Furnace vs Heat Pump: Which Is Better? (2026 Cost and Climate Comparison)

A heat pump heats and cools with one machine; a gas furnace heats and needs a separate air conditioner for summer. Which costs less to run depends mostly on two things you can look up: your climate and the price of gas relative to electricity.

At an assumed $1.35 per therm and 18 cents per kWh, the calculator's default home (2,000 sq ft, average insulation, mixed zone 4 climate) costs about $1,895 a year to heat and cool with a new 95% furnace and air conditioner, and $2,228 with a heat pump. The heat pump costs less to run only in the two hottest zones (1 and 2), but it emits less carbon in every zone except the three coldest (6, 7 and 8).

Running cost by climate

Yearly heating and cooling cost for the default 2,000 sq ft home, at an assumed $1.35 per therm and 18 cents per kWh:

The heat loss comes from the same model as our furnace size calculator. The heat pump's heating efficiency is its HSPF2 rating, which is measured for a moderate climate; in cold and very cold zones the calculator assumes a lower seasonal efficiency (HSPF2 6.5 and 5.0), which is why the gap widens there.

Carbon by climate

Electricity is counted at the U.S. grid average of 0.823 lb of carbon dioxide per kWh (EPA eGRID2022), and gas at about 117 lb per million BTU (U.S. EIA). In the three coldest zones the heat pump's lower assumed efficiency outweighs the cleaner fuel; on a cleaner-than-average grid, the heat pump does better everywhere.

What changes the answer

• Energy prices. At U.S. average prices a heat pump needs a seasonal COP of about 3.75 to beat a 95% furnace on heating alone. Cheaper electricity or pricier gas tips it toward the heat pump; see gas vs. electric heating cost.
• The heat pump itself. Cold-climate models hold more of their capacity and efficiency in deep cold; see heat pumps in cold weather.
• Your air conditioner. If it needs replacing anyway, one heat pump installation replaces the air conditioner and takes over the heating.
• A dual-fuel setup pairs a heat pump with a gas furnace, which takes over below a set outdoor temperature.

Install prices and rebates

Installed prices vary too much by house and region to assume, so the calculator leaves them blank; enter your quotes to see payback and a 15-year net. Typical ranges are in our heat pump cost guide and our furnace installation cost guide.

The federal 25C tax credit ended for equipment installed after December 31, 2025. HEAR rebates, run by each state, cover up to $8,000 of a heat pump for income-qualified households, and nothing for gas furnaces; see heat pump tax credits 2026.

Comfort

A furnace delivers short bursts of hot air, while a heat pump delivers a longer, steady stream of warm air that can feel cooler to the hand at the vent. Both keep the house at the thermostat setting. A heat pump also cools, so one system covers the whole year.

Frequently asked questions

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

At an assumed $1.35 per therm and 18 cents per kWh, not in most climates: in the calculator's default home the furnace and air conditioner cost less everywhere except the two hottest zones. Cheaper electricity, pricier gas or a high-efficiency cold-climate heat pump can reverse that.

Which is better in a cold climate?

On running cost at average prices, a furnace. A cold-climate heat pump narrows the gap, and a dual-fuel system uses the heat pump in mild weather and the furnace in deep cold.

Is a heat pump better for the environment?

In most climates, yes: at the U.S. grid average it emits less carbon than the furnace and air conditioner in every zone except the three coldest.

Should I replace my furnace with a heat pump?

If your air conditioner also needs replacing, you're in a mild or hot climate, or electricity is cheap where you live, a heat pump is worth pricing. Enter your quotes in the calculator to compare payback.