savings × Time horizon) − Extra upfront cost
Example: 2,000 sq ft, moderate climate, $0.16/kWh, $1.50/therm, $7,000 heat pump vs. $4,000 furnace, 0.95 AFUE, 15-year horizon
→ Heating demand: 2,000 × 25,000 = 50,000,000 BTU/yr
→ Gas: (50,000,000 ÷ 0.95) ÷ 100,000 ≈ 526 therms × $1.50 ≈ $789/yr
→ Heat pump: (50,000,000 ÷ 3,412) ÷ 2.8 ≈ 5,234 kWh × $0.16 ≈ $837/yr
→ Annual savings: $789 − $837 ≈ −$48 (the gas furnace is cheaper to run here)
→ Extra upfront cost: $7,000 − $4,000 = $3,000. With negative annual savings there's no payback — at these prices, gas wins on running cost.
📎Source: U.S. Department of Energy — Energy Saver: Heat Pump Systems
🔍Finding your inputs▼
Home Size: The heated living area in square feet — the space your furnace or heat pump actually conditions. Don't count an unheated basement or garage. This scales your whole heating demand, so a rough but honest number is fine.
Your Climate: Pick the band that matches your winters. *Mild* fits places with short, cool winters (much of the Southeast, the Pacific coast). *Moderate* fits real but not extreme winters (the Mid-Atlantic, the Pacific Northwest). *Cold* fits long, hard winters (the Upper Midwest, the Northeast). This one choice does double duty: it sets how much heat your home needs and how efficiently a heat pump can run, since cold air gives a heat pump less to work with.
Electricity Rate: What you pay per kilowatt-hour. The most accurate figure comes from dividing your total monthly electric charges by the kWh used, both on your bill. The US average is about $0.16/kWh, but it ranges from around $0.11 in cheap-power states to over $0.30 in California and Hawaii. A heat pump's case is strongest where electricity is cheap.
Natural Gas Price: What you pay per therm. Divide your total gas charges by the therms used on a winter bill, including delivery and fixed fees for the truest cost. The US residential average is around $1.50/therm, but it's higher in the Northeast and California and lower in gas-producing regions. Cheap gas is the heat pump's toughest competition.
Heat Pump Installed Cost: The total quoted price to install a heat pump, after subtracting any state, local, or utility rebates you'd qualify for. Note: the $2,000 federal Energy Efficient Home Improvement Credit (Section 25C) expired on December 31, 2025, so don't deduct a federal credit for new 2026 installations. A whole-home ducted system typically runs about $6,000–$10,000 installed before rebates, though it varies with size, brand, and your region. Use a real contractor quote if you have one.
Gas Furnace Installed Cost: The total quoted price to install a new gas furnace — usually about $4,000–$6,000. Here's the key step that makes the comparison fair: if you'd also be buying a new air conditioner, add its cost here too. A heat pump both heats and cools, so it replaces a furnace *and* an AC. Folding the AC into this side is what reveals the heat pump's true cost advantage at replacement time — and the calculator simply takes the difference between the two installed prices as the heat pump's extra upfront cost (which can even be negative if the heat pump is the cheaper install).
Gas Furnace Efficiency / AFUE (advanced): How much of the gas your furnace turns into usable heat. A basic new furnace is about 0.80 (80%); a high-efficiency condensing model is 0.95–0.98. A more efficient furnace burns less gas, which makes the gas option look better in the comparison.
Time Horizon (advanced): How many years to total the savings over — usually how long you expect to keep the system. Heat pumps typically last around 15 years. A longer horizon gives annual savings more time to overcome the gap between the two install prices.
⚠️Special situations▼
I'm replacing my air conditioner at the same time as my furnace
This is the scenario where heat pumps look best, so it's worth getting the upfront cost right. A heat pump both heats and cools, so it replaces your furnace AND your air conditioner with one piece of equipment. If you were about to buy a new AC anyway, add that AC's price to the Gas Furnace Installed Cost field — that's what you'd really spend on the gas route. Because the calculator compares the two installed prices, doing this shrinks the heat pump's extra cost (sometimes to nothing) and can shorten the payback dramatically.
I'm replacing electric resistance heat or propane, not natural gas
This calculator compares against a natural gas furnace, which is the cheapest common fuel — the toughest competition for a heat pump. If you currently heat with electric baseboard/resistance heat or with propane or heating oil, a heat pump almost always wins by a wide margin, because it delivers two to three times more heat per unit of energy than resistance heat, and propane and oil are far pricier than gas. Treat this tool's gas result as a conservative, worst-case comparison; against those other fuels your savings will be larger.
I live somewhere with very cold winters
In a cold climate a heat pump has to work harder, and its efficiency drops just when you need the most heat — which is why the cold setting uses a lower COP. Modern cold-climate heat pumps perform much better than older models and can heat well below freezing, but their running cost still rises in deep cold, and many systems lean on backup electric resistance heat on the coldest days, which is expensive. If gas is cheap where you are, the calculator may well show gas winning on running cost. That's the honest result — the case for a heat pump in cold, cheap-gas regions often rests on cooling and carbon rather than heating bills.
There are rebates available for a heat pump
State, local, and utility incentives can still knock thousands off a heat pump's price. Since the Heat Pump Installed Cost field is meant to be the price after rebates, subtract everything you qualify for before entering it. Even without the federal tax credit (which expired at the end of 2025), a strong utility rebate can sometimes erase the entire gap over a gas furnace — in which case even modest annual savings pay back almost immediately. Check current programs for your area, since they change from year to year.
I care about more than just the heating bill
This calculator compares energy cost only. A few things it doesn't put a dollar value on can still matter: a heat pump provides air conditioning in summer (often letting you skip a separate AC), it produces no on-site combustion or carbon-monoxide risk, and it cuts your home's carbon emissions where the grid is reasonably clean. On the other side, gas furnaces can deliver hotter air on bitter days and may have lower upfront cost. Use the operating-cost result as the financial backbone of your decision, then weigh these factors on top.
❓Common questions▼
Is a heat pump cheaper than a gas furnace?
It depends on your local energy prices and climate. A heat pump is far more efficient — it moves two to three units of heat for every unit of electricity — but electricity is often pricier per unit of energy than natural gas. Where electricity is cheap, gas is expensive, or the climate is mild, a heat pump usually costs less to run. Where natural gas is cheap and winters are cold, a gas furnace often wins on running cost. This calculator works out which applies to you using your own numbers.
How long does it take for a heat pump to pay for itself?
If a heat pump saves money each year, the payback period is its extra upfront cost divided by those annual savings — anywhere from a couple of years to well over a decade. The single biggest factor is the gap between the two install prices: a standalone heat pump that costs $4,000 more than a furnace pays back slowly, but if you're replacing your air conditioner at the same time, that gap might be just $1,500 and payback can be a few years. Incentives shorten it further. Enter your figures above to see your specific payback.
Do heat pumps work in cold climates?
Yes. Modern cold-climate heat pumps can heat effectively well below freezing, far better than older units. But efficiency does fall as temperatures drop, so running costs rise on the coldest days and many systems use backup electric heat in extreme cold. That's why this calculator lowers the assumed efficiency for cold climates. They absolutely work — the question this tool answers is whether they're cheaper to run than gas where you live, which in cold regions with cheap gas isn't guaranteed.
What is AFUE and COP, and why do they matter?
AFUE (Annual Fuel Utilization Efficiency) is the share of a furnace's gas that becomes usable heat — 95% AFUE means 5% is lost up the flue. COP (Coefficient of Performance) is the heat a heat pump delivers per unit of electricity it uses; a COP of 3 means three units of heat for one of electricity. They matter because they decide how much fuel each system actually needs to heat your home, which is what turns your energy prices into an annual cost. The calculator uses both to make a fair comparison.
Should I switch to a heat pump if my gas furnace still works?
Usually the most cost-effective time to switch is when your furnace (and ideally your air conditioner) is due for replacement anyway, because then you're only paying the difference in equipment cost rather than scrapping a working system. Replacing a furnace that has years of life left means absorbing the full cost of the heat pump, which lengthens payback considerably. If your furnace works fine and gas is cheap where you live, the numbers often favor waiting. Run your own figures above, both with a full price gap and a replacement-time price gap, to see the difference.