Heat Pump vs Furnace: Which Costs Less to Run?

Is a heat pump really cheaper to run than a gas furnace? At $1.50 per therm and 17 cents per kWh, the two land within about $50 a year of each other. The winner depends on three numbers from your own bills and equipment. This guide shows how to line them up fairly and find your break-even point.

How Do You Compare Heating Costs Fairly?

Convert every option to the cost of one million Btu of heat actually delivered into the home. That common unit is often written as MMBtu. It removes the confusion of comparing therms, gallons, and kilowatt-hours directly.

The method takes three steps. First, find how many fuel units hold one million Btu. Second, multiply by your price per unit. Third, divide by the equipment efficiency to get heat delivered.

The EIA lists the heat content of each fuel. One kWh holds 3,412 Btu, and one therm of natural gas holds 100,000 Btu. A gallon of propane holds 91,452 Btu, and a gallon of heating oil holds 138,500 Btu. Our guide to what a BTU means for heating and cooling covers the unit itself in more depth.

What Do COP, AFUE, and HSPF2 Mean?

AFUE is the share of fuel energy a furnace turns into heat, and COP is heat delivered per unit of electricity. HSPF2 is a seasonal heat pump rating that converts to an average COP.

A 95% AFUE furnace turns 95 percent of the gas into useful heat. A heat pump moves heat from outdoor air, so it delivers more heat than the power it uses. A COP of 3 means three units of heat for each unit of electricity.

Converting HSPF2 to Seasonal COP

ENERGY STAR defines HSPF2 as seasonal Btu of heat divided by watt-hours of electricity. Divide HSPF2 by 3.412 to get a seasonal COP. An HSPF2 of 7.5 equals a seasonal COP of 2.20, and 8.1 equals 2.37.

Use the seasonal COP for annual costs, not the higher COP printed for mild weather. The seasonal figure already blends cold days, mild days, and defrost cycles into one realistic average.

Which Heat Source Costs Less at Example Prices?

At $1.50 per therm and $0.17 per kWh, a 95% gas furnace is cheapest at $15.79 per million Btu. A heat pump with a COP of 3 comes close at $16.61.

The table assumes a home that needs 60 million Btu of delivered heat per year. Your own load depends on climate, house size, and insulation. Improving the building shell lowers that number, and our guide to how much insulation R-value you need explains that side.

The gap against propane and oil is large. A COP 3 heat pump saves about $731 a year over propane and $1,043 over oil at these prices.

What Is the Break-Even COP for a Heat Pump?

The break-even COP is the efficiency where a heat pump matches the furnace cost per million Btu. Divide the resistance heat cost by the furnace cost to find it.

At $0.17 per kWh, resistance heat costs $49.82 per million Btu. Against a 95% gas furnace at $15.79, the break-even COP is 3.16. Against an older 80% gas furnace at $18.75, it drops to 2.66.

Propane and oil set a much lower bar. The break-even COP is 1.73 against propane at $2.50 and 1.47 against oil at $4.00. Nearly any working heat pump clears those levels.

The Break-Even Electricity Price

You can flip the question and solve for the power price instead. With a COP of 3, the heat pump ties 95% gas at $0.162 per kWh. With a seasonal COP of 2.5, the tie point falls to $0.135 per kWh.

The heat pump vs furnace cost calculator runs both break-even numbers from your own rates, AFUE, and COP.

Why Does Cold Weather Raise Heat Pump Costs?

A heat pump works harder to pull heat from colder air, so its COP falls as temperatures drop. Its heating capacity also shrinks, and backup heat may cover the gap.

ENERGY STAR sets a cold climate test at 5F. Qualifying units must reach a COP of at least 1.75 there. They must also keep 70% of their 47F heating capacity. At 5F, a COP of 1.75 costs $28.47 per million Btu at $0.17 per kWh.

That cold-hour cost is still close to propane and well below oil. It is far above 95% gas, though, so frigid hours tilt the math toward the furnace.

Backup Heat and Dual Fuel

Many heat pumps use electric resistance strips as backup, and those run at a COP of 1. Each Btu from the strips costs three times as much as a Btu delivered at a COP of 3.

A dual-fuel system pairs a heat pump with a gas furnace instead. The controls switch to gas below a set outdoor temperature. Set that switch point near the temperature where your heat pump COP falls below your break-even COP.

How Much Do Fuel Prices Change the Answer?

Fuel prices move the break-even COP more than any other input. A small change in the gas or power rate can flip the winner.

Hold electricity at $0.17 and change gas. At $1.00 per therm, 95% gas costs $10.53 per million Btu and the break-even COP climbs to 4.73. At $2.00 per therm, gas costs $21.05 and the break-even COP drops to 2.37.

Now hold gas at $1.50 and change electricity. At $0.12 per kWh, the break-even COP falls to 2.23. At $0.25 per kWh, it rises to 4.64, beyond most heat pumps.

Recent national averages tilt the answer toward the heat pump. EIA reports 18.31 cents per kWh for July 2026 and $24.09 per thousand cubic feet of residential gas for June 2026. That gas price is about $2.33 per therm. A 95% furnace then costs $24.53 per million Btu. A COP 3 heat pump at $0.18 costs $17.58, so the break-even COP drops to about 2.15.

Use your all-in rates, including delivery charges and taxes, divided by the units billed. Winter rates matter most, since that is when the heat runs. Upfront equipment cost and incentives are separate questions this running-cost comparison does not cover.

FAQs About Heat Pump vs Furnace Costs

Sources

This article is general home-energy cost education using example prices, not a quote or installation advice. Your results depend on your local rates, equipment, and climate. Reviewed for accuracy by Prof. Dr. Khalil Mudassar, PhD. Last updated September 27, 2026.