Heat pumps
What a heat pump costs to run, honestly
A heat pump beats propane, heating oil and electric baseboard almost everywhere in the country. Against cheap natural gas it is a close fight, and in the coldest states it loses. Both of those answers come out of the same arithmetic, and this page shows you the one that applies to your house.
Your house
You save a year
$37
$3 a month
A winter of heat
$319
on gas furnace, $356
Extra to buy it
$7,000
never paid back by fuel
15 year position
-$6,449
fuel saved minus the extra cost
What a winter costs this house on every fuel
The same 2,000 square feet in Texas, heated to the same temperature. Only the machine in the basement changes.
Fuel saved against the extra cost
Electricity it uses
2,088 kWh a winter
Gas you stop buying
285 therms a winter
Power would have to cost
$0.17 a kWh
This house needs about 23 million BTU of heat over a Texas winter. Your gas furnace delivers it for $356, at $15.63 a million BTU. A heat pump running at 3.2 to 1 delivers the same heat for $319, at $14.01. Electricity in Texas would have to reach $0.17 a kWh before that flipped.
No tax credit is subtracted anywhere above. Section 25C, which paid up to $2,000 toward a heat pump, ended on December 31, 2025. Some states and utilities still run rebates of their own, and those are worth chasing, so ask your own utility before you sign.
Against a gas furnace, only 21 states win
The same 2,000 square foot house, an 80 percent gas furnace, a heat pump doing what a good one really does over a winter in that climate. Only the state changes. In 21 of 51 the heat pump costs less to run than the furnace, and in the other 30 it costs more. This is the table the industry does not print.
| State | Gas costsa winter | Heat pumpa winter | You savea year |
|---|---|---|---|
| North Carolina | $751 | $519 | $232 |
| South Carolina | $635 | $425 | $210 |
| Alabama | $648 | $446 | $203 |
| Washington | $855 | $659 | $196 |
| Kentucky | $846 | $659 | $187 |
| Georgia | $596 | $419 | $177 |
The six best of 51. Every one of them has cheap electricity, a mild winter, or both.
At the other end, the same house in Alaska costs $2,010 a year more to heat with a heat pump than with the furnace it replaced. That is not a broken machine. It is a cold winter, cheap gas and expensive electricity meeting in one house, and no amount of enthusiasm changes the arithmetic.
Against heating oil it is not close
The same house again, heated by an oil boiler at $3.60 a gallon. Oil carries a lot of energy but it is expensive energy, and a boiler throws away a fifth of it up the flue. These are the states where swapping it for a heat pump saves the most.
| State | Oil costsa winter | Heat pumpa winter | You savea year |
|---|---|---|---|
| North Dakota | $3,072 | $1,290 | $1,782 |
| Wyoming | $2,602 | $1,116 | $1,486 |
| South Dakota | $2,674 | $1,257 | $1,417 |
| Montana | $2,638 | $1,229 | $1,409 |
| Nebraska | $2,204 | $909 | $1,295 |
| Idaho | $2,060 | $804 | $1,256 |
An oil boiler at $3.60 a gallon, throwing about a fifth of what it burns up the flue.
Propane is worse again: it costs more per unit of heat than oil in most of the country, and a propane household usually saves more than an oil one. Electric baseboard is the easiest win on the list, because a heat pump does the same job for roughly a third of the electricity.
The question that decides it is when, not whether
A heat pump bought to replace a furnace that was going to be replaced this year only has to justify the difference between two quotes, which is often a few thousand dollars. The same heat pump bought to replace a furnace with ten good years left has to justify its whole price, and on natural gas it usually cannot. That single fact moves the answer more than the state, the fuel price or the machine.
It is also why the control marked what you would have spent anyway is on this page and on almost no other. Set it to zero and you are asking whether to tear out something that works. Set it to the price of the furnace and air conditioner you were about to buy, and you are asking the real question.
Section 25C, the federal credit that paid up to $2,000 toward a heat pump, ended on December 31, 2025 under the One Big Beautiful Bill. Nothing on this page subtracts it. If a quote or a calculator elsewhere looks two thousand dollars better than this one, check whether that is the reason.
One thing this page does not count in the heat pump column: it cools the house in summer as well. If your air conditioner was also near the end, the heat pump is replacing two machines with one, and the honest place to put that is in what you would have spent anyway.
Questions
- Is a heat pump cheaper than a gas furnace?
- Usually not, on running cost alone, and that is the part most calculators will not tell you. Natural gas is cheap in most of the country, and a heat pump has to beat it using electricity that costs three to four times as much per unit of energy. In mild states with expensive gas it wins. In cold states with cheap gas it loses. Against propane, heating oil or electric baseboard it wins almost everywhere, usually by hundreds of dollars a year.
- Is there still a tax credit for heat pumps in 2026?
- Not a federal one. Section 25C, the credit that paid 30 percent of the cost up to $2,000 for a qualifying heat pump, ended on December 31, 2025 under the One Big Beautiful Bill. There was no phase down. State and utility rebates are separate programs and many of them are still running, so ask your own utility, but any national calculator still taking $2,000 off the price is showing you money that does not exist.
- Do heat pumps work in cold weather?
- Yes, and that is no longer the interesting question. A cold climate model keeps heating well below zero Fahrenheit. What changes with the cold is not whether it works but how well: it produces less heat for each unit of electricity as the outside air gets colder, which is why this page asks what the machine averages over a whole winter rather than what it manages on a mild afternoon.
- Does the heat pump replace the air conditioner too?
- Yes. A heat pump is an air conditioner that can also run backwards, so it cools in summer using the same equipment. This page compares heating only, which is the harder case. If you were about to replace a dying air conditioner as well, add its price to what you would have spent anyway, because the heat pump is buying you both machines at once.
- What size heat pump does a house need?
- That is a contractor calculation, not a web page one. It depends on the heat the house loses on the coldest night of the year, which depends on insulation, windows, air leakage and layout as much as on floor area. What this page sizes is the bill, not the machine: how much heat the house needs over a season, and what it costs to make that heat two different ways.