Heat Pump vs. Boiler Cost Calculator (2026)
Compare annual heating cost: a heat pump vs. an oil, propane, natural-gas, or electric-resistance boiler. Honest savings or extra cost, plus the AC value-add a boiler can't match.
The short answer
Heat pumps almost always beat oil and propane boilers on running cost — typical savings run $500 to $2,500 per year. Heat pumps are usually a wash or modestly worse against cheap natural gas, especially in cold climates with pricey electricity. They beat electric-resistance boilers by 50% to 65% in every climate. The free AC the heat pump adds is a real bonus a boiler can't match.
Annual heating cost
Heat pump saves about $20/yr on heating vs your heating oil boiler.
Annual heating cost
Heating oil boiler
$1,740/yr
498.4 gallons burned · AFUE 0.87
Heat pump
$1,720/yr
7,065 kWh electric · COP 2.49
A heat pump also gives you air conditioning
Your boiler can't cool the house. A heat pump runs in reverse all summer and replaces a central AC or window units entirely. That cooling value isn't reflected in any of the heating-cost numbers above — for homes that currently heat with a boiler and add window ACs in summer, the heat pump replaces both at once.
Heads up on the install
Boiler-heated homes typically use radiators or baseboard, not ducts. Switching to a heat pump usually means a ductless mini-splitsystem — one outdoor unit with several wall-mounted indoor heads — rather than a ducted central air handler. This calculator estimates running cost only; the switch cost in the advanced input above is your installer's number, not ours.
Sources
This calculator uses:
- EIA Short-Term Energy Outlook — Winter Fuels Outlook (Oct 2025 release, covering Oct 2025 – Mar 2026)
- EIA Electric Power Monthly, Table 5.6.A — Average price of electricity to ultimate customers by end-use sector
- EIA Natural Gas — Price of natural gas delivered to residential consumers, by state
- EIA Weekly Heating Oil and Propane Update — residential propane by PADD/state
- EIA Weekly Heating Oil and Propane Update — residential No. 2 heating oil
- ENERGY STAR — Key Product Criteria for Air-Source Heat Pumps (2026 criteria: ≥15.2 SEER2 / ≥7.8 HSPF2; cold-climate ≥8.5 HSPF2 and ≥1.75 COP at 5°F)
- ENERGY STAR — Key Product Criteria for Boilers (≥90% AFUE gas; ≥87% AFUE oil)
- IRS Fact Sheet FS-2025-05 (September 2025) — Energy Efficient Home Improvement Credit (§25C) and Residential Clean Energy Credit (§25D) both terminated for property placed in service after Dec 31, 2025 by One Big Beautiful Bill Act (P.L. 119-21).
Boilers deliver heat via water through radiators or baseboard — not ducts — so the retrofit almost always means a ductless mini-splitsystem, not a ducted central heat pump. The switch-cost input above is your installer's number, not ours; typical whole-home ductless boiler retrofits run $15k–$30k before any incentives. Heating oil and propane prices are especially volatile — the same tank fill in January can be 40% different from the previous January in an unusual winter.
Four boilers, four retrofit stories
Each row is a 2,000 sq ft Cold-climate home with average insulation switching to a HSPF2 8.5 heat pump. Prices are EIA regional defaults. Payback assumes an $18k mini-split retrofit and heating savings only — the ceiling of possible payback (AC value-add, incentives, and rising fuel prices all shorten it).
Heating oil (Northeast) — the classic win
Oil boiler at 0.87 AFUE + oil at $3.50/gal ≈ $2,900/yr to heat. Heat pump on Northeast winter electricity (0.244 $/kWh) ≈ $1,720/yr. Saves ~$1,180/yr → simple payback ~15 years, or ~10 years if you were about to replace the oil tank + boiler anyway.
Propane (rural, off-gas-grid) — the biggest win
Propane boiler at 0.90 AFUE + propane at $2.46/gal ≈ $2,220/yr. Heat pump on Midwest electricity (0.157 $/kWh) ≈ $1,110/yr. Saves ~$1,110/yr on heat alone; the win widens fast because propane spikes hard in cold winters.
Natural gas (urban Midwest) — the honest tie
Gas boiler at 0.90 AFUE + gas at $1.01/therm ≈ $1,120/yr. Heat pump ≈ $1,110/yr. Heating savings are basically nil — the retrofit case here has to come from AC value-add and long-term rate expectations, not heating alone.
Electric resistance boiler — the immediate win
Electric boiler (COP 1.0) on Northeast electricity ≈ $4,240/yr. Same electricity into a HSPF2 8.5 heat pump ≈ $1,720/yr. Saves ~$2,520/yr — payback under 8 years on an $18k retrofit, often under 5 with utility rebates.
Bottom line: the switch is nearly always a big win against oil, propane, or electric resistance. Against cheap urban natural gas it's a tie on heating alone, and the case leans on cooling + rate trajectory instead.
How this calculator works
We estimate annual delivered heat (kWh), divide by each system's efficiency to get fuel input, then convert that fuel input into the right physical unit (gallons of oil, gallons of propane, therms of natural gas, or kWh of electricity) and multiply by your local price.
- Annual heat demand = 5.5 kWh/sq ft (Mixed + Average reference) × home size × climate factor (Hot 0.35 to Very Cold 2.30) × insulation factor (Poor 1.30 to Well 0.75).
- Boiler fuel input = heat demand ÷ AFUE. We default AFUE by fuel (Oil 0.85, Propane 0.90, Natural gas 0.90, Electric resistance 1.00) and let you edit.
- Fuel-unit conversion. Oil 40.59 kWh per gallon (138,500 BTU/gal). Propane 26.82 kWh per gallon (91,500 BTU/gal). Natural gas 29.3071 kWh per therm (100,000 BTU). Electric resistance: 1 kWh of fuel = 1 kWh of input, priced at your $/kWh.
- Heat pump electricity = heat demand ÷ seasonal COP. COP = HSPF2 ÷ 3.412 exactly. Standard tier ≈ 2.20, high-efficiency ≈ 2.49, cold-climate ≈ 2.64.
- Savings = boiler cost − heat pump cost. A negative number means the heat pump is more expensive to run at these prices, which honestly happens with cheap natural gas plus pricey electricity in cold climates.
- Simple payback (optional advanced input) divides your switch cost by annual heating savings. It ignores the added AC value, ignores future fuel-price changes, and ignores any incentives — read it as a directional comparison only.
The most important thing the heating numbers don't capture: a boiler can't cool the house. A heat pump replaces both the boiler and any window ACs in one piece of equipment. For homes that currently use both, the heat pump consolidates two systems.
Frequently asked questions
- Is a heat pump cheaper to run than an oil boiler?
- Almost always. Heating oil at typical prices (around $3.50 to $4.50 per gallon) is one of the most expensive ways to heat a US home. A high-efficiency heat pump cuts annual heating cost by 30% to 60% versus an oil boiler in most US climates, often saving $700 to $2,000 a year on a typical 2,000 sq ft home.
- Is a heat pump cheaper to run than a propane boiler?
- Usually yes. Propane runs $2.50 to $3.50 per gallon in most US markets and packs less energy per gallon than oil, so propane heating is expensive per delivered BTU. A heat pump typically saves $800 to $2,500 a year on a 2,000 sq ft home heated by propane, with the largest savings in Cold and Very Cold climates where heating demand is high.
- Is a heat pump cheaper than a natural-gas boiler?
- Often not, especially in cold climates with cheap natural gas and expensive electricity. Natural gas at $1.20 to $1.60 per therm is one of the cheapest US heating fuels per delivered BTU; the heat pump's COP advantage may or may not overcome the price gap. In milder climates or where electricity is cheap, the heat pump still wins. The calculator above shows your specific case honestly — including when the gas boiler is cheaper to run.
- Can a heat pump replace a boiler?
- Yes. A heat pump can fully replace a boiler for heating and add cooling on top. The catch is that boiler-heated homes typically use radiators or baseboard rather than ducts, so the heat pump install is usually a ductless mini-split system (one outdoor unit, several wall-mounted indoor heads) rather than a ducted central system. Some homeowners keep the boiler as backup for very cold days in a dual-fuel setup.
- Do I need ductwork to install a heat pump?
- No. Ductless mini-split heat pumps deliver heating and cooling without any ducts — they wall-mount one or more indoor air handlers connected to a single outdoor compressor via small refrigerant lines. This is the standard install for homes currently heated by radiators or baseboard. Whole-house ductless systems typically run 3 to 8 indoor heads depending on home size and layout.
- Does a heat pump add air conditioning?
- Yes — for free, as part of the same equipment. A heat pump is mechanically a reversible air conditioner: in summer it works exactly like central AC, in winter it runs in reverse. Boiler-heated homes that currently use window ACs in summer replace both the boiler and the window units with one ductless mini-split system. None of the heating-cost comparisons here capture that cooling value, but it's real and meaningful.
The switch cost is what actually decides this. A boiler-to-heat-pump retrofit is fundamentally a ductless mini-split job — a whole-home multi-zone system that typically runs $15k–$30k before incentives, and the calculator can't know your specific number. Radiators and baseboard usually get left in place as an emergency backup rather than removed. Propane and oil users see the fastest payback because their fuel is priced per gallon at the tank truck, which moves 20–40% year over year; natural-gas users see the slowest because urban gas is one of the cheapest delivered energy sources in the US. HeatPumpLab is independent, no lead-gen, no installer affiliation.