Heat Pump vs Furnace + AC
A heat pump heats and cools your home with one system, and because it moves heat instead of burning fuel it usually costs less to run. A gas furnace paired with an air conditioner is often cheaper to install but feeds on gas all winter. The real question is whether the heat pump's lower running cost ever pays back its higher install price — and that depends entirely on your energy prices, climate, and incentive.
Your numbers
This isolates the install + running-cost question. It excludes ductwork or electrical-panel changes, financing interest, and climate-specific performance swings — those are too site-specific to model honestly. Enter your real local energy bills for the truest answer.
Heat pump
One system heats and cools. Costs more to install (less any rebate), but usually less to run because it moves heat rather than burning fuel.
Total cost over 15 years
—
Net upfront (after credit)
—
Annual energy
—
Annual running cost (energy + maint)
—
Furnace + AC
Cheaper to install in most homes, but you feed the furnace gas all winter and run a separate AC all summer.
Total cost over 15 years
—
Net upfront price
—
Annual energy
—
Annual running cost (energy + maint)
—
Cumulative cost over time
Why a heat pump usually wins on running cost
A heat pump does two jobs with one box: it heats your home in winter and cools it in summer, so you're not buying and maintaining a separate furnace and air conditioner. That's the convenience win. The bigger win is on the energy bill.
A furnace makes heat by burning fuel — every unit of gas it consumes becomes, at best, one unit of heat. A heat pump doesn't make heat, it moves it: it pulls warmth from the outside air (yes, even cold air holds heat) and pumps it indoors. Because moving heat takes far less energy than creating it, a modern heat pump delivers roughly 2–4 units of heat for every unit of electricity it draws. That efficiency is why, at typical prices, the same comfort costs less to run with a heat pump — and it's the same hardware running in reverse that cools you in summer.
When a furnace still makes sense
The heat pump's running-cost edge isn't guaranteed — it depends on your climate and your prices. A furnace + AC can still be the cheaper call when:
- You're in a very cold climate. A heat pump's efficiency falls as it gets colder, and in deep cold it may lean on backup electric-resistance heat (no better than a space heater). Modern cold-climate heat pumps push that crossover point well below 0°F, but in the harshest winters a furnace's brute-force heat can win.
- Natural gas is cheap and electricity is expensive. Flip the usual price relationship and the heat pump's efficiency advantage shrinks or disappears.
- Your install cost is high. If the home needs electrical-panel upgrades or major ductwork for a heat pump, the upfront gap grows and takes far longer to recover.
What this excludes
This calculator isolates one question: does the heat pump's cheaper running cost pay back its higher install price? So it adds up exactly the net install price and the annual running cost (energy + maintenance) on each side.
It deliberately leaves out a lot: ductwork or electrical-panel changes, climate-specific performance swings, backup electric-resistance heat strips in deep cold, and financing interest. Those are real costs, but they're too site-specific to model without misleading you. The cleanest way to use this is to fold any one-time upgrade work into the install numbers, and to use real local energy bills for the annual figures.
About the incentive
The heat pump tax credit or rebate is the most volatile number on this page. The US federal $2,000 heat-pump tax credit ended for installs after December 31, 2025; what remains are state-run electrification rebates (income-qualified, in participating states) and utility programs. It varies by country, by region, by program, by your income, and by the year — and the rules change often. A system that qualifies this year may not next year, and a buyer who qualifies may have a neighbor who doesn't. We treat it as a plain input for exactly that reason. Verify your own eligibility before you trust any total here, and set the field to 0 if you're not sure you'll get it.
FAQ
Do heat pumps work in cold climates?
Yes — far better than they used to. Modern cold-climate heat pumps keep delivering useful heat down to roughly −15°F, which covers the great majority of populated regions. Older or standard units lose efficiency sooner and lean on backup electric-resistance heat (effectively a space heater) when it gets very cold, which is expensive. If you're in a deep-cold region, make sure you're pricing a cold-climate-rated unit and check its rated performance at your design temperature, not just its mild-weather numbers.
Is the tax credit real?
It depends entirely on your region, the specific program, your income, and the equipment — and the rules change from year to year. There are genuine credits and rebates in many places, but eligibility is narrower than the headlines suggest, and a system that qualifies for one buyer may not for another. Confirm your own eligibility with the actual program before you count on it, and set the credit field to 0 here if you're unsure.
What about a dual-fuel / hybrid setup?
A dual-fuel (or hybrid) system pairs a heat pump with a gas furnace as backup: the heat pump handles most of the year efficiently, and the furnace kicks in only on the coldest days when the heat pump's efficiency drops. It's often the best of both worlds for cold climates — efficient most of the time, with brute-force heat in reserve — but it's two systems, so the upfront cost is higher. If you're weighing it, model it here by raising the install number and nudging the annual energy toward the furnace side for the cold-day share.