Is a heat pump cheaper than gas in Arizona?
West · Hot / mild (e.g. Gulf South, Southwest) · EIA residential fuel prices
For a reference 2,000 sq ft home in Arizona (assumed seasonal COP 3.2, 95% gas furnace), a heat pump costs about $228/year to run versus about $320/year for natural gas — so a heat pump is cheaper to run than a gas furnace by about $91/yr. It is cheaper than propane ($557/yr), cheaper than heating oil ($701/yr), and far cheaper than electric resistance ($731/yr). The cheapest option here is heat pump. These are estimates — verify with an HVAC pro.
Source: EIA Electric Power Monthly, Table 5.6.A (residential). Data as of June 2026.
Arizona residential fuel prices
| Fuel | Residential price | Source / period |
|---|---|---|
| Electricity (residential) | 15.59¢/kWh | EIA, March 2026 |
| Natural gas (residential) | $1.899/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.
Arizona residential natural gas is $19.69/Mcf (about $1.899/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 Arizona — every system compared
Reference: a 2,000 sq ft home in a hot / mild (e.g. gulf south, southwest), roughly 16 MMBTU/year of useful heat. Energy cost only (no equipment, install or maintenance):
| Heating system | Annual energy cost | Annual use |
|---|---|---|
| Heat pump | $228/yr | 1,465 kWh |
| Natural gas furnace (95% AFUE) | $320/yr | 168 therms |
| Propane furnace (92% AFUE) | $557/yr | 190 gal |
| Heating oil (85% AFUE) | $701/yr | 136 gal |
| Electric resistance (baseboard, COP 1.0) | $731/yr | 4,689 kWh |
Source: EIA fuel prices + ENERGY STAR energy conversions. Data as of June 2026.
Cheapest to run in this reference case: Heat pump. Run your own home size, COP and prices.
Heat pump vs each fuel in Arizona
| Comparison | Heat pump | Other system | Heat-pump result |
|---|---|---|---|
| vs natural gas (95% AFUE) | $228 | $320 | Saves $91/yr |
| vs propane (92% AFUE) | $228 | $557 | Saves $328/yr |
| vs heating oil (85% AFUE) | $228 | $701 | Saves $472/yr |
| vs electric resistance (COP 1.0) | $228 | $731 | Saves $503/yr |
How Arizona compares with similar states
The five states with the closest electricity price to Arizona, and how heat-pump-vs-gas savings look there:
| State | Electricity ¢/kWh | Heat-pump vs gas (ref. home) |
|---|---|---|
| Arizona (this state) | 15.59¢ | Saves $91/yr |
| Kansas | 15.34¢ | $10/yr more |
| North Carolina | 16.00¢ | $9/yr more |
| Minnesota | 15.08¢ | $574/yr more |
| Tennessee | 15.08¢ | $0/yr more |
| Georgia | 15.01¢ | Saves $79/yr |
Frequently asked questions
Is a heat pump cheaper to run than gas in Arizona?
Yes, in this reference case. For a 2,000 sq ft home in Arizona (assumed seasonal COP 3.2, 95% gas furnace), a heat pump costs about $228/year vs about $320/year for gas - a saving of roughly $91/year. Your result depends on your home, equipment and the actual winter.
What does it cost to heat a home in Arizona?
Using EIA March 2026 prices and a 2,000 sq ft home in a hot / mild (e.g. gulf south, southwest) (about 16 MMBTU/yr), estimated annual energy cost is about: heat pump $228, natural gas $320, propane $557, heating oil $701, electric resistance $731. The cheapest here is heat pump.
Is a heat pump cheaper than propane or heating oil in Arizona?
In this reference case, vs propane a heat pump saves about $328/year, and vs heating oil it saves about $472/year. Heat pumps usually beat both delivered fuels comfortably because they deliver far more heat per unit of energy.
How does Arizona rank for heat-pump savings?
On heat-pump savings vs a gas furnace (reference 2,000 sq ft home), Arizona ranks #6 of 51 states (1 = saves the most). This reflects Arizona's mix of 15.59¢/kWh electricity and $1.899/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