The question behind the comparison
Whether a heat pump costs less to run than a gas furnace is arithmetic, not opinion. A furnace turns gas into heat at a fixed efficiency. A heat pump moves heat from outdoor air into your home, delivering more than one unit of heat for every unit of electricity it uses: at the calculator’s default rating of HSPF2 7.8, about 7.8 ÷ 3.412 ≈ 2.3 over a season. Which one is cheaper depends on those two efficiencies and on what your utilities charge for a therm of gas and a kWh of electricity.
This calculator uses your own utility’s rates instead of national averages, which hide how widely the electricity-to-gas price ratio varies between states. That ratio decides the outcome.
How this calculator works
You choose your electric utility and rate plan, then enter:
- Gas used for heating per year (therms). Your own bills are the most reliable source, because they reflect your actual house, insulation and thermostat habits. The default is your state’s average residential gas use per customer (EIA) × the share of home gas that goes to space heating in NREL’s ResStock model.
- Gas price ($/therm), pre-filled with your state’s residential average over the last 12 months from EIA. That average includes the utility’s fixed charges spread over the therms; overwrite it from your bill if you prefer.
- Furnace AFUE, the share of the gas’s energy that becomes heat in the house. The default is 80%, the federal minimum for gas furnaces; furnaces made from December 18, 2028 must reach 95% (10 CFR 430.32(e)).
- Heat pump HSPF2, a seasonal heating efficiency rating from the unit’s EnergyGuide label. The default is 7.8, the ENERGY STAR minimum; the federal minimum is 7.5, and ENERGY STAR cold-climate ducted units are 8.1 or more. The calculator converts it to a seasonal coefficient of performance (COP) using COP = HSPF2 ÷ 3.412.
The math is short. Delivered heat equals therms × AFUE. That heat is converted to kWh (1 therm = 29.307 kWh) and divided by the seasonal COP to get the heat pump’s electricity use. Gas cost is therms × gas price. The heat pump’s kWh are placed in the months and hours that ResStock’s gas-heated homes in your state need heat, added to a typical home’s use, and priced on your plan: the heat pump cost is the year’s bill with them minus the bill without them.
A worked example
Say your furnace used 600 therms last winter at 80% AFUE. That is 480 therms of delivered heat, or about 14,070 kWh. A heat pump with an HSPF2 of 8.5 has a seasonal COP of about 2.49, so it would use roughly 5,650 kWh to deliver the same heat.
At $1.40 per therm, the gas cost is 600 × $1.40 = $840. At a flat $0.16 per kWh, the heat pump cost is about $904. At $0.13 per kWh, it drops to about $735. A few cents per kWh flips the answer. In the calculator, the electricity price is not a single number: it is the average cost of those kWh on your plan, in the winter months and hours they are used.
Don’t forget the fixed gas charge
Many gas bills include a fixed monthly customer charge that you pay no matter how much gas you use. If you install a heat pump but keep a gas water heater, range or dryer, that charge stays. You only avoid it by disconnecting from gas entirely. The default gas price is an all-in average that spreads fixed charges over the therms, so if you will keep a gas connection, it overstates what you save per therm; entering your bill’s per-therm energy price instead gives a closer answer. If you plan to fully electrify, the all-in average is the better fit.
The break-even price ratio
You can reduce the whole comparison to one number. A heat pump is cheaper to run when:
electricity price ($/kWh) < gas price ($/therm) × COP ÷ (29.307 × AFUE)
Here is what that looks like at $1.40 per therm:
| Furnace AFUE | Heat pump seasonal COP | Break-even electricity price |
|---|---|---|
| 80% | 2.5 | about $0.149/kWh |
| 95% | 2.5 | about $0.126/kWh |
| 80% | 3.0 | about $0.179/kWh |
| 95% | 3.0 | about $0.151/kWh |
If your electricity costs less than the break-even price, the heat pump wins on operating cost. Beating a new condensing furnace takes cheaper power or a more efficient heat pump.
Why COP changes with the weather
A heat pump’s COP is not constant. It is highest in mild weather and falls as the outdoor temperature drops, because the unit has to lift heat across a larger temperature difference. HSPF2 is a seasonal average built from a standard temperature profile, and the calculator applies that one seasonal COP to every hour. In a colder climate than the rating assumes, your real seasonal COP will be lower. If you live somewhere with long, hard winters, enter a slightly lower HSPF2 than the nameplate value to be conservative.
Cold-climate heat pumps and backup heat
Cold-climate heat pumps use variable-speed compressors and refrigerant circuits designed to keep useful capacity and efficiency well below freezing. Most systems still include backup electric resistance strips, which turn each kWh into one kWh of heat, a COP of 1. A few hours of resistance heat on the coldest nights is normal. A system that leans on the strips for weeks at a time will cost far more than the calculator predicts, and that usually points to an undersized heat pump or a poorly set thermostat.
Sizing and ductwork
A heat pump sized from a room-by-room load calculation (Manual J), not a rule of thumb or the old furnace’s rating, keeps backup heat to a minimum. Existing ducts often work, but heat pumps deliver air at lower temperatures than a furnace, so undersized or leaky ducts can cause comfort complaints. Where ducts are poor or absent, ductless mini-splits avoid the issue.
Rate plans that change the answer
Your electric tariff matters beyond its average price. Some utilities use tiered rates, where each kWh above a monthly baseline costs more. A heat pump can push winter usage into the upper tiers, and the calculator prices it that way, on top of a typical home’s use. Some utilities raise the winter baseline allowance for electrically heated homes; the calculator uses the baseline recorded for the plan you pick. Others offer heat pump or all-electric rate plans with lower winter prices. The calculator lets you switch plans and compare.
The cooling bonus and incentives
A heat pump is also an air conditioner. If your central AC is near the end of its life, one heat pump replaces two pieces of equipment, and modern units are usually more efficient at cooling than an older AC. That value isn’t in a heating-cost comparison, but it matters when buying.
On incentives: according to the IRS, the federal 25C Energy Efficient Home Improvement Credit, which covered qualifying heat pumps, is not available for equipment placed in service after December 31, 2025. State programs and utility rebates may still be available, so check before you buy.
Frequently asked questions
How do I find my heating therms if my gas also heats water?
Look at a summer gas bill, when the furnace is off; that month’s therms are your cooking and hot water. Multiply it by 12 and subtract the result from a full year’s therms. What’s left is roughly your space-heating gas.
What HSPF2 should I enter?
Use the rating on the specific model you’re considering. The federal minimum for split-system heat pumps is 7.5 HSPF2, the ENERGY STAR minimum is 7.8 (the calculator’s default), and ENERGY STAR cold-climate ducted units are 8.1 or more. In very cold regions, entering a slightly lower value gives a more realistic estimate.
Is a heat pump always cheaper than gas?
No. It depends on the ratio of your electricity price to your gas price, and on the efficiency of both machines. Where electricity is expensive and gas is cheap, a high-efficiency furnace can still cost less to run.
Can I keep my furnace as backup?
Yes. A dual-fuel setup uses the heat pump most of the time and switches to gas below a set outdoor temperature. It avoids expensive resistance heat, but you keep paying the fixed gas charge. The calculator compares all-gas with all-heat-pump heating, so it does not show a dual-fuel system’s cost directly.