Heat Pump vs Gas Furnace Cost: The Running-Cost Math

At 2025 U.S. average prices, an efficient heat pump and a gas furnace cost about the same to heat a home: roughly $16 to $19 for every million Btu of heat delivered, by our calculation from federal data. A minimum-efficiency heat pump costs more than gas at those prices, and electric baseboard heat costs roughly three times as much as gas. Where you live matters more than the national average, because electricity and gas prices vary widely by state.

This guide shows the math with every assumption spelled out, so you can redo it with the prices on your own bills. It compares running costs only, not the price of buying or installing equipment. For what EIA expects heating bills to do this winter, see our winter heating cost forecast.

The Short Answer

Assumptions: 2025 U.S. average residential prices from the U.S. Energy Information Administration (EIA): electricity 17.23 cents per kWh, natural gas $15.34 per thousand cubic feet. Heat content from EIA: 3,412 Btu per kWh, 1,036 Btu per cubic foot of gas. Calculations are ours and are explained below.

One million Btu is a unit of heat. It lets you compare fuels sold in kWh, cubic feet or therms on the same footing.

Step 1: Your Prices

Electricity. EIA’s Electric Power Monthly puts the 2025 U.S. average residential price at 17.23 cents per kWh. The 2026 year-to-date average through August is 18.19 cents (preliminary). If your price is higher, the heat pump numbers rise in proportion.

Natural gas. EIA puts the 2025 U.S. average price of gas delivered to homes at $15.34 per thousand cubic feet (Mcf).

Both are averages: total residential revenue divided by the amount sold, so fixed monthly charges are spread into them. Your best number is from your own bill. Divide the total of the usage-based charges by the kWh or the gas units billed. Our guide to reading your electric bill shows where each charge sits.

Step 2: Each System’s Efficiency

Gas furnaces: AFUE. The Department of Energy (DOE) defines AFUE as “the ratio of the furnace’s or boiler’s annual heat output compared to its total annual fossil fuel energy consumed.” An 80% AFUE furnace turns 80% of the gas’s heat into heat for the house. DOE lists:

• Older, low-efficiency systems: “56% to 70% AFUE”
• Mid-efficiency systems: “80% to 83% AFUE”
• High-efficiency systems: “90% to 98.5% AFUE”

DOE’s appliance standards page lists a federal minimum of 80 AFUE for non-weatherized gas furnaces (other than mobile home furnaces), with compliance from Nov. 19, 2015. DOE also notes that “AFUE doesn’t include the heat losses of the duct system or piping.”

Heat pumps: HSPF2. HSPF2 is the heating seasonal performance factor measured under DOE’s test procedure required since Jan. 1, 2023. It rates heat delivered per unit of electricity over a standard test season, and is commonly expressed as Btu per watt-hour. Split-system heat pumps manufactured since Jan. 1, 2023 must meet at least 7.5 HSPF2 (single-package units 6.7), according to DOE’s 2023 standards FAQ. Many models are rated higher; we use 10 as an example of an efficient unit. Our guide to choosing a heat pump covers HSPF2 and sizing in more detail.

Electric resistance heat (baseboards, electric furnaces, space heaters) turns each kWh into about 3,412 Btu of heat, EIA’s conversion. DOE gives all-electric furnaces an AFUE “between 95% and 100%”; we use 100% here.

Step 3: The Math

Heat pump. One million Btu divided by (HSPF2 × 1,000 Btu per kWh) gives the kWh needed.

• 10 HSPF2: 1,000,000 ÷ 10,000 = 100 kWh. At 17.23 cents, 100 × $0.1723 = $17.23.
• 7.5 HSPF2: 1,000,000 ÷ 7,500 = 133.3 kWh. 133.3 × $0.1723 = $22.97.

Gas furnace. A thousand cubic feet holds about 1.036 million Btu (1,000 × 1,036 Btu, EIA’s factor). So gas at $15.34 per Mcf costs $15.34 ÷ 1.036 = $14.81 per million Btu before furnace losses.

• 80% AFUE: $14.81 ÷ 0.80 = $18.51.
• 95% AFUE: $14.81 ÷ 0.95 = $15.59.

Electric resistance. 1,000,000 ÷ 3,412 = 293.1 kWh. 293.1 × $0.1723 = $50.50.

If your gas bill is in therms, one therm is 100,000 Btu, per EIA. Multiply your price per therm by 10 to get the price per million Btu, then divide by the AFUE.

The Break-Even Electricity Price

Flip the math to find the electricity price at which a heat pump and a furnace cost the same, at the 2025 average gas price:

How we got it: the furnace’s cost per million Btu divided by the heat pump’s kWh per million Btu. For example, $18.51 ÷ 100 kWh = 18.5 cents.

If your electricity costs less than the number in the table, the heat pump is cheaper to run per unit of heat. If your gas is cheaper than $15.34 per Mcf, the break-even prices fall. You can find your state’s average electricity price on its page in our rates by state list.

A Season Example

As an illustration only, take a home that needs 50 million Btu of delivered heat in a winter. That figure is a round example, not an average; homes vary enormously by size, insulation and climate.

Each figure is the cost per million Btu from the table above multiplied by 50, at 2025 U.S. average prices.

The pattern matters more than the dollar amounts. Replacing electric resistance heat with a heat pump cuts heating energy by more than half at rated efficiency. In DOE’s example, the annual savings from an air-source heat pump are “around 3,000 kWh (or $459) when compared to electric resistance heaters.” Replacing gas is closer to a toss-up and depends on your prices.

What the Ratings Don’t Capture

• Cold weather. HSPF2 is a rating from a standard test, not a measurement of your house. Heat pumps lose capacity and efficiency as outdoor temperatures drop, and many use electric resistance backup on the coldest days, which costs far more per unit of heat. DOE says newer air-source heat pumps now offer “a legitimate space heating alternative in colder regions.” If you live somewhere cold, see our guide to cold-climate heat pumps.
• Ducts. AFUE excludes duct losses, and leaky ducts waste heat from either system.
• Fixed charges. If switching lets you close a gas account entirely, you also stop paying the gas utility’s monthly customer charge. If you keep gas for a stove or water heater, you don’t. Our explainer on fixed charges covers how these work on electric bills.
• Rate design. Some utilities offer lower winter or electric-heat rates, and some charge more per kWh at higher usage. Use the price you would actually pay for the extra kWh.
• Cooling. A heat pump also replaces a central air conditioner. This comparison covers heating only.

Where Solar Fits

A heat pump turns heating into electricity use, and solar can offset electricity. A gas furnace’s fuel can’t be offset by panels. That makes a heat pump more attractive for a home with solar and generous net metering, where each kWh produced is credited at close to the retail price.

Two caveats. Panels produce the least in winter, when a heat pump works hardest, so the value depends on whether your utility lets summer credits carry into winter. And adding a heat pump can change how many panels you need: our guide to how many solar panels you need shows how to size for a higher yearly kWh total. To understand the units on a heat pump spec sheet versus your bill, see kW vs kWh.

Limitations

National average prices hide wide state and utility differences, and 2026 electricity prices so far are higher than the 2025 figure we used. Ratings-based estimates assume the equipment performs at its rated efficiency; real-world results depend on climate, installation, ducts and thermostat settings. We did not estimate equipment or installation costs, or any rebates.

Sources and verification