Quick answer
At 2026 US-average energy prices, a gas furnace plus central AC and a heat pump cost about the same over 15 years — roughly $33,000–$36,000 for a typical 2,000 sq ft home, with gas slightly ahead. The heat pump wins clearly if you’d otherwise heat with propane, oil or electric baseboards, if your electricity is cheap, if you qualify for rebates, or if going all-electric lets you drop your gas service. Gas wins where electricity is expensive and gas is cheap.
The fastest way to know which side you’re on: divide your electric rate in dollars per kWh by your gas price in dollars per therm. If the result is below about 0.09–0.11, a heat pump heats more cheaply than gas. (Details below.)
Heat pump vs gas furnace at a glance
| Heat pump | Gas furnace (+ central AC) | |
|---|---|---|
| What it does | Heats and cools in one system | Furnace heats; a separate AC cools |
| Installed cost (2,000 sq ft) | $9,500–$16,000 | $9,000–$13,000 for both |
| Heating efficiency | 250–350% (moves heat) | 80–98% (burns fuel) |
| Heating cost per year* | ~$880–$1,060 | ~$780 |
| Lifespan | 12–15 years | Furnace 15–20; AC 12–15 |
| Works in extreme cold | Cold-climate models yes; others need backup | Yes |
| Combustion / CO risk | None | Small, needs a CO alarm |
| Fuel price exposure | Electricity only | Gas and electricity |
*National-average prices (18¢/kWh electricity, $1.50/therm gas), 50 million BTU annual heating load. Full assumptions below.
Upfront cost: heat pump vs gas furnace
The common mistake is comparing a heat pump with a furnace alone. A heat pump replaces both your furnace and your air conditioner, so the fair comparison is heat pump vs furnace plus AC.
| What you’re installing (2,000 sq ft, existing ducts) | Typical installed cost (2026) |
|---|---|
| High-efficiency gas furnace (95–98% AFUE) | $4,000–$6,500 |
| Central AC (15–16 SEER2) | $5,000–$7,000 |
| Gas furnace + central AC together | $9,000–$13,000 |
| Standard heat pump (single/two-stage) | $8,000–$12,000 |
| Variable-speed / cold-climate heat pump | $12,000–$16,000 |
| Dual-fuel (heat pump + gas furnace) | $12,000–$16,000 |
What changes the math:
- Only replacing one piece? If your AC is dying but your furnace is fine, a heat pump in place of the AC (often $1,500–$3,000 more than a new AC) gives you a dual-fuel system without replacing the furnace.
- No existing gas line? Running a new gas line and venting for a furnace can add $1,000–$3,000, favoring a heat pump.
- Electrical upgrades: a heat pump may need a new circuit ($300–$1,000) or occasionally a panel upgrade ($1,500–$4,000).
- Rebates: in 2026 there’s no federal tax credit for either system, and many state and utility rebates apply only to heat pumps. The federal HEAR rebate (up to $8,000) no longer pays to replace a gas furnace since September 2026; it now covers only upgrades from electric heat and new construction. See our heat pump tax credit 2026 guide.
Operating costs: which is cheaper to run?
Our assumptions
- Home: 2,000 sq ft, moderate-to-cold climate (think Ohio, Pennsylvania, Missouri), needing about 50 million BTU of heat per year.
- Electricity: 18¢/kWh, close to EIA’s projected 2026 US residential average of 18.2¢ (EIA).
- Natural gas: $1.50/therm, near the early-2026 US residential average of roughly $1.45/therm (CallMePower, citing EIA).
- Propane: $2.80/gallon.
- Efficiency: 96% AFUE gas furnace; 15 SEER2 AC; standard heat pump with a seasonal heating efficiency (COP) of 2.5 and 16 SEER2 cooling; cold-climate variable-speed heat pump with seasonal COP 3.0 and 20 SEER2.
Yearly running costs
| System | Heating | Cooling | Maintenance | Total per year |
|---|---|---|---|---|
| Gas furnace + central AC | ~$780 | ~$540 | ~$200 | ~$1,520 |
| Standard heat pump | ~$1,055 | ~$485 | ~$150 | ~$1,690 |
| Cold-climate variable-speed heat pump | ~$880 | ~$415 | ~$150 | ~$1,445 |
| Dual-fuel (heat pump + gas backup) | ~$815 | ~$415 | ~$200 | ~$1,430 |
| Propane furnace + central AC | ~$1,595 | ~$540 | ~$200 | ~$2,335 |
At national-average prices, natural gas is slightly cheaper for heating, but a good heat pump makes up most of the gap through cheaper cooling and lower maintenance. Against propane, a heat pump saves about $650–$900 a year.
The break-even rule: will a heat pump heat cheaper than gas where you live?
Use your actual bills:
- Find your electric rate in dollars per kWh (e.g. 0.18).
- Find your gas price in dollars per therm, including delivery charges (e.g. 1.50). If your bill uses CCF, it’s close to one therm per CCF.
- Divide electric rate by gas price. Example: 0.18 ÷ 1.50 = 0.12.
- Compare:
| Your ratio | Heating with a standard heat pump (COP ~2.5) | Heating with a cold-climate heat pump (COP ~3.0) |
|---|---|---|
| Below 0.09 | Cheaper than gas | Cheaper than gas |
| 0.09–0.11 | About the same | Cheaper than gas |
| 0.11–0.13 | Gas cheaper | About the same |
| Above 0.13 | Gas clearly cheaper | Gas cheaper |
Why it works: a therm of gas burned at 96% efficiency delivers about 96,000 BTU. To deliver the same heat, a heat pump with a COP of 2.5 uses about 11.3 kWh, and one with a COP of 3.0 about 9.4 kWh. The break-even ratio is roughly 1 ÷ 11.3 ≈ 0.09 and 1 ÷ 9.4 ≈ 0.11.
This compares heating only. Since the heat pump also cools more efficiently than an older AC, the full-year break-even is a bit more favorable to heat pumps than the table suggests.
15-year total cost of ownership
Adding the install price to 15 years of energy and maintenance shows how close the race is at average prices — and how far ahead a heat pump pulls against propane.
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Totals assume prices stay flat. Electricity prices have been rising faster than gas recently, which favors gas; carbon policies or gas-line charges rising in some states could favor heat pumps. Neither is certain, so use today’s local prices as your baseline.
How the answer changes with your situation
Same home and assumptions, 15-year totals:
| Situation | Gas furnace + AC | Heat pump | Result |
|---|---|---|---|
| US-average prices (18¢/kWh, $1.50/therm) | ~$32,800 | ~$34,900 standard / ~$35,600 cold-climate | Gas ahead by ~$2,000–$2,800 |
| Cheap electricity (13¢/kWh, $1.50/therm) | ~$30,600 | ~$28,400 standard | Heat pump ahead by ~$2,100 |
| Expensive electricity and gas (30¢/kWh, $2.00/therm) | ~$42,100 | ~$48,600 cold-climate | Gas ahead by ~$6,500 |
| State or utility heat pump rebate of ~$3,000, US-average prices | ~$32,800 | ~$32,600 cold-climate | Heat pump ahead by ~$200 (about even) |
| Going all-electric and dropping a ~$20/month gas service charge | ~$36,400 | ~$35,600 cold-climate | Heat pump ahead by ~$800 |
| Replacing propane (not natural gas) | ~$45,000 | ~$34,900 standard | Heat pump ahead by ~$10,100 |
The pattern: local energy prices and rebates decide this, not the technology. The same heat pump is a clear winner in one state and a money-loser in another.
Beyond cost: other differences that matter
Comfort
A gas furnace delivers hot air (around 120–140°F) in short bursts, so rooms warm fast and the system cycles off. A heat pump delivers warm air (around 85–100°F) over long, steady run times. Many people prefer the evenness of a heat pump, especially a variable-speed one; others miss the blast of hot air on a cold morning. Heat pumps also dehumidify well in summer, which a furnace can’t do (your separate AC does that job).
Performance in cold climates
Gas furnaces deliver full output no matter how cold it gets. Standard heat pumps lose capacity below about 25–30°F and rely on backup heat. Modern cold-climate heat pumps keep producing most of their rated heat near 5°F and keep working well below 0°F, though efficiency drops. In very cold areas, a cold-climate model or a dual-fuel setup is the safe choice.
Lifespan and repairs
| Heat pump | Gas furnace | Central AC | |
|---|---|---|---|
| Typical lifespan | 12–15 years | 15–20 years | 12–15 years |
| Runs year-round? | Yes | Winter only | Summer only |
| Common repairs | Capacitors, defrost board, fan motors, refrigerant leaks | Igniter, flame sensor, inducer motor, control board | Capacitors, contactor, refrigerant leaks |
Because a heat pump does both jobs, it wears like an AC that also runs all winter. Over 15 years, expect to replace a heat pump about as often as the AC in a furnace setup, while the furnace itself often lasts longer.
Safety and indoor air
Heat pumps don’t burn anything, so there’s no carbon monoxide risk, no gas line, no flue to maintain. A properly installed and serviced furnace is safe, but it needs combustion venting, an annual check, and CO alarms.
Maintenance
Both benefit from a yearly tune-up (about $100–$200 per visit). A furnace + AC setup is two systems to service; a heat pump is one, though it should ideally be checked before both heating and cooling seasons.
Emissions
A heat pump’s emissions depend on how your electricity is generated. On today’s average US grid, a heat pump typically produces less COâ‚‚ than a gas furnace for the same heat, and the gap grows as the grid adds cleaner power.
Gas service and other appliances
If a furnace is your only gas appliance, switching to a heat pump can let you cancel gas service and its fixed monthly charge. If you keep a gas stove, water heater or dryer, you’ll still pay that charge.
Which should you choose?
| Your situation | Best choice | Why |
|---|---|---|
| Heating with propane, oil or electric baseboards | Heat pump | Saves roughly $600–$1,600 a year on heating |
| No gas line at the house | Heat pump | Avoids the cost of running gas and venting |
| Your AC is dying, furnace still has years left | Heat pump instead of AC (dual-fuel) | Small extra cost; use the heat pump in mild weather, furnace when it’s coldest |
| Replacing both, cheap electricity (ratio under ~0.10) | Heat pump | Lower running costs and one system to maintain |
| Replacing electric-resistance heat, income-qualified with an open HEAR program | Heat pump | Rebates can cut thousands from the price |
| Replacing both, cheap gas and expensive electricity (ratio over ~0.12) | Gas furnace + AC, or dual-fuel | Gas heating is cheaper to run |
| Very cold climate (regular nights below 0°F) | Cold-climate heat pump with backup, or dual-fuel | Reliable heat at the coldest temperatures |
| Furnace is fairly new and AC is fine | Keep what you have | Replace when equipment fails; plan ahead so you’re not choosing in an emergency |
Our take: for most homeowners replacing an AC or heating with anything other than cheap natural gas, a heat pump is the better long-term choice. If you have cheap gas and pricey electricity, a dual-fuel system gives you most of the heat pump’s benefits while letting gas handle the coldest, most expensive hours.
Frequently asked questions
Is a heat pump cheaper to run than a gas furnace?
It depends on local prices. Divide your electric rate (per kWh) by your gas price (per therm). Below about 0.09–0.11, a heat pump heats more cheaply; above that, gas does. At 2026 US averages (about 0.12), gas is slightly cheaper for heating, but a heat pump narrows the gap with cheaper cooling.
Should I replace my gas furnace with a heat pump?
If your furnace still works and gas is cheap, there’s little financial reason to rush. When your AC fails, adding a heat pump (dual-fuel) is often the best value. When both need replacing, compare using your local prices and available rebates.
Do heat pumps work as well as furnaces in cold weather?
Cold-climate heat pumps keep heating effectively well below 0°F, though output and efficiency drop as it gets colder. Standard heat pumps need backup heat below about 25–30°F. A gas furnace delivers full output in any weather.
Which lasts longer, a heat pump or a furnace?
Gas furnaces typically last 15–20 years; heat pumps about 12–15 years, because they run year-round for both heating and cooling.
Is a dual-fuel system worth it?
Often, yes, in cold regions with cheap gas. The heat pump handles mild weather efficiently and the furnace takes over in the coldest hours, usually giving the lowest running cost of any option.
Is there a tax credit for heat pumps or furnaces in 2026?
No federal tax credit applies to either for 2026 installs. Many state and utility rebates apply only to heat pumps; the federal HEAR rebate no longer covers replacing a gas furnace.
Related guides
- Heat Pump Installation Cost in 2026: Real Prices by Home Size and System Type
- Dual-Fuel Hybrid Heat Pump vs All-Electric: Which Saves More?
- Heat Pump vs Central Air Conditioner: What to Install When Your AC Dies
- Do Heat Pumps Work Below 0°F? Data From Cold-Climate Models
- Heat Pump Tax Credit 2026: What Happened to 25C and What Replaced It
- Is a Heat Pump Still Worth It Without the Federal Tax Credit?
Costs are illustrative estimates for a 2,000 sq ft home using 2026 US-average energy prices and assume flat prices over 15 years. Your results will depend on your climate, home, equipment and local rates.