Is a heat pump cheaper than gas in Alaska?
West · Very cold (e.g. northern New England, Mountain West, Upper Plains) · EIA residential fuel prices
For a reference 2,000 sq ft home in Alaska (assumed seasonal COP 2, 95% gas furnace), a heat pump costs about $3,026/year to run versus about $1,000/year for natural gas — so a heat pump is about $2,026/yr more than a gas furnace. It is more expensive than propane ($2,644/yr), cheaper than heating oil ($3,329/yr), and far cheaper than electric resistance ($6,052/yr). The cheapest option here is natural gas furnace (95% afue). These are estimates — verify with an HVAC pro.
Source: EIA Electric Power Monthly, Table 5.6.A (residential). Data as of June 2026.
Alaska residential fuel prices
| Fuel | Residential price | Source / period |
|---|---|---|
| Electricity (residential) | 27.17¢/kWh | EIA, March 2026 |
| Natural gas (residential) | $1.25/therm | EIA, March 2026 |
| Heating oil (residential) | $5.156/gal | EIA, West Coast (PADD 5) |
| Propane (residential) | $2.929/gal | EIA, West Coast (PADD 5) |
Source: EIA (electricity, natural gas, heating oil & propane). Data as of June 2026.
Alaska residential natural gas is $12.96/Mcf (about $1.25/therm), EIA March 2026. Heating oil and propane are EIA residential prices for West Coast (PADD 5) (Week ending 2026-03-30) — EIA does not publish these per individual state.
Annual heating cost in Alaska — every system compared
Reference: a 2,000 sq ft home in a very cold (e.g. northern new england, mountain west, upper plains), roughly 76 MMBTU/year of useful heat. Energy cost only (no equipment, install or maintenance):
| Heating system | Annual energy cost | Annual use |
|---|---|---|
| Natural gas furnace (95% AFUE) | $1,000/yr | 800 therms |
| Propane furnace (92% AFUE) | $2,644/yr | 903 gal |
| Heat pump | $3,026/yr | 11,137 kWh |
| Heating oil (85% AFUE) | $3,329/yr | 646 gal |
| Electric resistance (baseboard, COP 1.0) | $6,052/yr | 22,274 kWh |
Source: EIA fuel prices + ENERGY STAR energy conversions. Data as of June 2026.
Cheapest to run in this reference case: Natural gas furnace (95% AFUE). Run your own home size, COP and prices.
Heat pump vs each fuel in Alaska
| Comparison | Heat pump | Other system | Heat-pump result |
|---|---|---|---|
| vs natural gas (95% AFUE) | $3,026 | $1,000 | $2,026/yr more |
| vs propane (92% AFUE) | $3,026 | $2,644 | $382/yr more |
| vs heating oil (85% AFUE) | $3,026 | $3,329 | Saves $303/yr |
| vs electric resistance (COP 1.0) | $3,026 | $6,052 | Saves $3,026/yr |
How Alaska compares with similar states
The five states with the closest electricity price to Alaska, and how heat-pump-vs-gas savings look there:
| State | Electricity ¢/kWh | Heat-pump vs gas (ref. home) |
|---|---|---|
| Alaska (this state) | 27.17¢ | $2,026/yr more |
| New Hampshire | 26.92¢ | $1,357/yr more |
| Maine | 28.32¢ | $1,900/yr more |
| New York | 28.55¢ | $878/yr more |
| District of Columbia | 25.00¢ | $284/yr more |
| Rhode Island | 29.91¢ | $1,122/yr more |
Frequently asked questions
Is a heat pump cheaper to run than gas in Alaska?
Not in this reference case. For a 2,000 sq ft home in Alaska (assumed seasonal COP 2, 95% gas furnace), a heat pump costs about $3,026/year vs about $1,000/year for gas, because Alaska has relatively high electricity prices. A heat pump is still typically cheaper than propane, oil and electric resistance here.
What does it cost to heat a home in Alaska?
Using EIA March 2026 prices and a 2,000 sq ft home in a very cold (e.g. northern new england, mountain west, upper plains) (about 76 MMBTU/yr), estimated annual energy cost is about: heat pump $3,026, natural gas $1,000, propane $2,644, heating oil $3,329, electric resistance $6,052. The cheapest here is natural gas furnace (95% afue).
Is a heat pump cheaper than propane or heating oil in Alaska?
In this reference case, vs propane it runs about $382/year more, and vs heating oil it saves about $303/year. Heat pumps usually beat both delivered fuels comfortably because they deliver far more heat per unit of energy.
How does Alaska rank for heat-pump savings?
On heat-pump savings vs a gas furnace (reference 2,000 sq ft home), Alaska ranks #51 of 51 states (1 = saves the most). This reflects Alaska's mix of 27.17¢/kWh electricity and $1.25/therm gas.
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Sources & accuracy
Electricity: EIA Electric Power Monthly, Table 5.6.A (residential) (March 2026); natural gas: EIA residential price (March 2026); heating oil & propane: EIA Heating Oil and Propane Update (West Coast (PADD 5), Week ending 2026-03-30); energy constants: ENERGY STAR Thermal Energy Conversions. All U.S. public domain. These are statewide/regional averages and the comparison is an estimate, not a quote or engineering analysis. Actual savings depend on your home, climate, equipment and rates. Verify with an HVAC professional. See methodology and disclaimer.
Last updated: 2026-06-29