Heat Pump Savings Calculator 2026: vs Gas Furnace

Understanding your results

Short answer: A heat pump’s savings in 2026 depend on the fuel it replaces. It cuts heating costs by about two-thirds versus electric resistance at COP 3.0, and usually saves well against propane. Against natural gas at $1.20/therm and the US average 18.19¢/kWh (EIA, July 2026 year-to-date), a COP 3.0 heat pump costs about $462 a year more to run for 800 therms of heat; cheaper electricity, pricier gas or a higher-COP unit flips that. There is no federal heat pump credit in 2026, so rebates come only from states (HEAR, where live) and utilities.

How the savings calculation works: One therm of gas contains about 29.3 kWh of heat. The calculator treats each therm you burn as heat you need, so the heat pump uses therms × 29.3 ÷ COP kWh of electricity. Example with defaults (800 therms, $1.20/therm, $0.182/kWh, COP 3.0): gas costs 800 × $1.20 = $960 a year; the heat pump uses 800 × 29.3 ÷ 3.0 = 7,813 kWh, which costs $1,422 a year. At these prices the heat pump costs about $462 more to run. Because the calculator assumes your furnace turns all its gas into heat, it favors gas slightly; with an older 80%-efficient furnace, enter COP × 1.25 (3.0 → 3.75) and the heat pump cost falls to about $1,138.

The break-even rule: A heat pump is cheaper to run when your electricity rate is below (gas $/therm × COP) ÷ 29.3. At $1.20/therm and COP 3.0 that is about $0.12/kWh, or about $0.15/kWh against an 80% furnace. Higher gas prices, lower electric rates (including heat pump or time-of-use rates) and higher-COP equipment all move the result in the heat pump’s favor.

When heat pumps save the most: Replacing electric baseboard or furnace resistance heat saves about two-thirds of the heating electricity at COP 3.0. Propane and heating oil usually cost more per unit of heat than natural gas, so savings are larger; convert propane to therms (gallons × 0.915) and price per therm (price per gallon ÷ 0.915) to use this calculator. A heat pump also replaces your central AC, so if your AC is due for replacement, compare the extra cost of the heat pump rather than the full price.

Cold climate performance: Modern variable-speed cold-climate heat pumps keep heating well below freezing, and many are rated to operate down to about -13°F, though COP falls in extreme cold. Homeowners in Minnesota, Maine, Wisconsin and other cold states should use a conservative seasonal COP (about 2.5) and plan for backup heat.

Heat pump incentives in 2026: Until December 31, 2025, the federal §25C credit covered 30% of a qualifying heat pump, up to $2,000 a year. The One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025) ended it for property placed in service after that date. The IRA’s state-run HEAR rebates were not repealed: where your state’s program is live, income-qualified households (at or below 150% of area median income) can get up to $8,000 for a heat pump. HOMES performance-based rebates ($2,000–$4,000 or more depending on modeled savings and income) may also apply. Utility rebates are common; check your state energy office and DSIRE. This is not tax advice; confirm with a tax professional.