Start with the heat your home needs
The useful comparison is dollars per unit of heat delivered, followed by the total cost of owning each system. Comparing the price of a therm with the price of a kilowatthour directly gives a misleading answer because they are different amounts of energy. A cheap gas rate can outweigh a heat pump’s efficiency advantage; a high gas rate can reverse that result.
A heat pump moves heat and also provides summer cooling. A furnace burns fuel and normally needs separate cooling equipment. ENERGY STAR explains these system differences and dual-fuel combinations. Treat the replacement project as a heating-and-cooling decision when your AC is also due for replacement.
An apples-to-apples operating-cost example
The following is an illustrative calculation, not a US average or a quoted bill. Assume the house needs 30 million Btu of useful heat during the comparison period, electricity costs $0.18/kWh, gas costs $1.50/therm, heat pump COP averages 3.0, and furnace AFUE is 95%.
EIA provides the conversion factors: one therm contains 100,000 Btu and one kWh is approximately 3,412 Btu. COP compares heat delivered with electricity consumed in the same energy units; AFUE expresses fuel-to-heat efficiency. The PNNL assessment guide distinguishes these measures.
| Calculation | Heat pump | Gas furnace |
|---|---|---|
| Energy input | 30,000,000 ÷ 3,412 ÷ 3 = 2,931 kWh | 30,000,000 ÷ 100,000 ÷ 0.95 = 315.8 therms |
| Fuel expense | 2,931 × $0.18 = $528 | 315.8 × $1.50 = $474 |
| Difference | About $54 higher | About $54 lower |
At a COP of 2.0, the heat pump result becomes about $791. At a COP of 4.0, it becomes about $396. This sensitivity is why an advertised efficiency number cannot settle the decision. These calculations exclude blower electricity not already represented, fixed utility charges, maintenance, financing, and distribution losses.
Use the heat pump versus gas calculator to substitute your own values. Enter the combined variable supply and delivery rate, rather than only the commodity charge. Do not include a fixed monthly gas fee in the per-therm price and then add it again.
Build the ownership comparison
Request separate quotes for the feasible alternatives. For a household replacing both furnace and AC, compare the complete furnace-plus-AC project with the complete heat pump project. For a household with a healthy furnace, compare the incremental cost of upgrading the failing AC to a heat pump and retaining the furnace.
Create a spreadsheet or paper worksheet with installation cost, expected annual fuel use, maintenance, and a consistent ownership period. Keep financing interest separate from installation price. Treat projected future fuel prices as scenarios rather than forecasts. If you will retain gas for cooking or water heating, switching space heat may not eliminate the gas account’s fixed charge.
For illustration, an extra $2,000 upfront cost with $250 of annual savings has an eight-year simple payback. If savings fall to $100, payback becomes 20 years. Neither result accounts for future repairs, discounting, price changes, or equipment replacement. A result longer than the planned ownership period deserves particular scrutiny.
What changes the recommendation
A mild-winter house with expensive gas differs from a cold-climate house with cheap gas and high electricity rates. Time-of-use rates add another layer: the cost of electricity during cold morning recovery can differ from the monthly average. Ask the designer for heating capacity and efficiency at your area’s design temperature, plus the expected use of backup heat.
Comfort matters too. State your desired indoor temperature and any difficult rooms before sizing. Compare maintenance access, available local service, warranty coverage, and electrical work in the same discussion. The dual-fuel break-even guide explains switching based on fuel cost; the heat pump installation guide explains project scope. The defensible choice is the system that meets the house’s load and budget under realistic assumptions, not the fuel that wins one national headline.