Heating cost by climate and fuel
Yearly heating cost for a 2,000 sq ft home with average insulation, electricity at $0.17/kWh, natural gas at $1.50/therm, propane at $2.80/gallon and heating oil at $3.80/gallon. Heat pump at 8.5 HSPF2; gas and propane furnaces at 96% AFUE, oil at 85%.
| Climate zone | Heat pump | Natural gas | Propane | Heating oil |
|---|---|---|---|---|
| Hot · IECC 1–2 | $410 | $350 | $720 | $730 |
| Warm · IECC 3 | $730 | $600 | $1,220 | $1,230 |
| Mixed · IECC 4 | $1,240 | $970 | $1,970 | $2,000 |
| Cold · IECC 5 | $2,050 | $1,440 | $2,940 | $2,970 |
| Very cold · IECC 6–7 | $2,960 | $1,850 | $3,780 | $3,830 |
At these national-average prices, natural gas is cheaper to heat with than a heat pump in every climate, while a heat pump costs about 20–45% less than propane or heating oil (the gap narrows in the coldest zones). Your own prices can change the result in either direction, so use the figures from your bills.
Break-even electricity price
A heat pump is cheaper to run than a 96% AFUE gas furnace when your electricity costs less than these prices, with gas at $1.50/therm and an 8.5 HSPF2 heat pump.
| Climate zone | Seasonal COP | Break-even electricity |
|---|---|---|
| Hot · IECC 1–2 | 2.74 | 14.6¢/kWh |
| Warm · IECC 3 | 2.62 | 14.0¢/kWh |
| Mixed · IECC 4 | 2.49 | 13.3¢/kWh |
| Cold · IECC 5 | 2.24 | 11.9¢/kWh |
| Very cold · IECC 6–7 | 1.99 | 10.6¢/kWh |
Many utilities offer lower winter or heat pump rates, which can move a home below the break-even line. Check your utility's rate options before you compare.
How the comparison works
- Yearly heat demand. The calculator estimates your home's heat loss per degree of temperature difference, then multiplies it by the heating degree days typical for your climate zone (1,200 in hot zones up to 8,000 in very cold zones) with a 0.65 correction for internal and solar gains.
- Heat pump energy. HSPF2 is converted to a seasonal coefficient of performance (COP = HSPF2 ÷ 3.412), then adjusted for climate: 10% better in hot zones and 20% worse in very cold zones, where backup heat runs more often.
- Furnace fuel. Heat demand is divided by AFUE and the heat content of the fuel: 100,000 BTU per therm of natural gas, 91,500 BTU per gallon of propane and 138,500 BTU per gallon of heating oil.
- Installed cost. Both systems are priced with the same model as our HVAC replacement cost calculator, adjusted for your state. Cooling costs are left out because a heat pump and a central AC of the same efficiency use the same electricity in summer.
Factors beyond the bill
- One system instead of two. A heat pump heats and cools, so you replace one outdoor unit instead of an AC and a furnace.
- Gas service charge. If a heat pump lets you disconnect gas entirely, you also save the monthly gas meter fee, often $10–$25.
- Comfort. Heat pumps deliver warm air at a lower temperature for longer periods. Some people notice the cooler supply air.
- Cold snaps. In very cold climates, a dual-fuel system with a heat pump and gas furnace gives the lowest cost of both.
- Rebates. State and utility heat pump rebates can cut the installed price by $1,000 or more.
Frequently asked questions
Is a heat pump cheaper to run than a gas furnace?
It depends on your energy prices. At U.S. average prices of about $0.17/kWh and $1.50/therm, a high-efficiency gas furnace usually costs less to run. Where electricity is below about 13¢/kWh, or gas is above about $2/therm, a heat pump often wins.
Is a heat pump cheaper than propane or oil heat?
Usually yes. At average prices, a heat pump costs about 20–45% less to run than a propane or oil furnace, with the biggest savings in milder climates.
How much does it cost to run a heat pump in winter?
For a 2,000 sq ft home with average insulation at $0.17/kWh, about $730 a year in a warm climate, $1,240 in a mixed climate and $2,050 in a cold climate.
Do heat pumps work in cold climates?
Yes. Cold-climate heat pumps keep most of their capacity at 5 °F. Efficiency drops as it gets colder, which the calculator accounts for with a lower seasonal COP in cold zones.
What is dual fuel?
A dual-fuel system pairs a heat pump with a gas furnace. The heat pump runs in mild weather and the furnace takes over when it is cold enough that gas becomes cheaper.
Results are estimates. Actual costs depend on your home, thermostat settings, local weather and energy rates.