ManualHarbor

Heat Pump vs. Furnace: Running Costs Compared

Updated October 9, 2026

Which system costs less to run comes down to three numbers: your electricity price, your gas price, and how efficiently each system turns that energy into heat delivered to your rooms. At U.S. average prices (18.19¢/kWh for electricity in January–July 2026, and $15.34 per thousand cubic feet of natural gas in 2025, about $1.48 per therm), a 95% AFUE gas furnace delivers heat for about $15.59 per million Btu. A heat pump averaging a COP of 2.5 delivers the same heat for about $21.32. The answer flips where electricity is cheap relative to gas. With EIA's figures for Florida, Georgia, Louisiana and Washington, a seasonal COP between about 1.7 and 2.4 is enough to beat even a 95% furnace.

The two formulas

Compare the systems on the cost of one million Btu (MMBtu) of heat actually delivered to the house.

  • Heat pump: $ per MMBtu = electricity price ($/kWh) ÷ COP × 293.08 kWh per MMBtu
  • Gas furnace: $ per MMBtu = gas price ($/therm) ÷ AFUE × 10 therms per MMBtu

Where the constants come from:

  • EIA lists 1 kWh as 3,412 Btu, so 1,000,000 Btu ÷ 3,412 = 293.08 kWh.
  • EIA lists 1 therm as 100,000 Btu, so one MMBtu is 10 therms.
  • If your gas is billed per Mcf (thousand cubic feet), convert using EIA's heat content of 1,036 Btu per cubic foot for gas delivered to consumers in 2025. That makes 1 Mcf about 10.36 therms. The national average works out to $15.34 ÷ 10.36 = $1.48 per therm.

What the efficiency numbers mean:

  • COP (coefficient of performance) is the heat delivered divided by the electricity used, with both in the same units. ENERGY STAR defines it at a single set of test conditions. Electric resistance heat, including a heat pump's backup strips, has a COP of 1.0.
  • AFUE (annual fuel utilization efficiency) is the share of the fuel's heat that becomes space heat, according to ENERGY STAR. A DOE Building America guide notes that it excludes the electricity used by the furnace's fan and controls.

These formulas cover energy only. They leave out furnace blower electricity, duct losses (which affect any ducted system), fixed monthly charges and maintenance.

Turning HSPF2 into a seasonal COP

Heat pump spec sheets usually show HSPF2, not COP. HSPF2 is the total heat delivered over a standardized heating season, in Btu, divided by the electricity used over that season, in watt-hours. DOE's test procedure calculates it for the "Region IV" heating climate. Because 1 watt-hour equals 3.412 Btu, you can convert:

Seasonal COP ≈ HSPF2 ÷ 3.412

An NREL presentation states the same relationship (HSPF = 3.41 × seasonal COP), and DOE uses the 3.412 factor to convert between watts and Btu/h. A DOE Building America guide notes that the seasonal rating includes the supplementary electric heat counted in the test.

  • 7.5 — Where this value comes from: Federal minimum, split-system heat pumps (2023 standard); Implied seasonal COP: 2.20
  • 7.8 — Where this value comes from: ENERGY STAR minimum, split systems; Implied seasonal COP: 2.29
  • 8.1 — Where this value comes from: ENERGY STAR cold-climate minimum, ducted; Implied seasonal COP: 2.37
  • 8.7 — Where this value comes from: Median of ENERGY STAR cold-climate ducted split listings (October 2026); Implied seasonal COP: 2.55
  • 10.0 — Where this value comes from: Median of 12,000 Btu/h ENERGY STAR mini/multi-split listings (October 2026); Implied seasonal COP: 2.93

Medians calculated by ManualHarbor from ENERGY STAR's certified heat pump dataset. They are listing-level, not sales-weighted.

Treat these as rating-climate averages. In a colder region, a given heat pump will average a lower COP, and real installations can fall short of their ratings. For cold-weather performance, check the COP at 5°F, which ENERGY STAR lists for certified models. An NREL monitoring presentation found that manufacturer specifications don't always reflect field performance. In NREL's 2023 field study of high-efficiency, variable-capacity ducted heat pumps, mostly in the Northwest, the seasonal compressor-only heating COP averaged 2.5 (range 1.7 to 3.5) across 12 sites. Once backup heat was counted, results were lower at several sites.

Why COP falls in cold weather

A heat pump's efficiency and output both drop as outdoor temperatures fall. Defrost cycles and backup resistance heat pull its seasonal average down further.

  • ENERGY STAR's cold-climate threshold: a certified cold-climate heat pump must deliver a COP of at least 1.75 at 5°F. Its heating capacity at 5°F must also be at least 70% of its capacity at 47°F. Among ENERGY STAR cold-climate ducted split listings, the median reported COP at 5°F is 2.0.
  • Backup heat: in NREL's field study, the electric auxiliary heater operates at a COP of 1. At two sites it cut the seasonal system COP by more than 30%. At four of 12 sites, defrost-related energy topped 20% of compressor heating energy, mainly because backup heat ran during defrost. Manufacturer data for the monitored units showed 5°F capacity at 48% to 68% of 47°F capacity.
  • Field spread: in a DOE Building America study of ductless units in the Northeast, one unit ran at COPs of 1.5–2.0 at −10°F. Another managed only 1.0–1.2 at 0–5°F, a shortfall the researchers linked to a low fan setting, frequent setbacks and higher return-air temperatures.

Any drop in COP raises the cost of each unit of heat. At U.S. average electricity prices, heat at COP 1.75 costs about $30.46 per MMBtu, and resistance heat costs $53.31.

Cost per million Btu at U.S. average prices

  • Gas furnace, 80% AFUE (federal minimum for non-weatherized gas furnaces today) — Efficiency used: 0.80; Cost per MMBtu delivered: $18.51
  • Gas furnace, 95% AFUE (ENERGY STAR minimum, U.S. South) — Efficiency used: 0.95; Cost per MMBtu delivered: $15.59
  • Gas furnace, 97% AFUE (ENERGY STAR minimum, U.S. North) — Efficiency used: 0.97; Cost per MMBtu delivered: $15.26
  • Geothermal heat pump, COP 3.6 (ENERGY STAR closed-loop water-to-air minimum, at rating conditions) — Efficiency used: 3.6; Cost per MMBtu delivered: $14.81
  • Air-source heat pump, COP 3.0 — Efficiency used: 3.0; Cost per MMBtu delivered: $17.77
  • Air-source heat pump, COP 2.55 (HSPF2 8.7) — Efficiency used: 2.55; Cost per MMBtu delivered: $20.91
  • Air-source heat pump, COP 2.5 (NREL field average, compressor only) — Efficiency used: 2.5; Cost per MMBtu delivered: $21.32
  • Air-source heat pump, COP 2.0 — Efficiency used: 2.0; Cost per MMBtu delivered: $26.66
  • Air-source heat pump, COP 1.75 (ENERGY STAR cold-climate floor at 5°F) — Efficiency used: 1.75; Cost per MMBtu delivered: $30.46
  • Electric resistance or backup strips — Efficiency used: 1.0; Cost per MMBtu delivered: $53.31

Inputs: 18.19¢/kWh (EIA, January–July 2026) and $1.48/therm ($15.34/Mcf, EIA 2025, converted at 1,036 Btu/cf). Calculations by ManualHarbor.

Gas prices move during the year. EIA's monthly U.S. average ranged from $13.96 to $16.16 per Mcf between November 2025 and March 2026, about $1.35 to $1.56 per therm. That puts a 95% furnace between roughly $14.18 and $16.42 per MMBtu over the winter. Geothermal ratings are taken at standard test conditions, so real seasonal results depend on the ground loop. Compare models in our geothermal heat pump guides.

The break-even COP

The break-even COP is the seasonal COP a heat pump needs to match a furnace's cost per MMBtu:

Break-even COP = (electricity $/kWh × 293.08 × AFUE) ÷ (gas $/therm × 10)

At U.S. averages, that's 2.88 against an 80% furnace and 3.42 against a 95% furnace. You can also flip the formula to find the electricity price at which a heat pump breaks even. At $1.48 per therm and a 95% furnace, a heat pump with COP 2.5 breaks even at 13.30¢/kWh, and one with COP 3.0 at 15.95¢/kWh.

Prices vary widely by state, so the answer does too:

  • U.S. average — Electricity ¢/kWh (Jan–Jul 2026): 18.19; Gas $/Mcf (2025): 15.34; Gas $/therm: 1.48; 95% furnace $/MMBtu: 15.59; Heat pump at COP 2.5 $/MMBtu: 21.32; Break-even COP vs. 95% furnace: 3.42
  • Florida — Electricity ¢/kWh (Jan–Jul 2026): 15.30; Gas $/Mcf (2025): 25.48; Gas $/therm: 2.46; 95% furnace $/MMBtu: 25.89; Heat pump at COP 2.5 $/MMBtu: 17.94; Break-even COP vs. 95% furnace: 1.73
  • Georgia — Electricity ¢/kWh (Jan–Jul 2026): 15.40; Gas $/Mcf (2025): 20.42; Gas $/therm: 1.97; 95% furnace $/MMBtu: 20.75; Heat pump at COP 2.5 $/MMBtu: 18.05; Break-even COP vs. 95% furnace: 2.18
  • Louisiana — Electricity ¢/kWh (Jan–Jul 2026): 13.35; Gas $/Mcf (2025): 17.39; Gas $/therm: 1.68; 95% furnace $/MMBtu: 17.67; Heat pump at COP 2.5 $/MMBtu: 15.65; Break-even COP vs. 95% furnace: 2.21
  • Washington — Electricity ¢/kWh (Jan–Jul 2026): 14.40; Gas $/Mcf (2025): 17.62; Gas $/therm: 1.70; 95% furnace $/MMBtu: 17.90; Heat pump at COP 2.5 $/MMBtu: 16.88; Break-even COP vs. 95% furnace: 2.36
  • Texas — Electricity ¢/kWh (Jan–Jul 2026): 16.06; Gas $/Mcf (2025): 19.42; Gas $/therm: 1.87; 95% furnace $/MMBtu: 19.73; Heat pump at COP 2.5 $/MMBtu: 18.83; Break-even COP vs. 95% furnace: 2.39
  • Massachusetts — Electricity ¢/kWh (Jan–Jul 2026): 30.14; Gas $/Mcf (2025): 25.06; Gas $/therm: 2.42; 95% furnace $/MMBtu: 25.46; Heat pump at COP 2.5 $/MMBtu: 35.33; Break-even COP vs. 95% furnace: 3.47
  • Pennsylvania — Electricity ¢/kWh (Jan–Jul 2026): 21.04; Gas $/Mcf (2025): 15.04; Gas $/therm: 1.45; 95% furnace $/MMBtu: 15.28; Heat pump at COP 2.5 $/MMBtu: 24.67; Break-even COP vs. 95% furnace: 4.04
  • Minnesota — Electricity ¢/kWh (Jan–Jul 2026): 16.25; Gas $/Mcf (2025): 10.98; Gas $/therm: 1.06; 95% furnace $/MMBtu: 11.16; Heat pump at COP 2.5 $/MMBtu: 19.05; Break-even COP vs. 95% furnace: 4.27
  • New York — Electricity ¢/kWh (Jan–Jul 2026): 29.38; Gas $/Mcf (2025): 17.58; Gas $/therm: 1.70; 95% furnace $/MMBtu: 17.86; Heat pump at COP 2.5 $/MMBtu: 34.44; Break-even COP vs. 95% furnace: 4.82
  • Illinois — Electricity ¢/kWh (Jan–Jul 2026): 19.22; Gas $/Mcf (2025): 11.25; Gas $/therm: 1.09; 95% furnace $/MMBtu: 11.43; Heat pump at COP 2.5 $/MMBtu: 22.53; Break-even COP vs. 95% furnace: 4.93

Prices from EIA (Electric Power Monthly Table 5.6.B; natural gas average residential price by state). Calculations by ManualHarbor. The two price series cover different periods.

Where the break-even COP is below about 2.5, a typical modern heat pump should cost less per unit of heat than even a high-efficiency furnace. For reference, the HSPF2 ratings above imply seasonal COPs of 2.20 to 2.93, and NREL's field average was 2.5. Where it is above 4, gas is cheaper at these average prices, and a heat pump has to earn its keep in other ways, such as replacing a worn-out AC or serving homes that would otherwise use propane, oil or resistance heat. ENERGY STAR describes switching from those fuels as a way to lower bills, and DOE calls heat pumps an efficient option for homes with central propane or oil. These are state averages. Plug in the per-kWh and per-therm charges from your own bills.

Example: one heating season, three price sets

The Illinois Technical Reference Manual assumes a statewide-average 1,821 full-load heating hours for a typical 3-ton (36,000 Btu/h) heat pump. It derived that figure from Illinois gas billing data. That works out to 36,000 × 1,821 = 65.6 MMBtu of delivered heat. The table below applies three sets of prices to that same heat load.

  • 80% AFUE furnace (819 therms) — Illinois prices: $890; U.S. average prices: $1,213; Washington prices: $1,394
  • 95% AFUE furnace (690 therms) — Illinois prices: $749; U.S. average prices: $1,022; Washington prices: $1,174
  • Heat pump, seasonal COP 2.0 (9,607 kWh) — Illinois prices: $1,846; U.S. average prices: $1,747; Washington prices: $1,383
  • Heat pump, seasonal COP 2.5 (7,685 kWh) — Illinois prices: $1,477; U.S. average prices: $1,398; Washington prices: $1,107
  • Heat pump, seasonal COP 3.0 (6,404 kWh) — Illinois prices: $1,231; U.S. average prices: $1,165; Washington prices: $922

Example only. The load assumption comes from the 2019 Illinois TRM v7.0, and prices are from the EIA sources above. Holding the load constant isolates the effect of price.

The same house and the same heat can favor gas by hundreds of dollars or favor the heat pump, depending only on local energy prices.

Dual fuel: let each system run when it's cheaper

ENERGY STAR notes that pairing a heat pump with an existing furnace creates a dual-fuel system, which lets you choose either heat source based on cost. The logic follows from the break-even COP. The heat pump should run whenever its COP at the current outdoor temperature is above your break-even number, and the furnace should take over below it. At U.S. average prices and a 95% furnace, that bar is about 3.4, so the heat pump would mostly handle mild weather. At Washington prices it is about 2.4. A heat pump that stays near that COP into colder weather could carry most of the season there. In a dual-fuel setup, the furnace, rather than electric resistance strips, provides the backup heat. That was the arrangement at the one dual-fuel site in NREL's field study. Ask your installer to set the switchover based on your actual rates and your model's published performance at different temperatures. Revisit the setting when prices change.

Other factors that change the answer

  • Thermostat habits: ENERGY STAR says heat pumps don't save energy from lowering the thermostat while you're away or asleep and recommends a steady setting. DOE warns against manual setbacks that trigger backup resistance heat. A smart thermostat designed for heat pumps can manage recovery.
  • Sizing and backup controls: in NREL's field study, undersizing and backup heat running after defrost or during setback recovery significantly lowered overall heating efficiency at some sites.
  • Fixed charges: if switching to a heat pump would let you drop gas service entirely, the monthly gas customer charge disappears too. The formulas above don't capture that.
  • Cooling: a heat pump also replaces your air conditioner, so compare against the cost of replacing both a furnace and an AC.
  • Rules ahead: the eCFR sets a 95% AFUE minimum for non-weatherized gas furnaces manufactured from December 18, 2028, up from 80% today.

Safety: gas furnaces involve combustion, venting and carbon monoxide risks, and heat pumps contain refrigerant and high-voltage components. Have a licensed HVAC technician handle installation, gas work and repairs, and follow the manufacturer's maintenance instructions. Browse certified models in our heat pump guides and furnace guides.

FAQ

Is a heat pump cheaper to run than a gas furnace?

It depends on the ratio of your electricity price to your gas price. At U.S. averages, a heat pump needs a seasonal COP of about 3.4 to match a 95% furnace, which is hard to reach in cold climates. In states such as Florida, Georgia, Louisiana and Washington, the break-even COP is about 1.7 to 2.4, so a heat pump usually comes out ahead.

Is a heat pump cheaper than electric baseboard heat?

Almost always. Baseboard heat has a COP of 1.0, so any COP above 1 uses less electricity for the same heat. DOE's Energy Saver Guide says heat pumps can cut electricity use for heating by about 50% compared with electric furnaces or baseboard heaters.

At what outdoor temperature should a dual-fuel system switch to gas?

Switch at the temperature where the heat pump's COP falls to your break-even COP. Calculate the break-even COP with the formula above, then find that COP in your model's published performance data. There's no single right temperature, because it depends on your rates and your equipment.

Related guides

Sources