Heat Pump vs Furnace: Which Costs Less to Run?
Free calculator, browser-only. Sources verified on 2026-09-19. Last updated: 2026-09-19. Written by Y.W. Fung
A heat pump delivers 250-400% efficiency, so it typically costs $80-$150 a month to heat a home against $150-$300 for electric resistance heating. Switching from electric furnace or baseboard heat to a heat pump saves roughly $600-$1,000 a heating season.
At a glance
- What it is: a heat pump moves heat (COP 2.5-4.0); a furnace or baseboard creates it (COP 1.0).
- How much it saves: $600-$1,000 a season over electric resistance heat.
- Payback time: 5-9 years on a $6,000-$9,000 installed system.
Choosing between a heat pump, a gas furnace and a straight electric-resistance furnace is one of the biggest cost decisions a homeowner makes, because the three technologies differ enormously in how much heat they squeeze out of every dollar of fuel. A gas furnace burns fuel directly and loses some of it up the flue. An electric furnace converts electricity to heat at essentially 100% efficiency but electricity is the most expensive way to buy a unit of heat. A heat pump instead moves existing heat from outside air into the house, delivering two to four units of warmth for every unit of electricity it consumes. This guide lays out realistic monthly running costs for a typical 1,800-2,200 sq ft home in a moderate-to-cold climate, so you can weigh upfront installation cost against years of operating savings.
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Why do efficiency ratings decide the bill?
A gas furnace is rated by AFUE (annual fuel utilization efficiency); a 95% AFUE furnace turns 95 cents of every dollar of gas into usable heat, with the rest lost as exhaust. An electric-resistance furnace has no combustion losses at all, converting essentially 100% of electricity into heat, but electricity typically costs three to four times as much per unit of delivered energy as natural gas in most US and UK markets. A heat pump is rated by COP (coefficient of performance) or HSPF, and a COP of 3 means it delivers three units of heat for every unit of electricity it draws, because it is transferring heat rather than generating it. That single number is why a heat pump beats an electric furnace by 60-70% and frequently beats gas as well, especially where gas prices are volatile or the heat pump is paired with a mild climate.
How much does each system cost per month?
For an 1,800-2,200 sq ft home needing roughly 40-60 million BTU of heat over a typical winter, the numbers land in fairly predictable ranges once you plug in typical US rates of $0.16/kWh and $1.20/therm for gas. A cold-climate heat pump with a seasonal COP around 2.8-3.2 lands around $60-$110 a month in the coldest months; a 95% AFUE gas furnace lands around $70-$130 a month; a resistance electric furnace, converting the same electricity dollar-for-dollar with no multiplier, lands around $150-$250. The gap narrows in milder climates, where a heat pump's COP stays higher, and widens in very cold snaps below about 5°F, where older heat pumps lean on backup resistance strips and temporarily behave like the expensive electric furnace they are trying to avoid.
Does a heat pump still work in cold weather?
The main criticism of heat pumps historically was that efficiency collapses in freezing weather, but cold-climate heat pump models sold since roughly 2020 maintain a COP above 2 even at -5°F to -13°F, a huge improvement over units from a decade earlier. Even a good cold-climate unit, however, usually includes electric-resistance backup strips that kick in during defrost cycles or extreme cold snaps, and those strips run at COP 1, the same as a plain electric furnace. If your backup heat runs for more than a small fraction of the season, your effective average cost creeps toward the electric-furnace end of the range, so sizing the heat pump correctly for your climate zone matters as much as the headline efficiency rating.
How fast does a heat pump pay back?
A ducted air-source heat pump for a mid-size home typically installs for $6,000-$14,000 in the US before incentives, compared with $4,000-$7,000 for a new gas furnace or $3,000-$5,000 for a resistance electric furnace, though federal and state incentives in the US (and grants in the UK) can cut heat pump costs by $2,000-$8,000. If a heat pump saves $50-$100 a month over an electric furnace, or $10-$30 a month over gas, that savings adds up to real money over a 15-20 year system life, but a straight gas-to-heat-pump swap in a cheap-gas region can take 8-15 years to pay back the incremental installation cost purely on energy savings alone.
How can you lower heating costs either way?
- Seal air leaks and add attic insulation before upgrading equipment; a leaky envelope wastes savings from any heating system
- Set back the thermostat 5-8°F overnight; heat pumps handle gradual setbacks better than large, abrupt swings
- Have ductwork sealed and balanced; 20-30% of heat is commonly lost through duct leakage in older homes
- Replace furnace filters monthly in heating season to keep airflow and efficiency up
- Use a smart thermostat with heat-pump-aware logic so backup strips do not fire unnecessarily
Which system makes sense for your home?
If you already have gas service and live somewhere gas is cheap relative to electricity, a high-efficiency gas furnace remains a reasonable, lower-upfront-cost choice, especially paired with central AC you already need in summer. If you are all-electric, off gas, or replacing an aging electric furnace, a heat pump is almost always the cheaper long-run option and also gives you efficient cooling in one unit. Run your own numbers with the calculator on this site using your actual local electricity and gas rates rather than relying on national averages, since a 5-cent swing in either rate can flip which system wins.
Typical monthly winter heating cost by system, 1,800-2,200 sq ft home
| System | Efficiency | Mild winter month | Cold winter month | Typical UK equivalent |
|---|---|---|---|---|
| Cold-climate heat pump | COP ~2.8-3.2 | $45 | $110 | £65-£130 |
| 95% AFUE gas furnace | AFUE 95% | $55 | $130 | £90-£160 (boiler) |
| 80% AFUE gas furnace (older) | AFUE 80% | $65 | $150 | £110-£180 |
| Electric-resistance furnace | COP 1.0 | $95 | $250 | £140-£260 |
| Heat pump with heavy backup-strip use | Effective COP ~1.6 | $70 | $190 | £100-£200 |
How much can you save, and how fast?
| Device / change | Cost | Yearly saving | Payback |
|---|---|---|---|
| Heat pump replacing electric baseboard | $7,500 | $600-$1,000 | 7-9 years |
| Mini-split for the main living area only | $3,500 | $350-$550 | 6-8 years |
| Smart thermostat with night setback | $130 | $90-$180 | 9-18 months |
| Attic insulation top-up | $800 | $150-$300 | 3-5 years |
Cost vs savings summary
- Typical spend: $130 (thermostat) to $7,500 (heat pump).
- Typical saving: $90-$1,000 a season depending on the step.
- Net: thermostat pays back in a season; heat pump in 5-9 years.
Frequently asked questions
Is a heat pump cheaper to run than a gas furnace?
- In most climates and at typical US and UK rates, yes, because a heat pump delivers 2-3 units of heat per unit of electricity while gas is burned directly. The gap narrows or can reverse where gas is unusually cheap or in extremely cold, long winters.
Do heat pumps work in freezing temperatures?
- Modern cold-climate heat pumps maintain useful efficiency down to -5°F to -13°F, though they rely on electric backup strips during the coldest snaps, which temporarily raises running cost to electric-furnace levels.
How much does it cost to run an electric furnace per month?
- A typical mid-size US home with an electric-resistance furnace spends roughly $150-$250 a month in cold winter weather at $0.16/kWh, since resistance heat has no efficiency multiplier at all.
Is it worth switching from gas to a heat pump?
- It usually pays back within 8-15 years on energy savings alone, faster with rebates, and it also replaces your air conditioner, so many households find the combined value case stronger than energy savings by themselves.
What COP should I look for in a heat pump?
- Look for a seasonal COP above 2.5 for cold climates and above 3 for mild climates; cold-climate certified models typically list COP at 5°F and -13°F on their spec sheets so you can compare real winter performance.
Key takeaways
- Heat pumps typically cost $60-$110/month to heat an average home; electric furnaces $150-$250
- Gas furnaces land in between at roughly $70-$130/month depending on AFUE and local gas prices
- COP is the number that matters most: higher COP means more heat per electricity dollar
- Backup resistance strips can push a heat pump's effective cost toward electric-furnace levels in extreme cold
- Sealing ducts and insulating the attic often saves more than any equipment swap on its own
Methodology & data sources
Every cost figure here is calculated with kWh = (watts × hours per day) ÷ 1000, multiplied by a regional average electricity price: about $0.16/kWh (US), 26p/kWh (UK), NT$3.5/kWh (Taiwan), HK$1.5/kWh (Hong Kong) and ¥31/kWh (Japan). Appliance wattages are taken from manufacturer nameplate ratings and published energy-label ranges for current models. Real bills vary with climate, insulation, appliance age and tiered or time-of-use tariffs, so we recommend re-running the numbers with the unit rate printed on your own latest bill.
Sources verified on 2026-09-19 - EIA, Ofgem, Energy Star, DOE, CLP Power, Taipower, METI
Last updated: 2026-09-19
Run the numbers for your own home
Enter your local rate, standing charge and appliance hours in the free electricity cost calculator to see your own monthly estimate.
Open the calculatorFAQ - Heat Pump Cost
How much does a 1500W heat pump cost per hour?
- At $0.16/kWh, 1.5 kW × $0.16 = $0.24 per hour.
How much does it cost to run for 8 hours a day?
- $0.24 × 8 hours = $1.92 per day, or $57.60 per month over 30 days.
Does a 1500W heat pump use a lot of electricity?
- At 8 hours per day, it uses 12 kWh daily and 360 kWh monthly. Whether that is a lot depends on usage time and appliance efficiency, so compare the estimate with a plug-in meter or your utility data.
How much does this heat pump cost to run for a year?
- At 8 hours per day and $0.16/kWh, the estimated yearly electricity cost is $700.80 for 365 days. Actual cost changes with the measured wattage, operating time, and local electricity rate.
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