Upfront Cost Comparison (2026)
| Heat pump (ducted) | Gas furnace | |
|---|---|---|
| Equipment + install | $7,500–$15,000 | $4,500–$10,000 |
| Also replaces | Air conditioner (included — it cools too) | Nothing (needs separate AC: +$5,000–$12,000) |
| True comparable cost | $7,500–$15,000 | $9,500–$22,000 (furnace + AC) |
| Federal tax credit (2026 installs) | $0 (25C ended Dec 31, 2025) | $0 (same) |
| Typical lifespan | 15–20 years | 15–20 years (furnace); 12–15 (AC) |
This is the comparison most articles get wrong: a heat pump replaces BOTH heating and cooling. Compare it to furnace + AC, not furnace alone.
Running Cost Comparison
| Factor | Heat pump | Gas furnace |
|---|---|---|
| Efficiency | 200–400% (moves heat; 1 kWh in → 2–4 kWh of heat) | 80–98% AFUE (burns gas) |
| Monthly cost driver | Electricity rate | Gas rate |
| Wins when | Electricity is cheap (<$0.15/kWh), winters mild | Gas is cheap, winters severe (regularly below 0°F) |
Rule of thumb: divide your electricity price ($/kWh) by 3. If the result is below your gas price per therm-equivalent, the heat pump likely costs less to run. (At $0.13/kWh ÷ 3 ≈ $0.043 vs gas at ~$1.20/therm → heat pump wins. At $0.30/kWh in California vs cheap gas → furnace often wins.)
10-Year Total Cost Example
Assumptions: 2,000 sq ft home, moderate climate, $0.15/kWh electricity, $1.30/therm gas.
| Heat pump | Furnace + AC | |
|---|---|---|
| Installed | $11,000 | $16,000 |
| 10-yr energy (est.) | $9,000 | $12,500 |
| 10-yr maintenance | $2,500 | $3,500 |
| 10-year total | ~$22,500 | ~$32,000 |
Illustrative — your rates and climate change everything. Use it to understand the math, not as your budget.
When a Furnace Is the Better Choice
- Natural gas under ~$1/therm and electricity over ~$0.20/kWh
- Regular sub-zero winters (heat pump needs expensive backup heat)
- You already have a young AC unit (don’t replace working equipment early)
- No ductwork and you don’t want mini-splits everywhere (though mini-splits solve this too)
When a Heat Pump Is the Better Choice
- Mild winters (South, coastal West, Mid-Atlantic)
- No gas line to the house (vs. expensive propane/oil)
- You need AC anyway (heat pump = two systems in one)
- Strong state rebates available (check DSIRE — many survived the federal rollback)
The Third Option: Dual Fuel
A heat pump + gas furnace combo ($10,000–$18,000 installed) that burns gas only on the coldest days. Best of both in climates with real winters but high gas prices. Worth pricing if your contractor offers it.
Sources & methodology
Upfront ranges from published 2026 national cost guides (HomeAdvisor, Fixr). Efficiency figures per DOE. Tax-credit status per IRS FS-2025-05.
Disclaimer: Planning figures, not quotes. Energy math is illustrative — model your own rates. Get 3 written local quotes.