Heat Pump vs Gas Furnace Calculator

The answer depends on three things: your climate, your energy prices, and how long you plan to stay in the home. A heat pump is not universally better or worse than a gas furnace. It is a different technology with different cost characteristics, and the math changes depending on where you live.

Heat pumps move heat instead of generating it. In moderate weather, they deliver 2.5 to 3.5 units of heat for every unit of electricity consumed. That is 250% to 350% efficient compared to a gas furnace at 80% to 96%. But as temperatures drop, a heat pump works harder and its effective COP falls. In very cold climates, the operating cost advantage can shrink or disappear entirely.

This calculator adjusts for that reality using IECC climate zones and COP reduction factors based on NEEP cold-climate heat pump data. It does not assume best-case conditions. It models what you can realistically expect in your state.

COP (Coefficient of Performance) is the efficiency metric that determines whether a heat pump is cheaper to run than a gas furnace. A COP of 3.0 means the heat pump delivers 3 kWh of heat for every 1 kWh of electricity it uses.

At a COP of 3.0, the cost of heat pump heating per therm equivalent is approximately one-third of the electricity rate times 29.3 (the kWh-to-therm conversion). At $0.12/kWh, that works out to about $1.17 per therm equivalent. If natural gas costs $1.10/therm and your furnace is 80% efficient, gas heating costs $1.38 per useful therm. In that case, the heat pump wins by about $0.21 per therm.

But COP drops in cold weather. At 0 degrees F, even a good cold-climate heat pump might deliver a COP of 1.5 to 2.0. At those levels, the cost advantage over gas can disappear, especially if gas is cheap in your area. This is why climate zone matters so much, and why this calculator applies a seasonal COP adjustment rather than using the rated number.

The IRA Section 25C federal tax credit for heat pumps terminated for systems placed in service after December 31, 2025 under the One Big Beautiful Bill Act. For systems installed in 2025 or earlier, the credit provided 30% of installed cost capped at $2,000 per year. There is no current federal credit for residential heat pumps installed in 2026. (Source: IRS.gov, OBBBA 2025.)

Several states continue to offer their own incentives. Massachusetts, Maine, New York, and others offer rebates from $1,000 to $10,000. Some utility companies offer additional rebates through efficiency programs. State and utility programs are independent of the federal credit and remain available even after the federal credit expired.

Check the DSIRE database (dsireusa.org) for current incentives in your state. Programs change frequently, and some have income limits or enrollment caps.

Gas furnaces are not obsolete. In regions with very cheap natural gas and expensive electricity, a high-efficiency (96% AFUE) gas furnace can be the cheaper option over 15 years. This is especially true in IECC Climate Zones 6 and 7, where the cold-weather COP penalty is largest and heating demands are highest.

If your existing furnace is relatively new (under 10 years) and high-efficiency, the incremental savings from switching to a heat pump may not justify the upfront cost for years. Run the numbers with your actual equipment age and efficiency rating.

One factor this calculator does not model: comfort. Some homeowners in very cold climates report that heat pumps deliver air at a lower temperature than gas furnaces (90-100 degrees F vs 120-140 degrees F), which can feel drafty despite maintaining the thermostat setpoint. Modern cold-climate heat pumps have largely addressed this, but it is worth discussing with your HVAC contractor.