Heat pump vs gas furnace: which is cheaper to run?
You cannot compare a heat pump and a furnace on their efficiency ratings — they are on different scales. Compare them on delivered dollars per million BTU.
"Is a heat pump cheaper to run than gas?" is one of the most consequential HVAC questions, and it has no universal answer — it depends entirely on your local electricity and gas prices and your equipment’s efficiency. What is universal is the method: convert both to delivered dollars per million BTU ($/MMBTU) of usable heat, then compare. This guide shows how.
Why you cannot compare AFUE with COP
A furnace is rated by AFUE (say 95%) and a heat pump by COP or HSPF2 (say COP 3). These are not on the same scale, and the fuels cost different amounts per unit of energy, so the ratings alone tell you nothing about which is cheaper. The only fair comparison normalizes both to the same output unit — a million BTU of heat actually delivered into your home — priced with the fuel you buy.
The delivered-cost formula
For any heating source, delivered cost is the price you pay divided by the usable energy per unit:
$/MMBTU = price ÷ (energy content × efficiency) × 1,000,000
Gas furnace. One therm holds 100,000 BTU. At $1.50/therm and 0.95 AFUE: 1.50 ÷ (100,000 × 0.95) × 1,000,000 = $15.79/MMBTU.
Heat pump. One kWh holds 3,412 BTU. At $0.15/kWh and COP 3: 0.15 ÷ (3,412 × 3) × 1,000,000 = $14.66/MMBTU.
In this example the heat pump is slightly cheaper — but change any input and the answer can flip. Cheap gas or expensive electricity favors the furnace; cheap electricity or a high COP favors the heat pump. The heat-pump-vs-furnace calculator runs this on your rates, and the electric-vs-gas tool does the same comparison directly.
Comparing all the fuels at once
The same formula ranks every heating source on one scale — electric resistance (COP 1), heat pump (your COP), natural gas, propane and heating oil — each on the price you pay:
| Source | Energy content | Formula denominator |
|---|---|---|
| Electric resistance | 3,412 BTU/kWh, COP 1 | price ÷ 3,412 |
| Heat pump | 3,412 BTU/kWh × COP | price ÷ (3,412 × COP) |
| Natural gas | 100,000 BTU/therm × AFUE | price ÷ (100,000 × AFUE) |
| Propane | 91,500 BTU/gal × AFUE | price ÷ (91,500 × AFUE) |
| Heating oil (#2) | 138,500 BTU/gal × AFUE | price ÷ (138,500 × AFUE) |
Electric resistance heat almost always lands at the top (most expensive) because COP 1 wastes the heat pump’s biggest advantage. The $/MMBTU-by-fuel calculator produces this ranked table from your prices.
The temperature catch
There is one wrinkle a single comparison hides: a heat pump’s COP falls as it gets colder, as explained in HSPF2 & COP explained. The $14.66/MMBTU figure above assumes COP 3, which the unit may hit at mild temperatures but not during a deep freeze, where COP might fall to 2 and the delivered cost rises accordingly. That is why many homes use a dual-fuel setup — heat pump most of the time, gas furnace when it turns brutally cold — switching at the outdoor temperature where the two cross over. That crossover is the balance point, and the balance-point calculator finds the COP at which the heat pump stops being the cheaper option on your rates.
Why your neighbor’s answer may not be yours
Because the comparison hinges on local prices, the "right" answer varies enormously by region and even by household. In a place with cheap natural gas and expensive electricity, a gas furnace can win comfortably on running cost; in a place with cheap hydro or solar electricity and pricey delivered propane, a heat pump can win by a wide margin. Two neighbors on the same street can reach different conclusions if one heats with a 96% AFUE gas furnace and the other with an aging 80% one, or if one has a cold-climate heat pump holding COP 3 in winter and the other an older unit sagging to COP 2. This is precisely why the calculators take your rates and your efficiencies rather than shipping a built-in answer — a stored national average would be wrong for almost everyone.
It is also why you should re-run the comparison when your prices change. A shift in the spread between your gas and electricity rates can flip the result, and the $/MMBTU tool makes that a thirty-second check rather than a research project.
Beyond running cost
Running cost is the headline, but not the only factor. A heat pump provides cooling too, so it can replace both a furnace and an air conditioner. Installation cost, available rebates and tax credits (named, not quantified, in the tax-credit guide), local climate and your comfort preferences all weigh in. But start with delivered $/MMBTU on your own rates — it turns a heated debate into a number, and the number is the honest starting point.