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Heat Pump vs Gas Furnace Cost Calculator

Estimate what it costs to heat your home with an electric heat pump versus a gas, propane or oil furnace, using your own energy prices and efficiencies — and find the electricity price at which the heat pump stops being cheaper.

Your home
Estimate heat needed from
ft²
Energy prices
Furnace fuel
$/ kWh
$/ therm
Equipment
Average over the heating season. HSPF2 ÷ 3.412 gives a rough figure for the rating region.
%
Optional
$/ month
Only if going all-electric removes a fixed gas connection or tank rental fee.
$
After rebates. Used for a simple payback.

Results

Gas furnace estimated savings$33 / yearThe natural gas furnace costs less to run at these prices
Heat pump per year$664
Natural gas furnace per year$632
Heat pump is cheaper below$0.16 / kWh
Heat delivered per year
40 MMBtu (2,000 ft² × 20,000 Btu/ft²)
Heat pump electricity
3,908 kWh at COP 3
Natural gas furnace fuel
421 therms at 95% AFUE
Heat pump cost per MMBtu
$16.61
Furnace cost per MMBtu
$15.79
Break-even seasonal COP
3.16

Seasonal COP already averages mild and cold days; very cold snaps, defrost cycles and backup resistance heat lower it. Use the dual fuel switchover calculator to see the temperature where each system is cheaper.

Heating only: cooling, equipment price, maintenance and rebates are not included. This is an operating-cost estimate, not an HVAC load calculation or equipment design.

How it works

  1. Estimate the heat your home needs: from floor area and climate, or — more accurately — from last year’s heating fuel and your current furnace efficiency.
  2. Choose the furnace fuel and enter your electricity and fuel prices from recent bills (total cost divided by units used).
  3. Enter the heat pump’s seasonal COP and the efficiency (AFUE) of the furnace you are comparing.
  4. Optionally add a fixed fuel charge you would avoid and the heat pump’s extra up-front cost to see a payback period.

Formula

Heat pump $/MMBtu = electricity price × 1,000,000 ÷ (3,412 × COP)
Furnace $/MMBtu = fuel price × 1,000,000 ÷ (Btu per unit × AFUE)
Annual cost = heat delivered (MMBtu) × $/MMBtu
Break-even electricity price = furnace $/MMBtu × 3,412 × COP ÷ 1,000,000

One kWh is 3,412 Btu; a therm of natural gas is 100,000 Btu, a gallon of propane about 91,500 Btu and a gallon of heating oil about 138,500 Btu. From a bill, heat delivered = fuel used × Btu per unit × current efficiency. From floor area, the calculator uses about 10,000 (mild), 20,000 (mixed), 32,000 (cold) or 45,000 (very cold) Btu per square foot per year — a rough average that insulation and thermostat habits can change by half.

Example

A home in a cold climate burned 900 therms of gas for heat last year in an 80% furnace. Electricity costs $0.14/kWh and gas $1.35/therm; a cold-climate heat pump (seasonal COP 2.6) would cost $4,000 more than a 96% furnace and let the owner drop a $20/month gas service charge.

Inputs

Estimate heat needed from
Last year’s fuel use
Heating fuel used last year
900
Current furnace efficiency
80 %
Furnace fuel
Natural gas
Electricity price
$0.14 / kWh
Gas price
$1.35 / therm
Heat pump seasonal COP
2.6
New furnace efficiency (AFUE)
96 %
Fuel service charge avoided
$20 / month
Extra up-front cost of heat pump
$4,000

Result

Heat pump estimated savings$116 / yearCompared with the furnace at the prices entered
Heat pump per year$1,136
Natural gas furnace per year$1,253
Heat pump is cheaper below$0.12 / kWh
Load this example into the calculator →

What decides the winner

The comparison comes down to one ratio: the price of a kWh against the price of a therm (or gallon), scaled by COP and AFUE. With a seasonal COP of 3 against a 95% gas furnace, the heat pump is cheaper whenever a kWh costs less than about one-ninth of the price of a therm — below roughly $0.16/kWh when gas costs $1.50/therm. Propane and oil are more expensive per Btu, so heat pumps usually win against them.

In very cold climates the seasonal COP falls and backup heat runs more often. Many homes there use a dual fuel system: the heat pump runs in mild weather and the furnace takes over below a switchover temperature.

Limits of this estimate

This is an operating-cost comparison for heating only. It does not size equipment, check that a heat pump can meet your home’s design load, or include cooling, maintenance, electrical upgrades or incentives. A Manual J load calculation by an HVAC professional is the basis for selecting equipment.

Frequently asked questions

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

It depends on local prices. With a seasonal COP of 3 and a 95% furnace, the heat pump is cheaper when electricity costs less than about one-ninth of the gas price per therm — roughly $0.16/kWh when gas is $1.50/therm. The calculator shows your exact break-even price.

What COP should I use for a heat pump?

Seasonal averages of 2.5–3.5 are common. Cold-climate models in northern states often average 2.3–2.8; mild-climate installations can exceed 3.5. The manufacturer’s HSPF2 rating divided by 3.412 gives a rough seasonal COP.

Is a heat pump cheaper than propane or oil heat?

Usually, yes. Propane and heating oil typically cost more per million Btu than electricity delivered by a heat pump with a COP above about 2, which is why heat pumps often pay back fastest in homes that heat with propane or oil.

How do I find my heating-only gas use?

Add up the therms on your winter bills and subtract the summer monthly average for each winter month; the summer baseline is roughly water heating and cooking.

Does this include air conditioning?

No. A heat pump also provides cooling, often more efficiently than an older central air conditioner, but those savings are not counted here.