Whether a heat pump is cheaper to run than a gas furnace is the single most-asked question in home heating — and the honest answer is it depends on where you live. Against propane, heating oil and electric-resistance heat, a heat pump wins almost everywhere. Against cheap natural gas, it is a genuine contest.
The two numbers that decide it
A heat pump’s running cost is set by your electricity price and its seasonal COP (heat delivered per unit of electricity). A gas furnace’s running cost is set by your gas price and its AFUE (combustion efficiency). Put both on the same useful-heat (BTU) footing and the comparison falls out of one ratio:
| If electricity ÷ gas ratio is… | …then for a COP 2.4 heat pump vs 95% gas furnace |
|---|---|
| Low (cheap power, dear gas) | Heat pump clearly cheaper |
| Around 14–16 | Roughly break-even |
| High (dear power, cheap gas) | Gas furnace cheaper to run |
The ratio is (electricity ¢/kWh) ÷ (gas $/therm). The break-even moves up as the heat pump’s COP rises and down as it falls.
Worked example
A home needing 36 million BTU of heat per winter:
- Gas furnace (95% AFUE) at $1.80/therm: 36,000,000 ÷ 0.95 ÷ 100,000 ≈ 379 therms ≈ $682/yr.
- Heat pump (COP 2.4) at $0.20/kWh: 36,000,000 ÷ (3,412 × 2.4) ≈ 4,396 kWh ≈ $879/yr.
Here gas wins. But drop electricity to $0.13/kWh and the heat pump falls to about $571/yr — now it wins. That is why the state pages and calculator matter: the answer is local.
Where each tends to win
States with high electricity prices and gas service (much of the Northeast and California) often still favour gas on pure running cost. States with moderate or cheap electricity tip toward the heat pump. And anywhere served only by propane or oil — common in rural and Northeastern homes — the heat pump usually wins by a wide margin. See heat pump vs natural gas for the full state spread.
Don’t forget the rest of the picture
Running cost is one input. A heat pump also cools your home in summer, can qualify for the 2026 rebates and tax credits, and cuts carbon. Use the calculator with your own prices, then weigh comfort, cooling and incentives.