Heat Pump vs Furnace Cost: Which Is Cheaper to Run by State?

Heating 10 min read

By the Plug & Penny editorial team · Published 11 November 2026

At US average prices, heating an average gas-heated home costs about $691 a year with an 80% efficient gas furnace. A heat pump rated 8.5 HSPF2 costs about $799 a year for the same heat, or $66.55 a month averaged over 12 months. To match that furnace, a heat pump needs a seasonal efficiency of COP 2.88. To match a 95% furnace, it needs COP 3.42.

Which system wins depends mostly on your state's electricity and gas prices. The table further down gives the break-even figure for every state.

These national figures use two EIA averages. Electricity is the US residential price of 18.16¢/kWh (EIA, August 2026). Gas is the residential price of $15.34 per thousand cubic feet, or $1.48 per therm (EIA, 2025 annual average). That works out to 5.05¢ per kWh of gas.

Heating cost at US average prices

Every row delivers the same amount of heat: 37.36 MMBtu (million Btu) a year. The section below the table explains where that number comes from.

Prices: electricity 18.16¢/kWh (EIA, August 2026), gas 5.05¢/kWh (EIA, 2025 annual average).

The heat demand comes from EIA's 2020 household energy survey. Homes heated mainly with natural gas used an average of 46.7 MMBtu of energy a year for space heating. EIA measures the fuel delivered to the home, not the heat that reaches the rooms.

To turn fuel into heat, we assumed the gas went through an 80% furnace, the current federal minimum. That gives 37.36 MMBtu of useful heat. Your home may need much more or much less heat than this.

How the math works

One kWh holds 3,412 Btu (EIA). So 37.36 MMBtu × 1,000,000 ÷ 3,412 = 10,950 kWh of heat.

Heat pump: kWh of heat ÷ COP = kWh of electricity. Then kWh × price = cost.

• 10,950 kWh of heat ÷ 2.49 = 4,397 kWh of electricity
• 4,397 kWh × 18.16¢ = $799 a year

Gas furnace: kWh of heat ÷ AFUE = kWh of gas. Then kWh × gas price = cost.

• 10,950 kWh of heat ÷ 0.80 = 13,687 kWh of gas (the original 46.7 MMBtu, or 467 therms)
• 13,687 kWh × 5.05¢ = $691 a year

The quick version needs no heat estimate at all. Divide each price by the system's efficiency to get the cost of one kWh of heat:

• Heat pump at COP 2.49: 18.16¢ ÷ 2.49 = 7.29¢
• 80% furnace: 5.05¢ ÷ 0.80 = 6.31¢

Whichever number is lower wins, whatever size your house is. Turn that around and you get the break-even COP: electricity price × furnace AFUE ÷ gas price. At US averages that is 18.16 × 0.80 ÷ 5.05 = 2.88.

The two prices cover different periods. The electricity price is a single month (August 2026). The gas price is the 2025 annual average, because EIA's monthly gas prices swing a lot with the season. If your own rates differ, use the numbers on your bills.

The efficiency figures that decide the winner

Heat pumps: COP and HSPF2

COP (coefficient of performance) is the units of heat you get out for each unit of electricity you put in. ENERGY STAR says an air-source heat pump can deliver "up to three times more heat energy" than the electricity it uses.

COP changes with the weather. One industry guide puts a good air-source heat pump at COP 3.5–4 in mild weather and COP 2–2.5 near freezing. That is why US labels use a seasonal figure, HSPF2.

ENERGY STAR defines HSPF2 as the total heat delivered over a heating season (in Btu) divided by the electricity used (in Wh). Because 1 Wh is 3.412 Btu, dividing HSPF2 by 3.412 gives a seasonal average COP. On that basis, 7.5 HSPF2 is about COP 2.20, 8.5 about 2.49 and 10.0 about 2.93. That conversion comes from an industry guide, not a DOE or EPA page, but it is plain unit arithmetic.

Key HSPF2 levels:

• 7.5 HSPF2: federal minimum for new split-system heat pumps since 1 January 2023, according to an HVAC trade glossary (6.7 for single-package units).
• 7.8 HSPF2: ENERGY STAR minimum for standard split systems (about COP 2.29).
• 8.1 to 8.5 HSPF2: ENERGY STAR cold-climate minimums (8.1 for ducted, 8.5 for non-ducted).

One catch matters a lot. HSPF2 is calculated on climate data for Region IV, a moderate climate zone. In a colder place, expect a lower real seasonal COP than the label suggests. In a milder place, expect a higher one.

Gas furnaces: AFUE

AFUE is "the percentage of the heat in the incoming fuel which is converted to space heat instead of being lost". An 80% furnace turns 80% of the gas it burns into heat for your home.

• 80% AFUE: current federal minimum, per ACHR News. Non-condensing furnaces generally top out around 80%.
• 95% AFUE: ENERGY STAR minimum for the US South.
• 97% AFUE: ENERGY STAR minimum for the US North. The ENERGY STAR page lists which states fall in each group.

A furnace has one rated efficiency. A heat pump's COP rises and falls with the outdoor temperature. That difference is the whole cold-climate story.

Heat pump vs furnace break-even by state

The table shows the seasonal COP a heat pump needs to cost the same to run as a gas furnace in each state. If your heat pump's real seasonal COP is above that figure, it is cheaper to run. If it is below, gas is cheaper.

Electricity prices are EIA, August 2026. Gas prices are EIA 2025 annual averages, converted to cents per kWh. Six states show 2024 gas prices because EIA has not published 2025 figures for them.

What the state numbers show

We compared each state against the 8.5 HSPF2 heat pump from our example, which runs at a seasonal COP of about 2.49. Every state falls into one of five groups.

1. Heat pump cheaper than even a 95% furnace (break-even vs 95% below 2.49): Arizona, Arkansas, Florida, Georgia, Louisiana, Texas and Washington. Most of these have fairly cheap electricity and pricier gas.

2. Heat pump cheaper than an 80% furnace, but not a 95% one: Alabama, Hawaii, Kentucky, Mississippi, Nevada, North Carolina, Oregon and South Carolina. Mississippi is a near tie with a 95% furnace (2.50). If you already have an old 80% furnace, a heat pump would cost less to run. In all eight states, a 10.0 HSPF2 heat pump (COP 2.93) would also beat a 95% furnace, because the highest break-even here is Kentucky's 2.80.

3. Gas cheaper than a typical 8.5 HSPF2 pump, but close (break-even vs 80% from 2.50 to 2.99): Delaware, Kansas, Massachusetts, Missouri, Nebraska, Oklahoma, Tennessee, Virginia, West Virginia and Wyoming. Oklahoma is a near tie (2.50). A 10.0 HSPF2 heat pump would beat an 80% furnace in all of these except Massachusetts (2.96) and Wyoming (2.98). Against a 95% furnace, gas stays cheaper in all ten.

4. Gas clearly cheaper (break-even vs 80% from 3.00 to 3.99): California, Colorado, Connecticut, District of Columbia, Indiana, Iowa, Maryland, Minnesota, New Hampshire, New York, North Dakota, Ohio, Pennsylvania, Rhode Island, South Dakota, Utah and Vermont. Here a heat pump needs a seasonal COP above any of the HSPF2 conversions in this article just to match an old 80% furnace.

5. Gas well ahead (break-even above 4 even against an 80% furnace): Alaska, Idaho, Illinois, Maine, Michigan, Montana, New Jersey, New Mexico and Wisconsin. That seasonal COP is higher than the average a heat pump reaches over a winter on the HSPF2 conversions above: about 2.2 to 2.9 for 7.5 to 10.0 HSPF2. And because HSPF2 is based on a moderate climate, the real seasonal figure is likely lower still where winters are cold.

To see the gap in cents, take two examples per kWh of heat:

• Wisconsin: 95% furnace 3.73¢ (3.54 ÷ 0.95). Heat pump at COP 2.49 7.80¢ (19.41 ÷ 2.49). Gas costs about half as much.
• Texas: 95% furnace 6.74¢ (6.40 ÷ 0.95). Heat pump at COP 2.49 6.39¢ (15.91 ÷ 2.49). The heat pump is slightly cheaper.

There are two caveats. First, warm states need far less heat. EIA's 2020 survey found homes in hot-humid climates used 11.5 MMBtu for space heating, against 54.0 MMBtu in very cold and cold climates. So the dollar gap is small in the South and large in the North. Second, a heat pump cools as well as heats, so it replaces a central air conditioner too. This article compares heating costs only.

Heat pump vs furnace in a cold climate

A heat pump's COP falls as the outdoor temperature drops, while a furnace keeps its rated efficiency. So the coldest days are where a heat pump costs the most to run. Our sources give no general, model-independent table of COP at each outdoor temperature. It varies by model, so the figures to look at are the ones the cold-climate standards test.

The main test point is 5°F. Here is what one kWh of heat costs at the COPs those standards use, at US average prices:

Prices: electricity 18.16¢/kWh (EIA, August 2026), gas 5.05¢/kWh (EIA, 2025 annual average).

At national average prices, gas is cheaper at 5°F even against the DOE target. That does not decide the whole season, because mild days pull the seasonal average up. In cheap-gas states the cold-weather gap is wider. In Minnesota, a heat pump at COP 1.75 costs 9.83¢ per kWh of heat (17.20 ÷ 1.75), while a 95% furnace costs 3.81¢ (3.62 ÷ 0.95).

What the cold-climate standards actually require:

• ENERGY STAR Cold Climate: at least COP 1.75 at 5°F, and at least 70% of the unit's 47°F heating capacity at 5°F, checked with the unit's own controls. The page lists no requirement at 17°F or −13°F.
• NEEP cold-climate spec (v4.0): also COP 1.75 at 5°F at maximum capacity. Manufacturers report capacity and COP at 47°F, 17°F and 5°F, plus the lowest temperature they list.
• DOE Cold Climate Heat Pump Challenge: a target of COP 2.1–2.4 and full capacity at 5°F for ducted residential units.

Capacity matters as much as COP. Mitsubishi Electric says its Hyper-Heating H2i systems can deliver 100% of rated capacity down to 5°F, with guaranteed operation to −13°F. Its published capacity at −13°F varies by product line, roughly 75–90% depending on model. Check the spec sheet for the exact model you are quoted.

HSPF2 has no test points below 17°F, so two heat pumps with the same HSPF2 can behave very differently at 0°F. In a cold climate, ask for the COP and capacity at 5°F.

What a heat pump costs to run per month

In our example, an 8.5 HSPF2 heat pump uses 4,397 kWh a year to heat the average gas-heated home. At 18.16¢ (EIA, August 2026) that is $799 a year, or $66.55 a month averaged over 12 months.

Real bills do not fall that way. Almost all the cost lands in the heating months, and the coldest months cost the most because COP drops. We have no sourced month-by-month heating profile for US homes, so we cannot honestly split the yearly figure into winter months.

What we can show is the average draw. 4,397 kWh spread over the 8,760 hours in a year is an average of 502 watts. That is not the unit's rated power. It is the year-round average, including summer months with no heating, so the draw while it is actually heating is higher.

The formula is watts × hours ÷ 1,000 = kWh, then kWh × price = cost. At 502 W for 24 hours: 502 × 24 ÷ 1,000 = 12.05 kWh a day. Then 12.05 kWh × 18.16¢ = $2.19 a day.

For a better monthly estimate, use your own data. Take the heating kWh for a winter month from your bill or smart meter and multiply by your price. You can also enter your heat pump's real draw and hours in the calculator above.

Which furnace should you compare against?

If you are replacing a furnace, the fair comparison is with the furnace you would otherwise buy. Today the federal minimum is 80% AFUE. A 95% condensing furnace needs PVC venting and a condensate drain, which can affect installation.

DOE finalized a rule in 2023 that would require 95% AFUE for new non-weatherized gas furnaces, with a compliance date of December 18, 2028. Its status is now disputed. A June 2026 Supreme Court order sent the case back to the D.C. Circuit.

One trade source says the rule is in "legal limbo" and that DOE is weighing a delay to January 1, 2030. Another says the rule remains in force. Check the current position with your installer.

For a new-versus-new decision, the 95% column in the state table is usually the fairer test. If you are deciding whether to keep an existing 80% furnace, use the 80% column.

How to cut the cost

• Use your own prices. Divide your electricity rate by the heat pump's COP, and your gas rate (per kWh) by the furnace's AFUE. The lower result is cheaper to run. Your bills beat state averages.
• Compare higher HSPF2 ratings. Each step up raises the seasonal COP. At US average prices, going from 7.5 to 10.0 HSPF2 cuts the example bill from $904 to $679 a year.
• In cold states, look at the 5°F figures. Ask for COP and capacity at 5°F from the manufacturer's spec sheet or the NEEP listing, not just HSPF2.
• Compare against the right furnace. A heat pump that loses to a 95% furnace may still beat the old 80% unit you already have.
• If you keep gas as backup, your state's break-even COP is the switch point. The heat pump is cheaper while its COP stays above that figure, and the furnace is cheaper below it.
• Get quotes. A heat pump or furnace is a big purchase. Get written quotes from qualified installers, including the rated efficiency and the 5°F performance of the exact model.

Sources

1. Electric Power Monthly, Table 5.6.A (U.S. Energy Information Administration)
2. Natural Gas Prices: Residential Price, annual (U.S. Energy Information Administration)
3. British thermal units (Btu) – U.S. Energy Information Administration
4. Table CE3.1 Annual household site end-use consumption in the United States, 2020 (EIA RECS)
5. Air-Source Heat Pumps (ENERGY STAR)
6. Heat Pump Equipment Key Product Criteria (ENERGY STAR)
7. SEER2 vs HSPF2 Explained 2026: Heat Pump Ratings (GreenCalcs)
8. HSPF and HSPF2 Rating — Heat Pump Heating Efficiency (HVACSolver)
9. What Is HSPF2? Heat Pump Heating Efficiency Explained (HYRE HVAC)
10. Furnaces Key Product Criteria (ENERGY STAR)
11. DOE Issues 95% AFUE Rule For New Gas Furnaces (ACHR News)
12. DOE Efficiency Standards Ahead: The 2028 Furnace Rule and 2029 Water Heater Rule (ServiceMag)
13. A Failed Furnace Does Not Make Condensing Mandatory Before 2028 (Mechanical Mentor)
14. Cold Climate Air Source Heat Pump Specification, Version 4.0 (NEEP)
15. Residential Cold-Climate Heat Pump Technology Challenge (U.S. DOE)
16. Heat Pumps in Extreme Cold Climates (Mitsubishi Electric Trane HVAC US)
17. Mitsubishi Electric H2i Hyper-Heating Inverter brochure (manuals.plus copy)

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