Heat Pump vs Furnace: Which Is Cheaper to Run in 2026?

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The furnace is 18 years old, the repair quote just came in, and the HVAC tech asks the question everyone hears now: “Have you thought about a heat pump?” You’d like a straight answer before you spend five figures. Will it keep the family warm in February? And will the bills go up or down?

Short answer: a heat pump is usually cheaper to run than a furnace burning propane, heating oil or electricity, and it cools your home too. Against a modern natural gas furnace with cheap gas, the running costs are close, and your local electricity rate decides it. In very cold places, many homes pair the two in a dual-fuel system.

Here’s how they compare on running cost, cold-weather comfort, up-front price, lifespan, safety and incentives in 2026, and how to tell which one fits your home.

Prices change often. The prices below are what we saw at the maker or a major retailer in October 2026, or installed-cost averages from the named source and year; check the current price and get quotes before you buy.

Heat pump vs furnace at a glance

	Heat pump	Furnace
How it heats	Moves heat from outdoor air (or the ground) into the house using electricity	Burns natural gas, propane or oil, or uses electric resistance coils
Efficiency	Up to 3 units of heat per unit of electricity (ENERGY STAR); less in deep cold	80% to about 98% AFUE for gas; 100% for electric
Cooling	Yes, it’s also your air conditioner	No, needs a separate AC
Cold weather	Output drops as it gets colder; cold-climate models keep heating well below 0°F	Same hot air at any outdoor temperature
Air from the vents	Warm, steady, longer cycles	Hot, in shorter bursts
Typical installed cost	About $14,500 ducted, average (EnergySage, 2026)	Less, if you only replace the furnace; ask for quotes
Lifespan (Carrier)	10–15 years	15–20 years
Combustion in the house	None	Yes (gas, propane, oil): needs venting and a CO alarm

How each one makes heat

A furnace creates heat. A gas, propane or oil furnace burns fuel in a sealed chamber, a heat exchanger passes that heat to the air, and a blower pushes it through your ducts. Its efficiency is rated in AFUE (annual fuel utilization efficiency): an 80% AFUE furnace turns 80% of the fuel’s energy into heat for your home, and the rest goes up the flue. Condensing furnaces recover more heat from the exhaust and reach 95% or more; ENERGY STAR’s northern bar has been 95% AFUE. An electric furnace turns electricity into heat one for one.

A heat pump doesn’t burn anything. It uses an electric compressor and a refrigerant loop to collect heat from outdoor air and release it indoors, the reverse of what an air conditioner does in summer. Because it moves heat rather than making it, ENERGY STAR says it can deliver up to three times more heat energy than the electricity it uses. Our heat pumps guide explains the cycle step by step.

Running cost: which is cheaper to heat with?

This comes down to two things: the price of your fuel and the efficiency of each machine. We worked out what 10 million Btu of delivered heat costs at national-average winter prices from the U.S. Energy Information Administration (January to March 2026). These are our estimates; your utility rates may be very different.

Heating system (efficiency assumed)	Cost per 10 million Btu of heat (our estimate)
Electric furnace or baseboard (100%)	≈$524
Propane furnace, older (80% AFUE)	≈$365
Propane furnace, condensing (95% AFUE)	≈$308
Heat pump, seasonal COP 2.5	≈$210
Gas furnace, older (80% AFUE)	≈$181
Heat pump, seasonal COP 3	≈$175
Gas furnace, condensing (95% AFUE)	≈$152

Prices used: electricity 17.9¢ per kWh, natural gas $15.02 per thousand cubic feet, propane $2.67 a gallon (EIA residential averages). A “seasonal COP” is the average over a whole winter; it’s higher in a mild climate and lower in a cold one.

• Replacing electric resistance heat: a heat pump wins easily. DOE says modern air-source heat pumps can cut electricity use by about 50% compared with electric furnaces and baseboard heaters.
• Replacing propane or oil: a heat pump usually wins. NREL’s 2024 national study found that 92% to 100% of homes heating with electricity, fuel oil or propane (and that already have AC) would save, with median savings of $300 to $650 a year.
• Replacing natural gas: it’s close. At these national prices, a heat pump would need a seasonal COP of about 3.4 to match a 95% gas furnace, and it beats an older 80% furnace only around COP 2.9. Where electricity is cheap or gas is expensive, the heat pump wins; where it’s the other way, the furnace does.

Efficiency matters a lot here. NREL found that minimum-efficiency heat pumps could raise bills in 39% of households, but higher-efficiency models cut that to 5%. If gas is your current fuel, look at high-HSPF2 or cold-climate models, and ask about your utility’s rate: some offer lower winter or electric-heat rates. Our time-of-use rates explainer helps you read your bill.

Comfort and cold weather

A furnace gives the same blast of hot air whether it’s 40°F or -10°F outside. A heat pump’s output falls as the temperature drops: a Pacific Northwest National Laboratory guide explains that standard units lose capacity below the mid-40s, and in the teens deliver only a fraction of their rating. That’s why a standard heat pump in a cold region leans on electric backup strips, which cost as much to run as an electric furnace.

Cold-climate heat pumps change the picture. ENERGY STAR’s cold-climate units must keep at least 70% of their rated heat at 5°F, with a COP of at least 1.75 at that temperature. Some mini splits are rated to keep heating far lower; Senville rates its AURA line down to -22°F. Our guide to the best heat pumps for cold climates lists more.

The feel is different, too. Heat pump air comes out warm rather than hot, and variable-speed units run longer and more steadily. In summer it also dehumidifies, which a furnace can’t.

Up-front cost and lifespan

EnergySage’s 2026 averages from real installer quotes: about $14,529 for a ducted heat pump, $14,353 for a hybrid (heat pump plus furnace) and $25,957 for a whole-home ductless mini split system, all before incentives. Replacing a furnace alone usually costs less, but that’s not a fair comparison if your air conditioner is also near the end: EnergySage puts an AC plus furnace at roughly $11,590 to $14,100, against about $13,527 for a ducted heat pump after incentives. Get quotes for both. See our heat pump cost guide for what drives the price.

Furnaces tend to last longer: Carrier lists 15 to 20 years for furnaces and 10 to 15 for heat pumps, which run all year.

Safety, maintenance and power outages

• Carbon monoxide: gas, propane and oil furnaces burn fuel, so they need proper venting, yearly checks and CO alarms on every level. A heat pump has no combustion.
• Maintenance: both need clean filters and a yearly tune-up. A heat pump’s outdoor unit should be kept clear of snow, ice and leaves.
• Power outages: neither heats without electricity. A gas furnace’s blower and controls need far less power than a heat pump, so they’re easier to run from a portable power station or a small generator. A heat pump needs a home battery or a standby generator sized for it.
• Installation: gas lines, refrigerant lines and 240 V circuits are jobs for a licensed HVAC pro and electrician, with a permit where required.

Dual fuel: why not both?

A dual-fuel (hybrid) system pairs a heat pump with a gas or propane furnace. The heat pump handles cooling and most of the heating; when it gets cold enough that the furnace is cheaper or the heat pump can’t keep up, the thermostat switches to the furnace. It’s a common choice in cold regions, or if your furnace is fairly new and your AC is dying: replace the AC with a heat pump and keep the furnace. A thermostat that supports dual fuel lets you set the switchover temperature.

Incentives in 2026

The federal 25C credit (30%, up to $2,000 for a heat pump, and up to $600 for an efficient furnace) ended for installations after December 31, 2025. What’s left comes from states and utilities. The IRA Home Energy Rebates, including HEAR rebates for heat pumps, are run by state energy offices; DOE says they’re available in select states, and funding can run out (California’s single-family HEAR rebates were fully reserved as of February 24, 2026). Many utilities pay heat pump rebates too. Look up your ZIP code on DSIRE and the ENERGY STAR Rebate Finder, call your utility, and see our home energy rebates guide. Never count on money until it’s confirmed in writing.

Who should choose which?

• Choose a heat pump if you heat with electric resistance, propane or oil; your AC also needs replacing; you live where winters are mild to moderate; or you have or plan solar panels.
• Choose a furnace if you have cheap natural gas, high electricity rates and a working central AC, or you need the simplest, lowest-cost replacement right now.
• Choose dual fuel if you live with long, hard winters and have gas, or your furnace is newer than your air conditioner.
• Add a mini split if you want to keep your furnace but heat and cool one room or addition more cheaply.

Heat pumps and thermostats worth a look

Ducted whole-home heat pumps and furnaces are sold through HVAC contractors, so ask them for model numbers and compare. If you want to start smaller, a mini split for the room you use most can take a big load off the furnace, and the right thermostat matters for any heat pump or dual-fuel setup. We researched these from makers’ specs; we didn’t test them.

1. Senville AURA 24K: best for heating through cold winters

Senville rates the AURA 24K to keep heating down to -22°F, with a maximum heating capacity of 29,000 BTU, 21 SEER2 and 13.5 HSPF2 (Region IV). Senville lists $1,799.99 (October 2026), plus professional installation.

• Good: cold-climate rating, 10-year compressor and 5-year parts warranty, ENERGY STAR.
• Watch out: Senville requires professional installation for the warranty; one head heats one zone.
• Best for: taking a big open living area off the furnace in a cold region.

Check the Senville AURA 24K price on Amazon

2. MRCOOL DIY 5th Gen 12K: best for a do-it-yourself start

A 12,000 BTU, 115V mini split rated 23.5 SEER2 and 10.2 HSPF2 (Region IV), with a 25 ft pre-charged quick-connect line set. MRCOOL says its DIY warranties (7 years compressor, 5 years parts) allow homeowner installation. We saw it at $2,158 on sale at a retailer.

• Good: no refrigerant tools needed; very efficient cooling.
• Watch out: MRCOOL doesn’t state its lowest heating temperature on the pages we read; the circuit to your panel is a job for a licensed electrician.
• Best for: one room or addition in a moderate climate. More in our best DIY mini splits.

Check the MRCOOL DIY 5th Gen price on Amazon

3. ecobee Smart Thermostat Premium: best for dual fuel

ecobee’s top model comes with a SmartSensor for a second room and is ENERGY STAR certified; ecobee listed it at $209.99 on sale (regular $259.99) in October 2026. Reviewers report it handles heat pumps and dual-fuel systems, letting you set when the furnace takes over. Run ecobee’s online compatibility check with your wiring before you buy.

• Good: room sensor included; no subscription needed for heating and cooling.
• Watch out: the optional Smart Security plan is a paid add-on you don’t need.
• Best for: hybrid systems and ducted heat pumps.

Check the ecobee Smart Thermostat Premium price on Amazon

4. Google Nest Learning Thermostat (4th gen): best for set-and-forget

The 2024 Nest Learning Thermostat supports heat pumps, comes with a Nest Temperature Sensor, and needs no subscription. Most homes don’t need a C wire for it; a few need Google’s Nest Power Connector. It launched at a $279.99 list price.

• Good: learns your schedule; extra sensor in the box.
• Watch out: priciest pick here; check Google’s compatibility checker for your system.
• Best for: Google Home households. See our best smart thermostat for a heat pump.

Check the Nest Learning Thermostat price on Amazon

Keep exploring: our heat pumps guide, heat pump vs air conditioner, heat pump cost and best heat pumps for cold climates. For background, see thermal energy and natural gas energy, or browse the heat pumps category.

Heat pump vs furnace questions

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

Sometimes. At national-average winter 2026 prices, we estimate a heat pump needs a seasonal COP of about 3.4 to match a 95% efficient gas furnace, which only efficient units in milder climates reach. Against an older 80% furnace, or where electricity is cheap, a heat pump can win. Compare your own rates per kWh and per therm.

Can a heat pump replace a furnace completely?

Yes, in most U.S. climates, if it’s sized with a proper load calculation. Cold-climate models must keep 70% of their rated heat at 5°F to earn ENERGY STAR’s cold-climate label. Many ducted systems include electric backup strips for the coldest days. In very cold regions, some homes keep the furnace as backup in a dual-fuel setup.

What is the downside of a heat pump vs a furnace?

Output falls in deep cold, and standard units lean on costly backup heat. The air feels warm rather than hot. Up-front costs are often higher, and Carrier puts heat pump lifespans at 10 to 15 years versus 15 to 20 for furnaces, since a heat pump also cools all summer.

Is there a tax credit for a heat pump or furnace in 2026?

No federal one. The 25C credit ended for installations after December 31, 2025. If your system went in during 2025, claim it on your 2025 return. For 2026, check state HEAR rebates, utility rebates, DSIRE and the ENERGY STAR Rebate Finder; amounts and availability differ by state.