Heat Pump vs Furnace: Operating Cost Comparison
A heat pump typically costs 30 to 50 percent less to run than an electric furnace or baseboard heat, and usually beats a gas furnace too, because it moves heat rather than creating it: a heat pump with a COP of 3 delivers three units of heat per unit of electricity. Gas furnaces win only where gas is very cheap and electricity is very expensive, or in extreme cold without cold-climate equipment.
Installation cost gets the headlines, but operating cost decides what the system costs you over 15 years. The physics favors heat pumps heavily: instead of burning fuel or running resistance coils, a heat pump moves existing heat from outside to inside. This guide walks through the efficiency math, the fuel-price math, and the climates where each system wins.
The efficiency math: COP and HSPF2
A heat pump's efficiency is measured by its coefficient of performance (COP): units of heat delivered per unit of electricity consumed. A typical modern heat pump runs at a COP of 2.5 to 4.0 in normal winter conditions, meaning it delivers 2.5 to 4 units of heat for every unit of electricity. Electric resistance heat (baseboards, electric furnaces) has a COP of exactly 1.0. Gas furnaces are rated by AFUE: a modern condensing furnace hits 95 to 98 percent, or a COP-equivalent of about 0.95.
The seasonal rating you will see on labels is HSPF2 (heating seasonal performance factor). Divide HSPF2 by 3.412 to get the seasonal COP. An HSPF2 of 9.5, a common mid-range figure, equals a seasonal COP of about 2.8. Cold-climate models hold higher COPs at low temperatures, which is why they cost more upfront.
A worked example with 2026 energy prices
Take a home that needs 60 million BTU of heat per winter (a reasonable figure for a 1,800 sq ft home in a moderate climate). At the national average residential electricity price of about $0.17 per kWh and natural gas around $1.40 per therm, here is the seasonal math.
Heat pump (seasonal COP 3.0): 60,000,000 BTU / 3,412 BTU per kWh = 17,584 kWh of heat needed; divided by COP 3.0 = 5,861 kWh of electricity; at $0.17 = $996 per winter.
Gas furnace (95% AFUE): 60,000,000 / 0.95 = 63.2 million BTU of gas = 632 therms; at $1.40 = $885 per winter.
Electric furnace (COP 1.0): 17,584 kWh at $0.17 = $2,989 per winter.
In this example the gas furnace edges the heat pump on operating cost, but the heat pump costs one-third of electric resistance. Change the inputs and the winner changes: at $0.12 electricity the heat pump drops to $703 and wins outright; at $2.00 gas the furnace rises to $1,264 and loses. Your local rates decide, which is why the calculator on this site's homepage asks about your situation rather than giving one answer.
When the furnace wins
Gas furnaces win on operating cost in two situations. First, where natural gas is cheap (under about $1.00 per therm) and electricity is expensive (above about $0.20 per kWh): parts of the Midwest and some regulated gas markets. Second, in extreme cold, where a standard heat pump's COP falls toward 1.5 and backup resistance heat kicks in. Cold-climate heat pumps and dual-fuel hybrids exist precisely to close this gap; a hybrid lets the heat pump run down to about 30 to 35F and hands off to gas below that.
When the heat pump wins
Heat pumps win almost everywhere else. Against electric baseboards, oil, or propane, the savings are dramatic: heating oil at $4 per gallon in an 85%-efficient boiler costs roughly $33 per million BTU, while a COP-3 heat pump at $0.17 electricity costs about $16.60 per million BTU, roughly half. Against gas, heat pumps win wherever electricity is reasonably priced, and they win bigger every year as heat pump efficiency improves. They also cool in summer, which a furnace cannot do, so a heat pump replaces two systems with one.
The 15-year view
Operating savings compound. A heat pump saving $800 a year over an electric furnace saves $12,000 over 15 years, which often exceeds the installation premium. Maintenance costs are similar: both systems want annual service at $150 to $300. Heat pump lifespan runs 12 to 15 years for the outdoor unit; gas furnaces last 15 to 20. Factor replacement timing into the comparison if your furnace is young and your air conditioner is new; sometimes the right move is to wait.
The bottom line
Versus electric heat, oil, or propane, a heat pump almost always wins on operating cost, often by 40 to 60 percent. Versus natural gas, it depends on your local rates: cheap gas and pricey electricity favor the furnace, while moderate electricity prices favor the heat pump. Run your own numbers with local utility rates before deciding, and remember that a heat pump also replaces your air conditioner.
Figures current as of October 2026. Sources: U.S. Department of Energy (energy.gov), ENERGY STAR, IRS guidance on expired 25C credit.