- Operating-cost break-even: a heat pump beats a gas furnace when
electric $/kWh < gas $/therm × HSPF2 ÷ AFUE(%). - Worked example: $1.50/therm gas, 80% AFUE furnace, 9.0 HSPF2 heat pump → break-even at 16.9¢/kWh electricity.
- Heat pumps move heat rather than make it: 2–4 units of heat per unit of electricity (seasonal COP 2–3.5); a furnace can never exceed 1 per unit of gas.
- If the heat pump also replaces a 12+ year-old AC, price it against “new furnace + new AC,” not the furnace alone — that comparison often decides it.
Why the answer isn't universal
A gas furnace makes heat: burn a therm, keep 80–97% of it (its AFUE). A heat pump moves heat from outdoor air indoors, so it delivers more energy than it consumes — a seasonal COP of 2–3.5, meaning 200–350% “efficiency.” Per unit of energy, the heat pump wins easily. Per dollar, it depends on the price gap between gas and electricity where you live, because a therm holds 29.3 kWh of energy but usually costs far less than 29 kWh of electricity.
The break-even formula
Worked example: gas at $1.50/therm, current furnace 80% AFUE, heat pump rated 9.0 HSPF2 → 1.50 × 9.0 ÷ 80 = $0.169/kWh. If your electricity costs less than ~16.9¢/kWh, the heat pump wins on operating cost against that furnace; at 25¢/kWh, gas wins the fuel bill. Notice the AFUE sits in the denominator — the worse your current furnace, the stronger the heat pump's case. Cheap hydro or nuclear-region power plus expensive delivered gas flips it decisively toward the heat pump; California-style 30¢+ electricity keeps gas cheap to run even at high gas prices. The heating calculator computes this break-even automatically from your own prices and shows both systems on one chart.
What tilts the decision beyond the fuel bill
Toward the heat pump
It replaces the AC too. If your air conditioner is also near end of life, the heat pump replaces two machines with one — add the cooling savings to the heating math, and the combined install premium over “new furnace + new AC” is often small or negative. Incentives lean electric: HEAR rebates (up to $8,000, income-qualified) and most state programs pay for heat pumps, rarely for gas furnaces. No combustion indoors: no flue, no CO risk, no gas leaks, and one appliance closer to dropping the gas meter's fixed monthly charge. Carbon: even on today's grid, a heat pump usually emits less than a furnace, and it gets cleaner every year the grid does.
Toward the furnace (or a hybrid)
Very cold climates: standard heat pumps lose capacity below ~25°F; even cold-climate models work harder (lower COP) in deep cold, and electric-resistance backup at COP 1 is expensive. Modern cold-climate units genuinely perform to −15°F, but sizing and backup strategy matter — insist on a Manual J load calc. Cheap gas, dear power: where the break-even formula says gas, it means it. Low install cost: a like-for-like 96% furnace swap is usually the cheapest capital path if the AC is healthy. The hybrid option: a dual-fuel system pairs a heat pump with a gas furnace and switches to gas below a set outdoor temperature — running each fuel where it's cheapest. It's often the economically optimal answer in cold, cheap-gas regions.
A 2026 decision path
1) Compute the break-even electric rate from your own bills (or let the calculator do it). 2) If the heat pump wins on fuel and your AC is 12+ years old, the switch is usually compelling — price the heat pump against “furnace + AC,” not furnace alone. 3) If gas wins on fuel but you want to electrify, get a cold-climate model quote with HEAR/state rebates applied and re-run the numbers — incentives frequently close the gap. 4) In IECC zones 6–7 with cheap gas, price a dual-fuel hybrid. 5) Whatever you choose, three quotes and a load calculation are worth more than any efficiency tier.
Frequently asked questions
Is a heat pump cheaper to run than a gas furnace?
It depends on local prices. The break-even: a heat pump beats a furnace when your electric rate ($/kWh) is below gas price ($/therm) × HSPF2 ÷ AFUE(%). At $1.50/therm gas, an 80% furnace, and a 9.0 HSPF2 heat pump, that's about 16.9¢/kWh. Below that electric rate the heat pump wins; above it, gas does.
Do heat pumps work in cold climates?
Modern cold-climate heat pumps heat effectively to −5°F to −15°F and are standard equipment in Maine, Minnesota, and Scandinavia. They deliver less capacity and lower COP in deep cold, so correct sizing and a sensible backup (electric strips or a dual-fuel furnace) are the real success factors — not whether the technology works.
What is a dual-fuel or hybrid heat pump system?
A heat pump paired with a gas furnace as backup. Above a programmable balance point (often 25–40°F) the heat pump runs; below it the furnace takes over. Each fuel runs where it's cheapest, cutting gas use 50–80% while keeping cold-snap costs and comfort under control.
Should I replace my furnace and AC with one heat pump?
If both are near end of life, usually yes on the numbers: one install replaces two, incentives are strongest for heat pumps, and you gain high-efficiency cooling. Run both calculators — heating savings plus cooling savings against the combined avoided cost of a new furnace and a new AC — before deciding.