Heat Pump vs Furnace: Which Costs Less to Run?

By Ray Bennett · Updated 2 October 2026 · 5 min read · Checked against the sources at the end

Heat Pump vs Furnace: Which Costs Less to Run?

Short answer

It depends on your prices and your winters. A furnace burns fuel and only heats. A heat pump moves heat in on electricity, cools in summer too, and Trane says it can be up to 300 percent efficient. To compare running costs, price 100,000 BTU of heat from your own bills: the gas price per therm divided by the AFUE, against 29.3 times the price per kWh divided by the COP.

Heat pump vs furnace comes down to three things, Carrier says: your climate, the energy sources you can get, and what you need heated and cooled. A furnace burns fuel to make heat. A heat pump uses electricity to move heat in from outside, and in summer it works the other way round as an air conditioner.

Neither one is cheaper everywhere. Carrier says the running cost depends on energy prices, the climate, the efficiency of the equipment and how long it runs. This page lays out the differences, then gives the sum to compare the two with the prices on your own bills.

Before you start

What to carry: your latest gas and electric bills, a pen, and a torch to read the furnace’s plate for its AFUE. Twenty minutes.

Gas or electric? That is the choice this page is about. Carrier says most furnaces in the United States burn natural gas, with propane, oil and electric furnaces as the other options. A heat pump runs on electricity. Comparing it with a plain air conditioner instead: heat pump vs air conditioner.

Find your two prices. The price per therm on the gas bill and the price per kilowatt hour on the electric bill, including any delivery charges billed per unit.

What the makers are clear about. The rating alone does not set the bill. Carrier says a heat pump’s running cost depends on electricity rates, climate, efficiency and runtime, and a furnace’s on fuel prices, its AFUE, climate and runtime.

A furnace needs an air conditioner too. Carrier says furnaces only heat and need a separate system for summer cooling, while a heat pump does both.

Gas has to reach the house. Trane says a furnace needs access to natural gas or propane, and that bringing gas to a house that has none drives up the installation cost.

How they compare

The two machines side by side, in Carrier's and Trane's own figures. Where the two makers differ, both are shown.

	Heat pump	Gas furnace
How it heats	Moves heat with electricity and refrigerant	Burns fuel
Cooling	Yes, the same system	No, it needs an air conditioner
Efficiency	Up to 300 percent, Trane says	80 to 95 percent, Trane; up to 98.5 percent AFUE, Carrier’s best
Life	About 15 years, Trane; 10 to 15, Carrier	More than 20, Trane; 15 to 20, Carrier
Coldest weather	Depends on the model	Built for long cold spells, Carrier says

The sum for your own prices

What 100,000 BTU of heat costs you each way. Put in the prices from your own bills. The constants come from the U.S. Energy Information Administration.

Check 1Free, twenty minutes

Price 100,000 BTU of heat each way

The constants. The Energy Information Administration gives 1 kilowatt hour as 3,412 BTU, 1 therm as 100,000 BTU and 1 gallon of propane as 91,452 BTU. So 100,000 BTU is 29.3 kilowatt hours of electricity, one therm of gas or 1.09 gallons of propane.

A gas furnace. Divide your price per therm by the AFUE: 0.95 for a 95 percent furnace.

A heat pump. Multiply 29.3 by your price per kilowatt hour and divide by the COP. At a COP of 3, the heat pump needs about 9.8 kilowatt hours for what an electric furnace does with 29.3.

Use a colder COP for winter. The COP falls as it gets colder. Trane says up to 300 percent, a COP of 3, in the right conditions, and ENERGY STAR’s cold climate floor is a COP of 1.75 at 5°F. Work the sum at both to see the range.

Dual fuel, the one in between

Check 2Free to ask

Consider a heat pump and a furnace together

How it works. Trane says a dual fuel system runs the heat pump in milder weather and switches to the gas furnace as it gets colder, below freezing for a standard heat pump and below 5°F for its low-profile cold climate models.

Why. Carrier says dual fuel uses the outdoor temperature to pick the most efficient source. Its Greenspeed heat pumps can run down to -15°F before handing over to the furnace.

Who it suits. A Trane product manager calls it a smart choice for homes with colder winters and changing temperatures, balancing efficiency and comfort.

Which fits which house

Check 3

Match the system to the house

A heat pump. Carrier says it fits homes where one electric system for heating and cooling makes sense, and that its cold climate models now reach down to -23°F: how cold is too cold for a heat pump.

A gas furnace. Carrier says it fits homes with natural gas or another furnace fuel and a need for dedicated heating, and remains common where cold weather lasts.

An electric furnace. Carrier says it can be used where there is no gas, but it generally uses more electricity than a heat pump for the same heat. Trane quotes the Department of Energy: a heat pump cuts electricity for heating by about 75 percent against electric furnaces or baseboard heat.

Replacing an old one. The age and the repair matter as much as the fuel: repair or replace.

Questions people ask

Is a heat pump cheaper to run than a gas furnace?

It depends on your gas and electricity prices and your winters. Work out what 100,000 BTU costs each way from your own bills, using a lower COP for the coldest months.

How efficient is a heat pump compared to a furnace?

Trane says a heat pump can be up to 300 percent efficient because it moves heat rather than burning fuel. Trane puts furnaces at about 80 to 95 percent, and Carrier’s best reaches 98.5 percent AFUE.

Which lasts longer, a heat pump or a furnace?

A furnace. Carrier says about 15 to 20 years for a furnace and 10 to 15 for a heat pump. Trane says more than 20 and about 15, because a heat pump runs all year.

Can a heat pump replace a furnace in a cold climate?

A cold climate model can, Carrier says, and many homeowners in cold regions have done it. Dual fuel keeps a furnace as backup for the coldest days.

What is a dual fuel system?

A heat pump and a gas furnace together. Trane says the heat pump does most of the heating and the furnace takes over as the outdoor temperature drops.

What does AFUE mean?

Annual Fuel Utilization Efficiency, a furnace’s efficiency rating in percent. Carrier’s Infinity 98 reaches up to 98.5 percent.

Sources: Carrier "Heat Pump vs Furnace: Which System is Right for You?", Trane "Heat Pump vs. Furnace: Which Heating System Is Right For You?" and "What Is a Dual Fuel Heat Pump System?", Carrier "Cold Climate Heat Pump Systems", the U.S. Energy Information Administration "British thermal units (Btu)", and the ENERGY STAR Version 6.2 Central Air Conditioner and Heat Pump specification