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Heat Pump vs. Gas Furnace Savings Calculator

Compare heat pump vs. gas furnace operating costs based on your local utility rates and climate.

Heat Pump Savings Calculator

Estimate annual savings vs. your current heating system · Free

Your total annual heating spend (gas, oil, or electric)

Why Use This Tool?

The decision between a heat pump and a gas furnace is largely a math problem — and the answer depends entirely on your local gas and electricity prices. This calculator does the math so you can make an informed upgrade decision, including the payback period for the IRA tax credit.

About This Tool

Heat pumps deliver 2–4 units of heat per unit of electricity consumed. Gas furnaces deliver about 0.8–0.97 units of heat per unit of gas energy (80–97% efficiency). The economic comparison depends on your local electricity and gas rates. This calculator factors in system efficiency, local utility rates, and climate zone to estimate annual savings.

How It Works

1
Enter your current heating system type and efficiency

Your existing furnace efficiency (AFUE rating) is on the unit or in your owner’s manual. Common values: 80%, 90%, 96%.

2
Enter your local utility rates

Check your utility bill for your electricity rate ($/kWh) and gas rate ($/therm or $/CCF). These vary significantly by region and are the biggest factor in the comparison.

3
Select your climate zone

Heating hours per year vary dramatically by location — Miami needs 200 heating hours annually; Minneapolis needs 5,000+. Climate zone determines how much of the year your heating system runs.

4
Review your annual savings estimate

The calculator shows annual operating cost for both systems, estimated annual savings, and payback period on the heat pump premium after IRA credit.

Cost Context

Heat pump installation runs $5,000–12,000, but IRA credits reduce this by up to $2,000. Annual operating savings of $300–$900/year vs. gas furnaces are common in moderate climates, producing a 6–10 year payback on the upgrade premium. In climates with low electricity rates, savings are even greater.

Frequently Asked Questions

Are heat pumps cheaper to run than gas furnaces?
In most US climates at current utility rates, yes. Heat pumps deliver 2–4x more heat per dollar of energy than gas furnaces. The comparison is closest in regions with high electricity rates (Northeast, California) and cheap natural gas.
How much does it cost to run a heat pump vs. gas furnace?
For a 2,000 sq ft home in a moderate climate (Dallas), typical annual heating costs: gas furnace at $600–$900/year; heat pump at $350–$600/year. In colder climates (Minneapolis), gas furnaces may be cost-competitive with standard heat pumps, though cold-climate heat pumps close this gap.
What is the IRA heat pump tax credit?
The Inflation Reduction Act provides a 30% federal tax credit on qualifying heat pump installations, up to $2,000 per year. Combined with utility rebates available in many areas, total incentives can reach $4,000–$6,000 in some states.
Will a heat pump work in my climate?
Modern cold-climate heat pumps (Mitsubishi Hyper-Heat, Bosch IDS, Daikin Aurora) work effectively down to -13°F. For climates that regularly see sub-0°F temperatures, a dual-fuel system (heat pump + gas backup) provides the best combination of efficiency and reliability.

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