Cheaper To Run
Gas furnace wins
Saves $166/yr at your fuel prices
Heat Pump
$755
4,444 kWh/yr
Gas Furnace
$589
421 therms/yr
Breakeven Electricity Rate
$0.13/kWh
Below this electricity price, the heat pump is cheaper at your gas rate.
How we calculated this
= 40.0 MMBTU/yr
× $0.17/kWh = $755/yr
× $1.40/therm = $589/yr
Heating costs only, using seasonal-average efficiency. In severe cold snaps a heat pump's efficiency drops and backup heat may run, so cold-climate homes should treat the heat pump figure as optimistic.
Reference
When the Heat Pump Wins
The electricity price below which a heat pump beats a 95% AFUE gas furnace, by HSPF rating and gas price per therm.
| Heat Pump Rating | Gas @ $1.00 | Gas @ $1.50 | Gas @ $2.00 |
|---|---|---|---|
| HSPF 8 | $0.08 | $0.13 | $0.17 |
| HSPF 9 | $0.09 | $0.14 | $0.19 |
| HSPF 10 | $0.11 | $0.16 | $0.21 |
Electricity cheaper than the listed price → heat pump wins. Your exact breakeven appears in the calculator above.
Learn
Heat Pump vs. Furnace, Explained
How the comparison works
Both systems are scored on the same job: delivering your home's annual heating load. The heat pump's cost is that load divided by its HSPF (BTU of heat per watt-hour), priced at your electricity rate. The furnace's cost is the same load divided by its AFUE, priced per therm of gas. Same heat, two fuel bills, and the cheaper one depends on your prices, not on the technology.
HSPF, AFUE, and SEER
Three ratings, three jobs. AFUE is the share of the gas that becomes heat in your home: a 95% furnace wastes 5% up the flue. HSPF is the heat pump's seasonal heating output per unit of electricity; an HSPF of 9 means about 2.6 units of heat per unit of electrical energy, because a heat pump moves heat instead of generating it. SEER is the same machine's cooling rating and has nothing to do with winter. A heat pump replaces both your AC and your heating, which is part of its economic appeal.
Why fuel prices decide the answer
A heat pump at HSPF 9 turns one kWh into about 9,000 BTU. A 95% furnace turns one therm into 95,000 BTU. Divide it out and the heat pump is cheaper whenever a kWh costs less than about a tenth of a therm. New England, with expensive electricity and gas service, often favors gas; the Pacific Northwest, with cheap hydro power, almost always favors the heat pump. Check the breakeven figure in the calculator against your own bills.
Cold climates change the math twice
Cold climates hurt the heat pump two ways: efficiency drops in the deepest cold exactly when the load peaks, and electric resistance backup may kick in at several times the running cost. Cold-climate models (HSPF 10+) close most of the gap, and the larger heating load means efficiency differences are worth more in dollars. The net effect: heat pumps absolutely work in cold climates, but the equipment choice matters far more there than in Tennessee.
Beyond the fuel bill
Running cost isn't the whole decision. A heat pump replaces the AC too, often qualifies for state and utility rebates (the $2,000 federal 25C credit expired at the end of 2025), and avoids combustion in the home. Gas keeps working in an outage with a simple generator and heats faster at the registers. If the running costs come out close, these tiebreakers usually decide it.
FAQ
Common Questions About Heat Pumps vs. Furnaces
Is it cheaper to heat with a heat pump or a gas furnace?
It depends almost entirely on your local fuel prices. At typical rates ($0.17/kWh electricity, $1.40/therm gas), a 95% AFUE furnace edges out a standard HSPF 9 heat pump. Cheap electricity (under ~$0.13/kWh at those numbers), a cold-climate heat pump with HSPF 10+, or gas above ~$1.80/therm flips the answer. That's why this calculator asks for your actual rates instead of giving a one-size answer.
Does a heat pump work below freezing?
Yes, with caveats. Modern cold-climate units deliver their rated heat down to around 5°F and keep running below -10°F, just with reduced capacity and efficiency. Standard builder-grade units start losing ground below 25–30°F and lean on electric resistance backup, which is expensive. The HSPF rating already averages this over a typical season, but if your winters regularly hit subzero, treat the heat pump cost here as optimistic.
What HSPF rating should I buy?
The current federal minimum is HSPF 8.8 (HSPF2 7.5). In mild and moderate climates, 8.5–9.5 is the value sweet spot; premium efficiency rarely pays for itself when the heating season is short. In cold climates the math reverses: every point of HSPF gets multiplied by a much larger heating load, so a cold-climate unit with HSPF 10+ is usually worth the premium. Try both numbers in the calculator and compare.
What's the difference between HSPF and HSPF2?
Same idea as SEER vs. SEER2. HSPF2 (effective January 2023) uses a tougher test procedure with higher external static pressure and a colder temperature bin profile, so the same physical unit rates about 15% lower. Multiply an HSPF2 figure by roughly 1.15 to get its legacy HSPF equivalent, which is what this calculator expects.
Should I keep my furnace as backup (dual fuel)?
Often, yes. A dual-fuel setup runs the heat pump in mild and moderate weather, where it beats gas on cost, and hands off to the furnace in deep cold, where the furnace wins on both capacity and price. If you already have a working furnace and gas service, adding a heat pump on top and setting a sensible switchover temperature is frequently the cheapest path, and it removes the cold-snap risk entirely.
Related Tools
SEER Savings Calculator
The same unit's cooling side: savings from a higher SEER rating.
↳ SEER 10 → 18 · 3 tons · warm → ~$410/yr saved
HVAC Running Cost Calculator
What the cooling season costs you per hour, month, and year.
↳ 3 ton · SEER 16 → ~$90/mo
Furnace Size Calculator
Size the furnace side of the comparison for your home.
↳ 1,800 sq ft · cold zone → ~80,000 BTU