Free HVAC Tool
Heat Pump vs. Gas Furnace Calculator
Compare annual heating costs, IRA federal tax credits, and 10-year total cost for your home size and climate. See exactly when a heat pump pays back the upfront premium.
See HVAC Contractor SoftwareCompare Heat Pump vs. Gas Furnace Costs
Enter your home size, climate, and local energy rates to see annual heating cost, IRA credits, and break-even timeline.
US avg ~$1.20/therm
US avg ~$0.16/kWh
Gas furnace / yr
$630
525 therms
Heat pump / yr
$278
1,738 kWh
IRA credit (heat pump)
$1,950
30% up to $2,000
Break-even
3.3 yrs
10-year total cost (equipment net of IRA credit + operating)
Estimates only. Actual costs depend on insulation, thermostat settings, local utility rates, equipment efficiency, and installation quality. Get a Manual J calculation from a licensed HVAC contractor for accurate sizing and cost projections.
How the calculator works
Annual heating load by climate and home size
The calculator estimates your home's annual heating energy need (BTU/yr) based on square footage and climate zone. Hot climates need far less heating than cold ones — a 2,000 sq ft home in Miami might need 16 million BTU/yr in heating, while the same house in Minnesota needs over 100 million BTU/yr.
Gas furnace cost uses AFUE efficiency
Modern high-efficiency gas furnaces run at 96% AFUE — meaning 96% of the gas burned becomes heat. The calculator converts your annual BTU need into therms consumed, then multiplies by your gas rate. A 96% AFUE furnace wastes only 4 cents of every gas dollar.
Heat pump cost uses HSPF efficiency
HSPF (Heating Seasonal Performance Factor) measures heat pump efficiency across a full season. The calculator uses climate-adjusted HSPF values — mild climates allow higher efficiency (HSPF 10.5) while very cold climates reduce it (HSPF 6.5) as the heat pump works harder against lower outdoor temperatures.
IRA credits reduce the real upfront cost
The Inflation Reduction Act provides a 30% federal tax credit on heat pumps up to $2,000 per year, plus a $600 credit for high-efficiency gas furnaces. The 10-year comparison uses net-of-credit equipment costs to show the true total cost of ownership for each system.
Heat pump vs. gas furnace by climate zone
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Heat Pump vs. Gas Furnace FAQ
Is a heat pump cheaper to run than a gas furnace?
In most climates, yes. Heat pumps move heat rather than generate it, reaching 200–350% efficiency (HSPF 6.5–10.5) vs. a gas furnace's max 96% AFUE. In mild to moderate climates, heat pumps cut heating costs 30–50%. The trade-off depends on your local electricity vs. gas rates.
What is HSPF and why does it matter?
HSPF (Heating Seasonal Performance Factor) measures seasonal heat pump efficiency. HSPF 8 means 8 BTUs of heat per BTU of electricity — equivalent to 235% efficiency. Current federal minimums start at HSPF 8.8 in northern states. Cold-climate models reach HSPF 10–14.
Do heat pumps work in cold climates?
Yes — modern cold-climate heat pumps operate efficiently down to -13°F. Mitsubishi H2i, Bosch IDS, and Daikin Fit maintain full capacity at 5°F. Older models struggled in cold climates but the technology has improved dramatically in the past 5 years.
What is the IRA heat pump tax credit?
The 2022 Inflation Reduction Act provides a 30% federal tax credit on qualifying heat pumps up to $2,000/yr under the 25C Energy Efficient Home Improvement Credit. State HEEHRA rebate programs offer additional upfront rebates up to $8,000 for qualifying households. Gas furnaces get a separate $600 credit.
What is AFUE for gas furnaces?
AFUE (Annual Fuel Utilization Efficiency) measures fuel-to-heat conversion. A 96% AFUE furnace converts 96% of gas burned into heat. Federal minimum in northern states is 90% AFUE. Compare to a heat pump at HSPF 8.5 = ~249% effective efficiency.
How much more does a heat pump cost than a gas furnace?
A heat pump system costs $4,000–$8,000 installed vs. $3,000–$5,500 for a high-efficiency gas furnace. However, a heat pump replaces both your furnace AND air conditioner, so the true cost comparison should account for your eventual AC replacement.
Should I replace my furnace with a heat pump?
Consider a heat pump if: gas rates are above $1.20/therm, electricity is below $0.15/kWh, you're in a moderate or mild climate, your AC also needs replacement, or significant state rebates are available. Stick with gas if you're in a very cold climate with high electricity rates and low gas prices.
What size heat pump do I need?
Roughly 1 ton (12,000 BTU/hr) per 500–600 sq ft in moderate climates. A 2,000 sq ft home typically needs 3.5–4 tons. Always get a Manual J load calculation from a licensed HVAC contractor — oversizing causes short-cycling and humidity problems.
HVAC Contractors: Close More Heat Pump Jobs
SubcontractorHub helps HVAC contractors present IRA savings, compare systems, and close with financing — all on one platform.
Book a Free DemoEstimates for planning purposes only. Actual costs vary by home insulation, thermostat settings, local utility rates, and equipment selection. Consult a licensed HVAC contractor for accurate sizing and cost projections.