Heat pump vs furnace: a gas furnace is usually cheaper to buy and, at current U.S. energy prices, often cheaper to run, while a heat pump costs more up front but also replaces your air conditioner. At average prices, a basic heat pump delivers heat for about $24 per million BTU versus about $14 for a 95% gas furnace, but a high-efficiency heat pump in a mild climate with cheap power can match or beat gas. Against propane, oil or electric resistance heat, however, a heat pump wins almost everywhere.
Below, we compare upfront costs, as well as operating costs by region, comfort, lifespan and rebates, so you can decide which system fits your climate and energy prices. Information checked on November 4, 2026.
Heat pump vs furnace at a glance
| Heat pump | Gas furnace | |
|---|---|---|
| Heats and cools too? | Yes, it replaces the AC too | Heat only, so it needs a separate AC |
| Typical installed cost | $8,000–$15,000 (HomeGuide) | $2,800–$7,500; $4,800 average (Fixr) |
| Heat cost per million BTU at U.S. average prices | About $24 (basic) to $18 (high-efficiency) | About $14 (95% AFUE) to $16 (80% AFUE) |
| Lifespan (HomeGuide) | 10–20 years | 15–30 years |
| Federal HEEHR rebate (formerly HEAR) | Up to $8,000 where launched, but only when replacing electric heat since May 29, 2026 | Not eligible |
Upfront cost: heat pump vs furnace
On price alone, of course, a furnace is cheaper. However, the fair comparison is a heat pump versus a furnace plus a central AC, because the heat pump does both jobs. For example, Angi puts a new furnace and AC together at about $7,500 on average, typically $5,000 to $12,500, while HomeGuide lists an air-source heat pump at $8,000 to $15,000 installed.
| Trane line | Heat pump | Central AC | 80% AFUE furnace |
|---|---|---|---|
| Choice | $8,313–$10,289 | $6,568–$8,544 | $5,093–$5,481 |
| Priority | $9,921–$12,648 | $8,573–$10,671 | $5,530–$5,934 |
| Premier | $12,778–$15,608 | $11,525–$13,669 | $6,000–$6,386 |
Overall, in Trane’s lineup, a heat pump costs more than an AC alone but less than a separate AC and furnace priced as two jobs. Still, if your AC is new and only the furnace failed, a furnace replacement is usually the cheaper fix. For more detail, see our heat pump cost guide and our furnace replacement cost guide for full price ranges.
Operating cost: heat pump vs furnace by region
In general, running costs depend on two things: your local electricity and gas prices, and how efficiently the heat pump works in your climate. Therefore, to compare them, we calculated the cost to deliver one million BTU of heat in each U.S. region.
| Region (power price) | Basic heat pump | High-efficiency heat pump | 95% gas furnace |
|---|---|---|---|
| New England (28.31¢) | $37.71 | $27.66 | $16.38 |
| Middle Atlantic (25.17¢) | $33.53 | $24.59 | $16.38 |
| East North Central (19.60¢) | $26.11 | $19.15 | $10.55 |
| West North Central (15.92¢) | $21.21 | $15.55 | $10.55 |
| South Atlantic (16.04¢) | $21.37 | $15.67 | $14.36 |
| West South Central (15.30¢) | $20.38 | $14.95 | $14.36 |
| Mountain (14.86¢) | $19.80 | $14.52 | $15.34 |
| Pacific, contiguous (25.59¢) | $34.09 | $25.00 | $15.34 |
| U.S. average (18.16¢) | $24.19 | $17.74 | $13.66 |
What the regional numbers mean
In other words, at today’s prices gas heat is cheaper than a basic heat pump in every region. A high-efficiency heat pump, by contrast, roughly ties with gas in the South and beats it in the Mountain region, where electricity is relatively cheap. Meanwhile, in New England, the Middle Atlantic and the Pacific states, high electricity prices keep gas well ahead.
Also keep in mind that a heat pump’s rating is a seasonal average under a standard test. Moreover, its efficiency falls in very cold weather; for instance, ENERGY STAR’s cold-climate certification requires a COP of at least 1.75 at 5°F. For this reason, many cold-climate homes pair a heat pump with a furnace in a dual-fuel system; see dual fuel vs heat pump only.
Compared with propane, oil and electric heat
However, the picture changes completely if you don’t have natural gas. For example, at current EIA prices, propane in a 95% furnace costs about $31 per million BTU, heating oil in an 85% furnace about $53, and an electric furnace about $53. As a result, a heat pump is usually the cheapest option for homes that heat with propane, oil or electric resistance.
Comfort, climate and other differences
- Cooling: first of all, a heat pump also cools, so you avoid buying and maintaining a separate AC.
- Cold climates: modern cold-climate heat pumps keep working below freezing; however, their output and efficiency drop as temperatures fall. Our guide to cold climate heat pumps also explains the details.
- Safety: similarly, a heat pump burns no fuel; therefore, it produces no carbon monoxide, whereas a gas furnace needs CO alarms and annual inspections, CPSC advises.
- Lifespan: finally, HomeGuide gives 10 to 20 years for heat pumps, which run all year,, versus 15 to 30 years for furnaces.
Rebates and tax credits in 2026
- Federal tax credits: ended. The IRS says the Energy Efficient Home Improvement Credit covers only improvements made through December 31, 2025, so neither a heat pump nor a furnace installed in 2026 qualifies.
- HEEHR rebates (formerly HEAR): since May 29, 2026, they pay for a heat pump only when it replaces existing electric equipment, so switching from a gas furnace no longer qualifies for new reservations. However, HOMES and utility rebates may still help; see our heat pump rebates guide.
- Utility rebates: in addition, both may qualify locally, so check the ENERGY STAR rebate finder.
Heat pump vs furnace: which should you choose?
- Choose a heat pump if you also need a new AC, don’t have natural gas, heat with propane, oil or electric baseboard, or live where electricity is cheap and winters are mild.
- Choose a gas furnace, on the other hand, if gas is cheap, electricity is expensive, your AC is still in good shape or you live where winters are long and very cold.
- Consider dual fuel, finally, if you want heat pump efficiency in mild weather and gas backup on the coldest days.
Related guides: Before you collect quotes, also read our guide on Manual J load calculations. To compare running costs with your own fuel use, try our heat pump vs furnace cost calculator.
More in this section:
- Heat pump vs central AC
- Mini-split vs central air
- Heat pump vs propane
- Heat pump vs oil heat
- Heat pump vs baseboard heat
- Geothermal vs air-source heat pumps
- Whether to repair or replace your HVAC
- Boiler vs furnace
Heat pump vs furnace FAQ
Is a heat pump cheaper to run than a gas furnace?
Not at average U.S. prices, because our calculation shows about $24 per million BTU for a basic heat pump versus about $14 for a 95% gas furnace. However, a high-efficiency heat pump can compete where electricity is cheap and winters are mild.
Can a heat pump replace a furnace in a cold climate?
Yes, especially a cold-climate model. Still, running costs rise in very cold weather, so many cold-climate homes keep a furnace as backup.
Which lasts longer, a heat pump or a furnace?
Usually the furnace, since HomeGuide gives 15 to 30 years for furnaces and 10 to 20 years for heat pumps.
Sources and review
Sources: HomeGuide, AC replacement cost (heat pump and HVAC system costs) (July 25, 2025); HomeGuide, new HVAC system cost (lifespans) (August 27, 2025); Fixr, furnace replacement cost (January 28, 2026); Angi, new furnace and AC cost (2026 data); Trane, 2026 HVAC replacement cost guide; EIA, Electric Power Monthly, Table 5.6.A (August 2026 data, preliminary); EIA, Winter Fuels Outlook 2026–27 (October 6, 2026); EIA, Heating Oil and Propane Update (October 28, 2026); EIA, British thermal units; ENERGY STAR, central AC and heat pump specification, version 6.2; IRS, Energy Efficient Home Improvement Credit; DOE Program Notice 26-2 (HEEHR) (effective May 29, 2026); CPSC, winter heating safety tips (January 23, 2026); ENERGY STAR rebate finder. All checked on November 4, 2026.
Written by: HVAC Switch. Last updated: November 4, 2026. Read our editorial policy to learn how we research prices, or contact us if you spot an error.