Heat Pump vs. Gas Furnace Cost Calculator (2026)
Compare upfront install, annual operating cost, and 10-year total cost of ownership for any US home.
The short answer
A heat pump and a gas furnace usually cost similar amounts to install once you remember the gas path also needs a separate AC unit. Whether a heat pump is cheaper year over year depends on your local electricity and gas prices and your climate — in mild regions with cheap electricity it usually wins, while in very cold zones with cheap gas it often does not.
Verdict
Heat pump is $2,000 cheaper upfront but $200/yr pricier to run — that upfront edge is eroded after about 9.8 years.
Over 10 years, gas + AC is about $30 cheaper total.
Annual heating cost
Heat pump
$750/yr
4,416 kWh electric input
Gas furnace
$550/yr
391 therms burned
Heat pump runs about $200/yr more than the gas furnace at these rates.
Cooling operating cost is roughly equal for both paths (a heat pump in cooling mode ≈ a central AC), so it cancels and is not counted here.
Upfront install
Heat pump
$9,500
Heats and cools — one system
Gas furnace + AC
$11,500
Furnace $6,000 + AC $5,500
10-year total cost of ownership
Heat pump
$17,010
$9,500 install + 10 × $750
Gas furnace + AC
$16,970
$11,500 install + 10 × $550
These are ballpark estimates for comparison, not contractor quotes. Actual cost depends on local labor, equipment brand, ductwork condition, and your utility rates. Get written quotes before deciding.
How this calculator works
We estimate how much delivered heat your home needs in a year (kWh of heat), then divide that by each system's efficiency to get fuel input. The fuel input times your local price gives annual operating cost.
- Annual heat demand = 5.5 kWh/sq ft (the mixed-climate, average-insulation reference) × your home size × a climate factor (Hot 0.35 to Very Cold 2.30) × an insulation factor (Poor 1.30 to Well-insulated 0.75).
- Gas furnace operating cost = heat demand ÷ AFUE → divide by 29.3071 kWh/therm to get therms → multiply by your gas price.
- Heat pump operating cost = heat demand ÷ seasonal COP (we convert HSPF2 → COP by dividing by 3.412) → multiply by your electricity price.
- Upfront installuses national base equipment prices (gas furnace, central AC, heat pump) scaled by a region cost multiplier × an install-difficulty factor (good ductwork to complex retrofit). The combined multiplier is capped at 1.50× so a single extreme input can't blow up the install estimate.
- Cooling cost cancels.A heat pump in cooling mode works like a central AC, so cooling kWh is roughly the same on both paths and we don't double-count it. The cooling decision shows up in the upfront comparison instead.
The crossover insight depends on which path is cheaper upfront and which is cheaper to run: if the heat pump is more expensive upfront but cheaper to run, we report a payback period; if it's cheaper upfront but pricier to run, we report how many years until that upfront advantage erodes; if one path is cheaper on both fronts, it wins outright.
Frequently asked questions
- Is a heat pump cheaper than a gas furnace?
- It depends on three things: your climate, the price of electricity vs. natural gas in your area, and whether you also need air conditioning. In mild and warm climates with average or cheap electricity, a heat pump is almost always cheaper to install (because it replaces both furnace and AC) and cheaper to run. In very cold climates with cheap gas, a high-efficiency gas furnace plus AC can be cheaper to operate, though heat pumps often still win on upfront cost when AC is already needed.
- What is the payback period of a heat pump vs. a gas furnace?
- If you're replacing both a furnace and an aging AC, a heat pump often has no payback period at all — it's cheaper upfront. When the heat pump is more expensive upfront, typical paybacks run 3 to 10 years for warm and mixed climates, and can stretch beyond 15 years (or never break even) in cold climates with cheap natural gas. Use the calculator above with your actual rates to get a personalized number.
- Do heat pumps work in cold climates?
- Yes. Modern cold-climate heat pumps (HSPF2 around 9 or higher) deliver useful heat at outdoor temperatures of -15°F and below, and most are rated to keep 70–80% of their capacity at 5°F. In very cold zones it's common to pair a cold-climate heat pump with a small backup — electric resistance strips or a retained gas furnace in a dual-fuel setup — for the coldest days of the year.
- Does a heat pump replace your AC?
- Yes. A heat pump is mechanically a reversible air conditioner: in summer it works exactly like a central AC. Installing a heat pump replaces both the furnace and the AC with one outdoor unit and one indoor air handler, which is why heat pumps are often cheaper upfront than the gas-furnace-plus-AC path when both need replacing.
- How long do heat pumps last compared to gas furnaces?
- A heat pump typically lasts 15 to 20 years, similar to a central AC. A gas furnace typically lasts 15 to 25 years. Because a heat pump runs year-round (heating and cooling) it accumulates run hours faster than a furnace, which is one reason calculators usually compare on a 10-to-15-year window rather than full lifetime.
- Do I need a backup heat source with a heat pump?
- In hot, warm, and mixed climates, no — a properly sized heat pump handles 100% of heating. In cold climates, electric resistance backup is standard and cheap to add. In very cold climates, many homeowners keep a small gas furnace as backup for the coldest week of the year, called a dual-fuel setup; the calculator above doesn't model dual fuel explicitly but you can approximate it by lowering the gas furnace efficiency tier and toggling AC off.
Disclaimer: All numbers shown by this calculator are educational estimates for comparison, not contractor quotes. Actual cost depends on your local labor market, equipment brand, ductwork condition, electrical service capacity, and utility rates. Get written quotes from licensed HVAC contractors before deciding. HeatPumpLab is independently operated and not affiliated with any installer network.