Heat pump vs gas furnace: which costs less to run?
It depends on two prices and two efficiencies. The formula, a worked comparison at 2026 U.S. average prices, and how to run it with your own bills.
Published 7 min read
In short
Compare the cost of one million Btu of heat delivered to the house: the electricity price divided by the heat pump's efficiency, against the gas price divided by the furnace's AFUE.
At U.S. average residential prices for January 2026 (17.45 cents per kWh and $13.96 per thousand cubic feet of gas), a heat pump at the federal minimum seasonal efficiency delivered heat for about $23 per million Btu, against about $14 to $17 for a gas furnace. Electric resistance heat cost about $51.
The answer changes with local prices. With the same efficiencies, the heat pump came out cheaper wherever electricity cost less than roughly 11 to 14 cents per kWh at that gas price.
Most arguments about heat pump running costs skip the arithmetic. It is short. Heat is bought as electricity or as gas, turned into warmth at some efficiency, and the question is which route costs less for the same amount of heat in the house.
What is the formula?
Put both on the same footing: the cost of one million British thermal units (MMBtu) of heat delivered indoors.
- Heat pump: electricity price per kWh × 293.07 kWh ÷ the heat pump’s coefficient of performance (COP).
- Gas furnace: gas price per therm × 10 ÷ the furnace’s AFUE.
The constants are unit conversions. One kWh is 3,412 Btu, so one million Btu is 293.07 kWh. One therm is 100,000 Btu, so ten therms make a million. AFUE is written as a fraction here: 95% is 0.95.
If your gas bill is in dollars per thousand cubic feet (Mcf), EIA’s conversion for 2025 is 1,000 cubic feet = 1.037 MMBtu = 10.37 therms. Divide the price per Mcf by 10.37 to get the price per therm.
What does the comparison look like at 2026 average prices?
The table uses EIA’s U.S. average residential prices for January 2026: 17.45 cents per kWh for electricity (preliminary) and $13.96 per thousand cubic feet for natural gas, which is $1.346 per therm. The efficiencies are reference points from federal standards and ENERGY STAR, not measurements of any particular home:
| Heating equipment | Efficiency used | Where the figure comes from | Cost per MMBtu delivered |
|---|---|---|---|
| Electric resistance (baseboard, furnace strips) | COP 1.0 | By definition | $51.14 |
| Cold-climate heat pump at 5 °F (−15 °C) | COP 1.75 | ENERGY STAR Cold Climate minimum at 5 °F | $29.22 |
| Heat pump at the federal minimum | Seasonal COP 2.20 | HSPF2 7.5, the federal minimum for split heat pumps | $23.27 |
| ENERGY STAR cold-climate heat pump, ducted | Seasonal COP 2.37 | HSPF2 8.1 | $21.54 |
| ENERGY STAR cold-climate heat pump, ductless | Seasonal COP 2.49 | HSPF2 8.5 | $20.53 |
| Non-condensing gas furnace | AFUE 80% | Federal minimum for non-weatherized gas furnaces made since November 19, 2015 | $16.83 |
| Condensing gas furnace | AFUE 95% | Level DOE describes condensing furnaces reaching | $14.17 |
The seasonal COP is the HSPF2 rating divided by 3.412, which turns Btu per watt-hour into a plain ratio. It is an average over a standardized heating season, not your climate’s.
February 2026 prices tell the same story: 17.65 cents per kWh and $14.95 per Mcf, giving $23.53 for the heat pump at HSPF2 7.5 and $15.18 for a 95% furnace.
Three things stand out:
- At national average prices, gas was the cheaper way to buy heat in those months, even against an efficient heat pump.
- A heat pump roughly halves the cost of electric resistance heat. For a home heated with baseboards or an electric furnace, the comparison is not close.
- The gap depends on prices more than on equipment. Moving from the federal minimum heat pump to an ENERGY STAR cold-climate model saves about $3 per MMBtu here; a difference in local electricity price can move the result far more.
At what electricity price does a heat pump win?
Rearrange the formula to find the electricity price at which both options cost the same:
break-even price per kWh = (gas price per therm × 10 ÷ AFUE) × COP ÷ 293.07
At January 2026’s average gas price:
| Heat pump seasonal COP | Against an 80% furnace | Against a 95% furnace |
|---|---|---|
| 2.20 (HSPF2 7.5) | 12.6 ¢/kWh | 10.6 ¢/kWh |
| 2.49 (HSPF2 8.5) | 14.3 ¢/kWh | 12.0 ¢/kWh |
Below these electricity prices, the heat pump delivered heat for less; above them, the furnace did. The national average, 17.45 cents, was above all four.
Prices vary widely by state. In EIA’s July 2026 figures, the most recent month by state, residential electricity ranged from 14.71 cents per kWh in Washington to 30.49 cents in Massachusetts among the states we checked. Gas prices vary as much. That spread is why the same heat pump can be the cheaper choice in one state and the more expensive one in another.
What if I heat with propane or heating oil?
The same method works for any fuel: price per unit, divided by the unit’s heat content, divided by the equipment’s efficiency. EIA’s conversion factors are 91,452 Btu per gallon of propane and 138,500 Btu per gallon of heating oil.
EIA collects residential propane and heating oil prices weekly during the heating season, October through March. Its last reading of the 2025–26 season, for the week of March 30, 2026, put the U.S. average at $2.674 a gallon for propane and $5.535 a gallon for heating oil. Compared with EIA’s average residential electricity price for March 2026, 18.56 cents per kWh:
| Heating equipment, March 2026 prices | Efficiency used | Cost per MMBtu delivered |
|---|---|---|
| Electric resistance | COP 1.0 | $54.39 |
| Oil furnace | AFUE 82%, the federal minimum for non-weatherized oil furnaces | $48.74 |
| Propane furnace | AFUE 80% | $36.55 |
| Propane furnace | AFUE 95% | $30.78 |
| Heat pump | Seasonal COP 2.20 (HSPF2 7.5) | $24.75 |
| Heat pump | Seasonal COP 2.49 (HSPF2 8.5) | $21.84 |
At those prices, a heat pump at the federal minimum delivered heat for about half the cost of an oil furnace and for less than a propane furnace, even a condensing one. These are single-week national averages at the end of the season; propane and heating oil prices vary by region and through the winter, so use your own delivery price.
How do I run this with my own bills?
- Electricity: take the total of a winter electric bill, including delivery charges, and divide by the kWh used. That is your effective price per kWh.
- Gas: do the same with a winter gas bill, in dollars per therm. Convert from Ccf or Mcf if needed.
- Efficiencies: use the furnace’s AFUE from its label or documentation, and the heat pump’s HSPF2 divided by 3.412 for a seasonal COP. For a cold climate, look at the heat pump’s COP at 5 °F (−15 °C) as well: it shows how much the advantage narrows on the coldest days.
- Compare the two costs per MMBtu, or check your electricity price against the break-even formula.
Use the full price per unit, not just the energy charge. Fixed monthly charges are the exception: if you would keep the gas connection anyway, for a stove or water heater, its fixed fee does not change with the heating choice.
What does the formula leave out?
- Real-world efficiency. Ratings come from a laboratory test. Sizing, ductwork, refrigerant charge and controls change what a system achieves at home. A heat pump that runs on auxiliary heat strips for long periods has a much lower effective COP.
- Cooling. A heat pump also air-conditions the home. If you would otherwise need a separate air conditioner, that changes the comparison of what each option costs to buy and install.
- Price changes. Gas and electricity prices move with seasons and markets. EIA’s average residential gas price rose from $13.96 per Mcf in January 2026 to $24.09 in June, when little gas is used for heating; winter prices are the ones that matter for this comparison.
- Dual fuel. Some homes use a heat pump in mild weather and a furnace in the cold, switching at the outdoor temperature where the cheaper option changes.
The method stays the same whatever the prices do: cost per unit of energy, divided by efficiency, for the same amount of heat.
Questions
- Is a heat pump cheaper to run than a gas furnace?
- Not everywhere. At U.S. average prices for January 2026, a gas furnace delivered heat for less than a heat pump at the federal minimum seasonal efficiency. Where electricity is cheap relative to gas, or the heat pump is more efficient in your climate, the heat pump wins. Run the formula with your own prices.
- Is a heat pump cheaper to run than electric baseboard or an electric furnace?
- Yes, whenever its coefficient of performance is above 1. Resistance heat has a COP of 1, so a heat pump with a seasonal COP of about 2.2, the federal minimum for split systems, uses less than half the electricity for the same heat.
- How do I convert my gas bill to dollars per therm?
- If your bill is in dollars per thousand cubic feet (Mcf), divide by 10.37, EIA's conversion for 2025 average gas. If it is in dollars per hundred cubic feet (Ccf), divide by 1.037. If it is already in therms, no conversion is needed.
- Why do my results differ from the averages here?
- Because prices differ widely between states and months, and a heat pump's real efficiency depends on your climate, the installation and how it is controlled. The averages here show the method, not your bill.
Sources
- U.S. EIA — Electric Power Monthly, Table 5.3: Average Price of Electricity to Ultimate Customers (release of September 24, 2026)
- U.S. EIA — Electric Power Monthly, Table 5.6.A: Average Price of Electricity by State
- U.S. EIA — Natural Gas Prices (monthly)
- U.S. EIA — What are Ccf, Mcf, Btu and therms? How do I convert natural gas prices?
- Federal Register — Energy Conservation Standards for Consumer Furnaces (2023-25514)
- U.S. DOE — 2023 Energy Conservation Standards for Residential Central Air Conditioners and Heat Pumps: FAQ
- ENERGY STAR — Central Air Conditioner and Heat Pump Specification, Version 6.2 (Rev. March 2025)
- U.S. EIA — Heating Oil and Propane Update (week of March 30, 2026)
- U.S. EIA — British thermal units (Btu): sample conversion factors