Heat Pump vs Furnace Calculator

It depends on your local electricity and gas rates. Heat pumps are highly efficient — moving 2–4 units of heat for every unit of electricity used (COP of 2–4). In mild climates with moderate electricity rates, heat pumps often cost less to operate than gas furnaces. In very cold climates or areas with high electricity prices, gas can be cheaper.

HSPF stands for Heating Seasonal Performance Factor. It measures how efficiently a heat pump delivers heat over a full heating season. A higher HSPF means lower operating costs — modern units typically range from 7 to 15 HSPF. The federal minimum is 8.2 HSPF2 for new units, while high-efficiency models exceed 10.

AFUE (Annual Fuel Utilization Efficiency) measures what percentage of fuel a furnace converts into usable heat. An 80% AFUE furnace uses 80 cents of every dollar of gas for heating and loses 20 cents as exhaust. High-efficiency condensing furnaces reach 95–98% AFUE, significantly reducing annual fuel costs.

Heat pumps work most efficiently in mild-to-moderate climates where temperatures rarely drop below 20°F. In very cold climates, heat pump efficiency drops and a gas furnace or dual-fuel system (heat pump + gas backup) may be more cost-effective. Modern cold-climate heat pumps have improved performance down to -13°F, narrowing this gap.

In most cases, a heat pump will be cheaper to operate than a propane furnace because propane prices are high relative to electricity on an equivalent heat output basis. Unless you live in a very cold region with expensive electricity, a heat pump is typically the better choice when natural gas is unavailable.

Yes, significantly. A well-insulated home requires far fewer BTUs to heat, reducing costs for both systems. However, since heat pump operating costs scale proportionally with heating load, the absolute dollar savings from good insulation can be large for either system. Improving insulation before upgrading your HVAC system is often the highest-return investment.

Heat pumps generally cost more to install — typically $4,000–$8,000 for a standard unit versus $2,500–$5,000 for a gas furnace. However, heat pumps also provide air conditioning, eliminating the need for a separate AC unit. Federal tax credits (up to $2,000) and utility rebates can significantly reduce heat pump installation costs.

A dual-fuel system pairs a heat pump with a gas furnace backup. The heat pump handles heating when temperatures are mild (when it's most efficient), and the gas furnace takes over during extreme cold when the heat pump's efficiency drops. This setup offers the best of both worlds and is popular in climates with cold winters but moderate shoulder seasons.