NOVORY

Heat Pump vs Furnace Cost Calculator

Upfront price lies. Compare 15 years of total cost — install plus fuel — side by side.

Quick answer

A heat pump costs $7,000–$12,000 installed in 2026 versus $4,000–$6,500 for a 95% AFUE gas furnace. But the heat pump heats and cools at roughly 320% efficiency (COP 3.2) versus 95% for gas, cutting annual heating bills 30–50% in most climates. The $2,000 federal 25C credit ended for systems placed in service after Dec 31, 2025, so 2026 math has no federal credit — state and utility rebates remain. Over 15 years, the winner depends on your rates and climate: run your numbers above.

Calculator

sq ft
$/kWh
$/therm

How it works

Install + 15 × Annual heating cost = 15-year total, per system

Install: heat pump $6,500 + $2.25/sq ft (no federal 25C credit in 2026 — expired Dec 31, 2025); 95% AFUE furnace $3,500 + $1.50/sq ft. Annual heating: your climate's load (0.020 / 0.035 / 0.055 MMBtu per sq ft) converted at heat-pump COP 3.2 or furnace 95% AFUE, priced at your rates.

No price escalation modeled

Energy prices are held flat for 15 years — a documented simplification. If gas prices rise faster than electricity (the long-term trend), the heat pump's advantage grows.

Worked example

2,000 sq ft, moderate climate, $0.14/kWh, $1.60/therm:

Heat pump: $9,000 install + 15 × $898 = $22,463

Furnace: $6,500 install + 15 × $1,179 = $24,184

Winner: heat pump by ~$1,720

Your rates decide your winner — pull them from a real bill.

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The furnace-vs-heat-pump debate is usually argued with upfront prices alone — and the furnace always wins that round. But nobody buys 15 years of heating upfront. The real question is total cost of ownership: install price plus a decade and a half of fuel, without the expired federal credit in the mix.

This calculator models both sides honestly: installed cost scaled to your home, annual heating load by climate zone, and your actual local energy rates. No brand pitches, no installer quotes — just the math.

How to compare heat pump vs furnace cost fairly

  1. Pull your real rates: $/kWh from your electric bill and $/therm (or $/ccf) from your gas bill. National averages mislead — local rates decide the winner.
  2. Pick your climate zone honestly: mild (South), moderate (Mid-Atlantic/Midwest), cold (Northeast/Upper Midwest). Heating load roughly doubles from mild to cold.
  3. If your air conditioner is also aging, compare against furnace + AC ($7,500–$13,000), not the furnace alone — the heat pump replaces both.
  4. There is no built-in federal credit for 2026 installs (25C expired Dec 31, 2025) — subtract only incentives you have verified: many states and utilities add $500–$3,000 for heat pumps (check DSIRE).

Heat pump vs gas furnace (2026 US averages, 2,000 sq ft home)

Line itemHeat pumpGas furnace (95% AFUE)
Installed cost$7,000–$12,000$4,000–$6,500
Federal credit (25C)$0 — expired Dec 31, 2025—
Cooling included?YesNo (+$3,500–$6,000 AC)
EfficiencyCOP ~3.2 (320%)AFUE 95%
Typical lifespan15–20 years15–25 years

Installed ranges for a 2,000 sq ft home, 2026. Sources: minihomehub.online, jmartiniaq.com, energy.gov (2026).

Worked example: 2,000 sq ft, moderate climate

2,000 sq ft home, moderate climate, $0.17/kWh electricity, $1.40/therm gas:

  1. Heat pump upfront: $6,500 + 2,000 × $2.25 = $11,000 (no federal credit for 2026 installs — 25C expired Dec 31, 2025).
  2. Furnace upfront: $3,500 + 2,000 × $1.50 = $6,500.
  3. Annual heating load: 2,000 × 0.035 = 70 MMBtu.
  4. Heat pump annual: 70 × 293.07 ÷ 3.2 × $0.14 = 6,411 kWh × $0.14 ≈ $898.
  5. Furnace annual: 70 × 10 ÷ 0.95 × $1.60 = 737 therms × $1.60 ≈ $1,179.
  6. 15-year totals: heat pump $11,000 + 15 × $898 = $24,463; furnace $6,500 + 15 × $1,179 = $24,184.

The heat pump costs $4,500 more upfront with no federal credit in 2026 — at these rates the furnace costs about $280 less over 15 years. The heat pump's edge returns where electricity is cheap relative to gas, winters are longer, or state/utility rebates cut the install cost.

Pro tips for the heat pump vs furnace decision

  • Get the furnace + AC combo quote, not just the furnace — that is the comparison the heat pump actually beats.
  • Ask for the heat pump's capacity at 17°F and 5°F, not just its HSPF2 — cold-climate performance lives in those two numbers.
  • In cold zones, price a dual-fuel hybrid too: heat pump for 90% of the winter, gas for the deep-freeze weeks.
  • If your system was completed in 2025, claim the 25C credit on IRS Form 5695 — and check DSIRE for state rebates that stack on top.
  • Cut the load first: attic insulation and air sealing shrink both systems' operating cost, but they shrink the heat pump's more.

How to use the heat pump vs furnace cost calculator

Enter your home's square footage and climate zone, then your actual electricity ($/kWh) and gas ($/therm) rates from a recent bill — the comparison is only as honest as your rates. The calculator prices both installs, models 15 years of heating cost from your climate's heating load, and subtracts no federal credit for 2026 installs (the 25C credit expired Dec 31, 2025).

How the 15-year comparison is calculated

Upfront: heat pump $6,500 + $2.25/sq ft; 95% AFUE gas furnace $3,500 + $1.50/sq ft (2026 mid estimates). Operating: annual heating load by climate zone (mild 0.020, moderate 0.035, cold 0.055 MMBtu/sq ft), heat pump at COP 3.2, furnace at 95% AFUE. The heat pump total includes no federal credit (25C expired Dec 31, 2025). No energy-price escalation is modeled — a documented simplification.

What decides the winner?

Three variables decide it: your electricity-to-gas price ratio, your climate, and whether you need cooling too. Cheap electricity + mild winters = heat pump wins big. Expensive electricity + deep freezes = the furnace closes the gap, and a dual-fuel hybrid becomes the smart play. If your AC is also aging, compare against furnace + AC — the heat pump usually wins outright.

Heat pump vs furnace cost example

2,000 sq ft home, moderate climate, $0.14/kWh electricity, $1.60/therm gas: the heat pump installs at $11,000 (no federal credit for 2026 installs) versus $6,500 for the furnace — and 15-year operating runs about $13,500 for the heat pump versus $17,700 for gas. All-in at these rates, the furnace costs roughly $280 less over 15 years — the expired $2,000 credit used to tip this exact comparison to the heat pump. Where electricity is cheap relative to gas, winters are longer, or state/utility rebates cut the install cost, the heat pump still wins.

When a gas furnace still wins

A furnace can still win when electricity is very expensive (above ~$0.30/kWh with cheap gas), in extreme-cold zones where backup heat runs for months, or when the furnace is a recent install with 15+ years of life left — replacing working equipment early rarely pays. Homes without ductwork also tilt toward ductless mini-splits over either option.

Frequently Asked Questions

Is a heat pump cheaper than a gas furnace over 15 years?+
Usually yes, once operating costs are included. A gas furnace costs $4,000–$7,000 installed versus $7,000–$12,000 for a heat pump in 2026, but the heat pump's 300%+ efficiency (COP ~3.2) versus a furnace's ~95% AFUE means annual heating costs run 30–50% lower in most climates. The $2,000 federal 25C credit that used to close the upfront gap expired at the end of 2025 — for 2026 installs, only state and utility rebates can close it.
What is the honest comparison — furnace alone or furnace plus AC?+
Furnace plus AC. A gas furnace only heats; you still need a separate air conditioner ($3,500–$6,000 installed). A heat pump heats AND cools in one unit, so the fair upfront comparison is heat pump ($7,000–$12,000) versus furnace + AC ($7,500–$13,000) — where the heat pump often wins outright before incentives.
Do heat pumps cost more to run in cold climates?+
They can. Below about 25–30°F a heat pump's efficiency (COP) drops toward 2.0 and backup heat strips may engage, which narrows the operating-cost advantage. In cold climates a dual-fuel setup — heat pump plus gas furnace backup — captures most of the savings while keeping a safety net for deep freezes.
Is there still a $2,000 federal tax credit for heat pumps in 2026?+
No — the 25C energy-efficient home improvement credit (30% of a qualifying heat pump installation, up to $2,000 per year) ended for property placed in service after December 31, 2025. If your system was completed in 2025, you can still claim it on your 2025 return (IRS Form 5695). For 2026 installs, check state and utility rebates instead — many add $500–$3,000 for heat pumps (see DSIRE). Gas furnaces never had an equivalent federal credit.
What electricity and gas prices make a heat pump win?+
The heat pump wins bigger when electricity is cheap relative to gas. A common rule of thumb: if your electricity costs less than about 4× your gas cost per unit of heat delivered, the heat pump saves money annually. At $0.17/kWh electricity and $1.40/therm gas, the heat pump's operating cost is roughly 40% lower.
How long do heat pumps vs furnaces last?+
Heat pumps last 15–20 years; gas furnaces last 15–25 years. Because a heat pump runs year-round (heating + cooling), its compressor sees more hours — budget for replacement around year 15–18, while a furnace that only heats can stretch past 20 with maintenance.

Is it worth it?

~15–25%

Cost recouped at resale (when mentioned in listing)

Homes with heat pumps sell for roughly $2,300–$3,900 more — but only when the system is mentioned in the listing, which happens just 8% of the time. Over 15 years, the heat pump usually wins on operating cost thanks to ~320% efficiency (COP 3.2) versus 95% AFUE. (The $2,000 federal tax credit expired at the end of 2025 and is not part of 2026 math.)

  • ~320% efficiency vs 95% AFUE for gas furnaces
  • Mention it in your listing: the premium only materializes when buyers know
  • State/utility rebates can still cut the upfront cost — the federal credit expired
  • One system handles both heating and cooling

Source: 2025 heat-pump home value study (257 / SECC / NAR); NOVORY 2026 cost dataset

See full 2026 cost statistics

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