Data approachEIA rates · NREL sun hours · 2026 federal policy · methodology
Last updated: September 29, 2026. Prices and incentives change often; verify current figures with your utility and state energy office before you buy.
Quick answer: A heat pump costs less to run than a gas furnace when your electricity price (¢/kWh) is below roughly 0.9 to 1.0 times your gas price ($/Mcf). At the U.S. residential average of 18.34¢/kWh in June 2026, the two options are close nationally, so your utility rates, climate, and existing equipment decide the winner. Also note: the federal 25C heat pump tax credit expired on December 31, 2025, so many older guides now overstate the savings.
This guide uses published data from the U.S. Energy Information Administration (EIA), the Department of Energy (DOE), ENERGY STAR, the IRS, and Angi’s 2026 cost data. Where we calculate a number ourselves, we show the assumptions so you can rerun it with your own bills.
💰 System Cost
Upfront Cost: Heat Pump vs Gas Furnace Installation in 2026
Angi’s 2026 pricing data, drawn from thousands of verified projects, shows how far apart typical furnace and heat pump quotes are before any rebates.
Data visualization
Chart 1: Installed cost, gas furnace vs air-source heat pump. The national average is $4,814 for a furnace and $6,088 for a heat pump. Source: Angi 2026 cost guides.
Chart summary: A heat pump typically costs about $1,300 more than a gas furnace by itself, based on the two national averages. That comparison is incomplete, because a heat pump also cools your home. If you would otherwise buy a furnace and a new central air conditioner, compare the heat pump against the combined price of both.
Three project details can change your quote:
Electrical capacity. Some homes with 100-amp service need a subpanel or a 200-amp upgrade; $1,500–$4,000 is a commonly cited range.
Ductwork. If your home has no existing ducts, new ductwork can add $2,000–$12,000. Ductless mini-splits avoid this.
Gas service. A furnace needs a gas connection and venting; a home without gas lines faces extra cost.
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⚡ Operating Cost
Running Costs: Your Electricity-to-Gas Price Ratio Decides
A heat pump moves heat instead of burning fuel. Its efficiency is measured as a coefficient of performance (COP): the units of heat delivered per unit of electricity used. The DOE says modern air-source heat pumps can cut electricity use by about 50% compared with electric furnaces and baseboard heaters. That is a comparison with electric resistance heating, not with gas.
Against gas, what matters is price per unit of heat. To compare fairly, we converted both fuels to cost per million Btu (MMBtu) of heat delivered into your home, using 1 kWh = 3,412 Btu and 1 Mcf of gas ≈ 1.036 MMBtu.
Method: heat pump cost = 293.07 kWh × price ÷ COP; gas cost = price ÷ 1.036 ÷ AFUE (1 kWh = 3,412 Btu; 1 Mcf ≈ 1.036 MMBtu). Electricity prices: EIA Electric Power Monthly, June 2026. Gas price: EIA residential average for May 2026 as reported by Choose Energy; a low-usage spring month can overstate the winter per-unit price because fixed charges are spread over less gas. Seasonal COP is roughly HSPF2 ÷ 3.412, so an HSPF2 of 10 is about 2.9.
Data visualization
Chart 2: Cost of 1 MMBtu of delivered heat. A COP 3.0 heat pump at 18.34 cents/kWh costs $17.92 versus $20.15 for a 95% furnace at $19.83/Mcf. Source: EIA 2026 prices, our calculation.
Chart key: “Gas $X” = 95% AFUE furnace at $X per Mcf. “HP COP3 / COP2.5” = heat pump at that seasonal COP, priced in cents per kWh. “Resistance” = electric resistance heating.
Chart summary: At the U.S. average electricity price of 18.34¢/kWh, a heat pump with a seasonal COP of 3.0 ($17.92) beats a 95% furnace at $19.83/Mcf ($20.15) but loses to it at $16/Mcf ($16.26). With a lower COP of 2.5, the heat pump only wins where electricity is cheap or gas is expensive. Electric resistance heating is far more expensive than either option in every scenario shown.
Data visualization
Chart 3: Break-even electricity price by gas price. At $16/Mcf gas, a COP 3.0 heat pump breaks even at 16.6¢/kWh. Source: EIA 2026 prices, our calculation (95% AFUE furnace).
Chart summary: If your electricity price is below the break-even value for your gas price and heat pump efficiency, the heat pump is cheaper to run. Rule of thumb: break-even ¢/kWh is about 0.87 × the gas price in $/Mcf at COP 2.5, and about 1.04 × at COP 3.0. Look up both rates on your bill; they vary widely by state and utility. For context, EIA-based data show June 2026 residential electricity ranging from 13.11¢/kWh in Nevada to 34.74¢/kWh in California (excluding Hawaii).
Lifespan, Maintenance, Panels and Ducts: Costs Quotes Often Miss
Lifespan. HomeAdvisor cites 15 to 25 years for a well-maintained gas furnace. Heat pump lifespan varies by climate and maintenance; ask installers for the manufacturer’s warranty terms, as compressors are the costly component.
Maintenance. HomeAdvisor puts annual furnace service at roughly $100–$300. A heat pump also needs annual service, and because it runs for both heating and cooling, it accumulates more run hours than a furnace that sits idle in summer.
Envelope and ducts. DOE reports that 20% to 30% of heated and cooled air is lost to duct leaks in the average home. Sealing ducts and adding insulation lowers the load for either system and can let you install a smaller, cheaper unit. Try the insulation savings calculator.
Thermostat settings. DOE advises thermostats designed for heat pumps, which ramp up slowly to avoid triggering electric resistance backup elements.
🏛️ Incentives
2026 Incentives: The 25C Credit Has Ended, HEEHRA Rebates Remain
Table 4: Federal heat pump incentives, status in 2026
Incentive
What it offered
Status for a 2026 install
25C Energy Efficient Home Improvement Credit
30% of cost, up to $2,000 per year for heat pumps
Ended. Applied only to property placed in service by Dec 31, 2025
HEEHRA rebate, household under 80% AMI
Up to 100% of cost, max $8,000 for a heat pump
Available in participating states
HEEHRA rebate, household 80–150% AMI
50% of cost, max $4,000 for a heat pump
Available in participating states
HEEHRA, household over 150% AMI
Not eligible
Not available
Utility and state rebates
Vary by program
Check your utility and state energy office
Sources: IRS (25C), Alliance to Save Energy, California Energy Commission (HEEHRA tiers), industry trackers. AMI = area median income.
Table summary: The largest change for 2026 is that the tax credit is gone. Many websites, including earlier versions of this guide, still describe a $2,000 credit; that credit does not apply to installs completed after December 31, 2025. What remains is HEEHRA, which is income-tested, administered by each state, and not yet live everywhere. Industry trackers reported roughly two dozen states with active programs by mid-2026, and California’s single-family retrofit funds were fully reserved as of February 24, 2026. Rebates usually flow through approved contractors and often need pre-approval, so confirm eligibility before you sign a contract. Use the rebate estimator as a starting point, then verify with your state energy office.
🧭 Decision Guide
Which Should You Choose? A Decision Guide
Choose a heat pump when your electricity price is below the break-even value for your gas price (Chart 3), you need a new air conditioner anyway, or you qualify for HEEHRA or a utility rebate.
Choose a gas furnace when gas is cheap relative to electricity, your existing AC is in good shape, and no rebate closes the price gap.
Consider dual-fuel in cold climates. DOE recommends cold-climate heat pumps in climate zone 5 and colder. ENERGY STAR cold-climate models are tested at 5°F, and pairing one with a backup heat source is most efficient at even lower temperatures.
Get itemized quotes. Ask installers to separate equipment, ductwork, electrical work, and permits, and to state the seasonal efficiency (HSPF2 or COP) they used in any savings estimate.
It depends on your local prices. As a rule of thumb, a heat pump costs less to run when your electricity price in cents per kWh is below about 0.9 to 1.0 times your gas price in dollars per Mcf (assuming a seasonal COP of 2.5 to 3.0 and a 95% AFUE furnace). At the June 2026 U.S. average of 18.34 cents/kWh, that means gas prices above roughly $17 to $20 per Mcf favor the heat pump. Check both rates on your latest bills.
No. The Section 25C Energy Efficient Home Improvement Credit, which covered 30% of heat pump costs up to $2,000, applied only to property placed in service by December 31, 2025, following the One Big Beautiful Bill Act. In 2026 the main federal incentive is the HEEHRA rebate: up to $8,000 for households under 80% of area median income, or 50% of cost up to $4,000 at 80–150% AMI, delivered through state programs. Utility and state rebates may also apply.
Angi's 2026 data puts a typical gas furnace installation at $2,823 to $6,897 (average $4,814) and a typical heat pump installation at $4,237 to $7,942 (average $6,088). Because a heat pump also provides air conditioning, compare it against a furnace plus a new AC unit if your AC is also near end of life. Panel upgrades (often $1,500 to $4,000) or new ductwork can add to either quote.
Yes, if you choose the right model. ENERGY STAR certifies cold-climate air-source heat pumps by testing performance at 5°F, and the U.S. Department of Energy recommends cold-climate models in climate zone 5 and colder. Below their rated range, many homes pair the heat pump with a backup heat source such as a gas furnace (dual-fuel) or electric resistance strips, which lowers overall efficiency on the coldest days.
Possibly. Some homes with 100-amp service need a subpanel or a 200-amp upgrade, commonly quoted at $1,500 to $4,000. If your home has no existing ducts, new ductwork can cost $2,000 to $12,000, unless you choose a ductless mini-split. A licensed contractor should perform a load calculation and panel inspection before giving a firm quote, so ask for these to be itemized.
Popular state solar guides
Electricity rates and incentives vary — see data for your state.
18.19¢/kWh — US average residential price. Source: EIA Electric Power Monthly, Table 5.6.B (year-to-date through July 2026), residential average retail price (July 2026) (EIA)
Solar production
4.5 peak sun hours/day × 0.82 system derate. Approximate state-average daily solar resource (peak sun hours) based on NREL solar resource data (NSRDB); not location-specific — use NREL PVWatts for an address-level estimate. (NREL PVWatts)
Installed price
$3.00 per watt before incentives. Blended 2026 US residential installed price used by this site; EnergySage marketplace reported about $2.60/W (mid-2026); full-market medians are higher.
Federal tax credit
$0 for homeowner-owned systems installed in 2026 — the 30% §25D credit ended Dec 31, 2025 (IRS)
Net metering
National blend — solar assumed to offset 75% of the bill (87% in full-retail net-metering states, 55–70% elsewhere).
Estimates only — not tax, legal or financial advice. Get at least three installer quotes and confirm incentives with your utility and a tax professional.