Heat Pump vs Gas Furnace: Which Costs Less to Run?

Compare the cost of delivered heat

A furnace and a heat pump buy different energy, so the only fair comparison is the cost of the heat that actually reaches your rooms. The gas bill guide walks through the two steps once: put both fuels in dollars per million Btu (MMBtu), then divide by the efficiency. Here they are as formulas, with the factors from the US Energy Information Administration (EIA): 1 kWh is 3,412 Btu and 1 therm is 100,000 Btu.

AFUE is a fraction (0.80 for 80%). COP, the coefficient of performance, is the ratio of heat delivered to electricity used. ENERGY STAR defines it as the average rate of space heating delivered divided by the average rate of electrical energy consumed, a dimensionless number. A COP of 2.5 means 2.5 kWh of heat for every kWh you pay for. If your gas is billed per Ccf or per Mcf rather than per therm, the gas bill guide shows the conversion, and the energy converter handles any other unit.

From the rating label to a seasonal COP

Neither appliance is sold with a COP on the box, so you have to translate the rating you do get.

• Gas furnaces: AFUE. Annual fuel utilization efficiency. A furnace with an AFUE of 80 turns 80% of the fuel it burns into usable heat over a year, as the Virginia Cooperative Extension explains. The DOE's Energy Saver guide calls AFUE the measure of heating equipment efficiency to ask your contractor about.
• Heat pumps: HSPF2. The heating seasonal performance factor. ENERGY STAR defines it as the total space heating required in region IV, the reference climate of the federal test, during the heating season in Btu, divided by the total electricity the heat pump system uses in the same season in watt-hours. Ratings from the current federal test (appendix M1) are HSPF2; the earlier test (appendix M) gave plain HSPF, so do not compare an HSPF2 with an older HSPF.

Because HSPF2 is Btu per watt-hour and one watt-hour is 3.412 Btu, the seasonal COP is simply:

The levels that matter, from federal law (10 CFR 430.32) and from ENERGY STAR:

• Furnace minimum. Non-weatherized gas furnaces made from November 19, 2015 until December 18, 2028 must reach 80% AFUE; weatherized (outdoor) gas furnaces 81%. Non-weatherized gas furnaces made on or after December 18, 2028 must reach 95%.
• ENERGY STAR furnaces. 95% AFUE in the US South, 97% in the North.
• Heat pump minimum. Heat pumps made on or after January 1, 2023 must reach HSPF2 7.5 as split systems and 6.7 as single-package units.
• ENERGY STAR heat pumps. HSPF2 7.8 for split systems and 7.2 for single-package equipment (Version 6.2 of the specification). For the Cold Climate designation: HSPF2 8.1 for ducted split and single-package units, 8.5 for non-ducted (ductless) split systems.

Find the HSPF2 of a specific model on its FTC EnergyGuide label or the spec sheet; ENERGY STAR requires the certified ratings to match the ones reported to the DOE and shown on that label.

The cost of heat at winter 2025–26 prices

For heating, the winter price is what counts. The EIA's national average residential gas price swings with the season: in summer the utility's fixed costs are spread over very little gas, so the average per unit is high, which the gas bill guide explains with the monthly figures. This guide therefore uses the three heating months December 2025, January 2026 and February 2026, with our simple average of the EIA's monthly prices:

With the EIA's 2025 average heat content of 1,037 Btu per cubic foot, $14.33 per Mcf is $1.38 per therm, or $13.82 per million Btu of gas. Electricity at 17.45¢ per kWh is $51.13 per million Btu. Divided by each efficiency level:

At these national averages, every gas furnace in the table delivers heat for less than a heat pump at its rated seasonal efficiency. To match a 95% AFUE furnace, a heat pump needs a seasonal COP of about 3.51, an HSPF2 of about 12.0. Against an 80% furnace the bar drops to 2.96, an HSPF2 of about 10.1. With full-year 2025 averages instead (17.30¢ per kWh and $15.34 per Mcf), the break-even against a 95% furnace is 3.26: the summer-heavy annual gas price makes gas look more expensive than it is when you actually heat.

Two cautions. These are averages over every state, and local prices differ far more than the gap between the rows; the next table covers that. And electricity has been rising: the EIA's January to July average was 18.19¢ per kWh in 2026, against 17.01¢ in the same months of 2025.

Break-even table: electricity price vs gas price

Each cell is the seasonal COP a heat pump needs to heat for the same cost as a 95% AFUE gas furnace at that pair of prices. If your heat pump's seasonal COP (HSPF2 ÷ 3.412) is above the number, the heat pump is cheaper to run; below it, the furnace is. Use your marginal prices, the per-kWh and per-therm rates without fixed monthly charges, as the gas bill guide explains.

For reference: the federal minimum split-system heat pump has a seasonal COP of 2.20, the ENERGY STAR Cold Climate ductless level 2.49. Cells well below those numbers favor the heat pump; cells well above favor gas.

For prices between the columns, the rule behind the table is one line:

The 27.84 is the 29.31 kWh of energy in a therm times the furnace's 0.95. Example: at 13¢ per kWh and $1.50 per therm, a heat pump has to beat 2.41 to undercut a 95% furnace, and 2.03 to undercut an 80% one.

How cold weather lowers the COP

A heat pump moves heat from the outdoor air into the house, and the colder the outdoor air, the harder that gets. The EIA's glossary puts it plainly: the efficiency of a heat pump is directly related to the temperatures between which it operates, and when the outside air approaches 32 °F or less, air-source heat pumps lose efficiency and generally need a backup (resistance) heating system. The DOE adds that backup electric-resistance heating is the more expensive kind.

That has three consequences for the cost comparison:

• HSPF2 is an average for one climate. It covers a whole season in the test's reference region IV. In a colder region, more of the heat is made on cold days, so the real seasonal COP comes out lower than HSPF2 ÷ 3.412; in a milder region, higher. NEEP, the regional energy efficiency organization behind a cold-climate heat pump specification, notes that the older HSPF metric has no test points below 17 °F.
• The cold hours cost the most. ENERGY STAR's Cold Climate designation requires a COP of at least 1.75 at 5 °F (about −15 °C) and a heating capacity at 5 °F of at least 70% of the capacity at 47 °F (about 8 °C). At the winter averages above, heat at COP 1.75 costs $29.22 per million Btu, against $14.55 from a 95% furnace. A model that only meets the floor costs about 2.0 times as much per unit of heat at that temperature. ENERGY STAR requires the heating capacity and COP at 5 °F to be reported for every certified heat pump, so ask for that figure.
• Backup heat is COP 1. Below the point where the heat pump can no longer cover the house, resistance strips fill the gap at $51.13 per million Btu at the winter averages. The more hours a home spends there, the further the season's COP falls.

Where are cold climates? NEEP's sizing guide, hosted by the DOE's Building America Solution Center, treats International Energy Conservation Code (IECC) climate zone 4 and higher as cold. For those homes it describes two ways to keep gas in the picture: leave the existing heating system in place to provide heat only as needed, or install the heat pump in a dual-fuel configuration with a central gas furnace. Its advice for the setup: set the heat pump's thermostat at the comfort level and the backup system's thermostat about 4 to 10 °F lower, so the heat pump does most of the work.

The break-even COP from the table also tells you when a dual-fuel system should switch. Whenever the heat pump's COP at the current outdoor temperature is above it, the heat pump is the cheaper heat; below it, the furnace is. NEEP's guide points installers to manufacturers' extended performance tables for each model; where those list the COP by outdoor temperature, that is where you find the crossover.

If you are sizing equipment, use a proper load calculation. The BTU calculator gives a rough heating figure per room, and the temperature converter handles °F and °C.

Worked example: one winter, two price levels

All inputs below except the EIA averages are example values. Say a home burned 650 therms of gas for space heating last winter in an 80% AFUE furnace. (Find your own heating therms by subtracting a summer month's therms, which cover water heating and cooking, from each winter month.) The heat the house actually received was:

The same 52 MMBtu from a 95% furnace takes 547 therms. From a heat pump rated HSPF2 8.1 (seasonal COP 2.37, assumed to hold in this climate), it takes 52 × 293.1 ÷ 2.37 = 6,420 kWh. Priced two ways:

Home A pays the national winter averages, 17.45¢ per kWh and $1.38 per therm. Home B pays example prices of 12¢ per kWh and $1.80 per therm. Same house, same heat, opposite answers: at national averages the heat pump costs $363 more than a new 95% furnace, while at Home B's prices it saves $215 against the new furnace and $400 against the old one. The break-even table predicts this: Home A's prices need a COP of 3.51, Home B's only 1.86.

To estimate your own kWh for other equipment, the electricity cost calculator turns watts and hours into a bill amount, and the kW vs kWh guide explains the units.

What else changes the answer

• The gas customer charge. If heating is the only thing on gas and you disconnect after switching, the fixed monthly charge disappears too. At an example $15 a month that is $180 a year, which never shows up in a per-therm comparison. If the stove or water heater stays on gas, it stays.
• The furnace's own electricity. AFUE leaves out the electricity the furnace's fan and blower use, according to the Virginia Cooperative Extension. HSPF2, by its ENERGY STAR definition, counts the electricity of the heat pump system. The furnace row is therefore slightly flattered.
• Cooling. A heat pump is also the air conditioner. If your central AC needs replacing anyway, the choice is between one new heat pump and a new furnace plus a new AC, which changes the purchase side of the math.
• Your rate plan. Some electric rates change by time of day. Use the price you would actually pay for winter heating; the electric bill guide covers time-of-use plans.
• The 2028 furnace standard. Non-weatherized gas furnaces made from December 18, 2028 must reach 95% AFUE, so the 80% row of the tables will no longer apply to new furnaces of that type.
• The federal tax credit is gone. The energy efficient home improvement credit (section 25C) covered 30% of qualified costs, up to $2,000 a year for heat pumps. The IRS says it will not be allowed for any property placed in service after December 31, 2025, following Public Law 119-21 of July 4, 2025. For a heat pump installed in 2026 there is no 25C credit; utility and state programs are separate, so ask your utility.
• The purchase price. Installed costs vary too much with the house, the ducts and the region for one national figure to help. Get quotes for both options, then put the price difference and the yearly saving into the payback period calculator.

Run your own numbers in five steps

1. From your winter bills, note the marginal price per therm of gas and per kWh of electricity.
2. Look up the break-even COP in the table, or compute 27.84 × $/kWh ÷ $/therm (use 23.45 if you would keep an 80% furnace).
3. Convert the HSPF2 of the heat pump you are considering: HSPF2 ÷ 3.412. In a cold climate, also ask for its COP at 5 °F, which ENERGY STAR requires for certified models.
4. If the seasonal COP clears the break-even with room to spare, the heat pump should cost less to run. If it is close, a dual-fuel setup lets each fuel run where it is cheaper.
5. Turn last winter's heating therms into delivered heat, as in the worked example, to put a dollar figure on the difference, then weigh it against the quotes.

Keep the numbers from each winter in one place: the free bill tracker has a row for every utility and month, so next year you can check the result against the estimate.

Frequently asked questions

Sources

• US Energy Information Administration, Electric Power Monthly, table 5.3: average price of electricity to ultimate customers, residential, 2016 to July 2026 (monthly, annual 2025 and year-to-date values)
• US Energy Information Administration, Natural Gas Prices: US price of natural gas delivered to residential consumers, monthly and annual (release date September 30, 2026)
• US Energy Information Administration, FAQ: How do I convert natural gas prices in dollars per cubic feet to dollars per British thermal unit or therm? (2025 average heat content about 1,037 Btu per cubic foot)
• US Energy Information Administration, British thermal units (Btu): 1 kWh = 3,412 Btu, 1 therm = 100,000 Btu
• US Energy Information Administration, Glossary: heat pump, heat pump (air source), heat pump efficiency (loss of efficiency near 32 °F and below, resistance backup)
• 10 CFR 430.32, Energy and water conservation standards: (c)(5) minimum SEER2 and HSPF2 for heat pumps made on or after January 1, 2023; (e)(1) minimum AFUE for gas furnaces, including 95% from December 18, 2028 (Cornell LII copy of the eCFR text)
• ENERGY STAR, Program Requirements for Heat Pumps, Version 6.2 (Rev. February 2026): HSPF2 and COP definitions, Table 1 and Table 2 criteria, Cold Climate low ambient performance at 5 °F
• ENERGY STAR, Heat pump equipment key product criteria
• ENERGY STAR, Furnaces key product criteria (95% AFUE U.S. South, 97% AFUE U.S. North for gas furnaces)
• NEEP, Cold Climate Air Source Heat Pump (ccASHP) specification and product list: versions and effective dates; HSPF has no test points below 17 °F
• NEEP, Guide to Sizing and Selecting Air-Source Heat Pumps in Cold Climates (rev. April 8, 2020), hosted by the DOE Building America Solution Center: IECC climate zone 4 and higher as cold climates, dual-fuel configuration, existing furnace as backup, supplemental heat
• US Department of Energy, Energy Saver: Tips on Saving Money and Energy in Your Home (2022 edition): furnaces and AFUE, heat pumps, cold-climate air-source heat pumps, backup electric-resistance heating
• Grisso, Walker, Agee and Ignosh, Energy Series: What about the Heating System?, Virginia Cooperative Extension publication BSE-292 (AFUE meaning; AFUE leaves out fan and blower electricity)
• Internal Revenue Service, FS-2025-05 (August 21, 2025): FAQs for modification of sections 25C, 25D and others under Public Law 119-21, commonly known as the One, Big, Beautiful Bill (25C not allowed for property placed in service after December 31, 2025)
• Internal Revenue Service, Energy efficient home improvement credit (30% of qualified expenses, up to $2,000 a year for heat pumps, for property placed in service 2023 through 2025)

Written by Tobias. Updated October 22, 2026.