Heat Pump vs Furnace: Which Costs Less to Install and Run?
by the Berry team · Updated
A gas furnace usually costs less to install, while a heat pump costs more upfront but also replaces the air conditioner and can cost less to run, depending on your local electricity and gas prices and how cold your winters get. In mild to moderate climates a heat pump is often the better long-term value, and in very cold places with cheap gas a furnace, or a heat pump paired with one, often wins.
Typical installed costs
Ranges are typical US prices for a whole-home system replacing existing equipment with ductwork already in place. Size, efficiency, brand, and local labor move these a lot. Get at least two or three quotes.
| System | What you get | DIY cost | Pro cost |
|---|---|---|---|
| Gas furnace only | Heating only. You still need a separate AC for cooling. Assumes a gas line is already there. | DIYNot a DIY job | Pro$3,000-$7,000, more for high efficiency models |
| Gas furnace plus central AC | The common pairing in many homes. Replacing both at once is often cheaper than separately. | DIYNot a DIY job | Pro$7,000-$14,000 |
| Ducted heat pump with air handler | Heating and cooling in one system, with electric backup heat strips for the coldest days. | DIYNot a DIY job | Pro$6,000-$14,000, more for cold-climate models |
| Dual fuel: heat pump plus gas furnace | The heat pump handles most heating and cooling, and the furnace takes over in deep cold. | DIYNot a DIY job | Pro$8,000-$16,000 |
| Ductless mini-split heat pump | For homes without ducts, additions, or single rooms. Priced per zone. | DIYNot recommended | Pro$3,000-$8,000 for one zone, more for several |
Ranges are typical US prices and vary with your region, your home, and the season. A pro quote for your exact job beats any range.
How each one makes heat
A furnace burns gas, or sometimes propane or oil, to make heat. A modern high efficiency furnace turns most of its fuel into heat for the house. A heat pump does not make heat. It moves it, pulling heat from outdoor air and pushing it inside, the same way an AC moves heat out in summer. Because it is moving heat rather than making it, a heat pump can deliver two to four times as much heat as the electricity it uses in mild weather.
The catch is that a heat pump gets less efficient as it gets colder outside, and older or standard models lean on electric backup heat strips in deep cold. Those strips are much more expensive to run. Cold-climate heat pumps hold their efficiency far better at low temperatures, and they are the reason heat pumps now work in places they used to struggle.
What drives the monthly bill
- Your local electricity and gas prices. This is the biggest factor, and it varies widely by region and utility. Cheap gas and expensive electricity favor a furnace. The reverse favors a heat pump.
- How cold your winters are. Mild winters keep a heat pump in its most efficient range. Long stretches well below freezing push it toward backup heat unless it is a cold-climate model.
- Whether you need cooling anyway. A heat pump is also your AC. If you would be replacing the AC either way, the price gap shrinks a lot.
- How the system is set up. A heat pump with a thermostat that calls for backup heat too eagerly can cost much more to run than it should. Correct thermostat settings matter.
- Your house. Air leaks, thin attic insulation, and leaky ducts raise the bill for any system. Sealing those can matter more than the equipment choice.
Which one fits where you live
Climate section
If you have mild or moderate winters
Much of the South and the Pacific coast, and places like Nashville with occasional hard freezes.
A heat pump is often the default choice. It handles most winter days efficiently and replaces the AC in the same install.
Backup heat covers the rare deep cold. Electric strips or a small furnace take over on the handful of nights it is needed.
Climate section
If you get long, hard freezes
The upper Midwest, the Northeast, and the mountains.
Look at cold-climate heat pumps. Ask for models rated to keep heating well at low temperatures, and ask to see their performance at your typical winter lows.
Consider dual fuel. A heat pump for most of the year and a gas furnace for deep cold is a common compromise if you already have gas service.
A furnace still makes sense with cheap gas. If gas is inexpensive where you are and the AC is fairly new, replacing only the furnace can be the better value.
Climate section
If you do not have gas service
A heat pump is usually the clear choice. Compared to electric resistance heat, baseboard heaters, or propane, a heat pump typically costs much less to run.
How long each one lasts
Gas furnaces often last somewhere around 15 to 20 years. Heat pumps and central ACs often last around 10 to 15 years, since they run in both summer and winter. Maintenance moves both numbers. Whatever you choose, a yearly tune-up, regular filter changes, and keeping the outdoor unit clear of leaves and snow are what get you to the long end of the range.
If you already have a heat pump and it is not keeping up in cold weather, the issue may be settings or airflow rather than the equipment, and the HVAC hub covers the basic upkeep. If you have a furnace that keeps turning on and off, see why a furnace short cycles before deciding it needs replacing.
When to call a pro
- Your furnace or AC is near the end of its typical life and needs an expensive repair.
- You are replacing one half of a furnace and AC pair and want to know whether to replace both, or switch to a heat pump.
- You want a cold-climate heat pump or dual fuel system. Ask for a load calculation, not a size based on the old equipment.
- Your heat pump runs backup heat often, and your winter electric bill is much higher than expected.
What makes it worse if you wait
- Replacing a system after it fails, in the middle of winter or summer, usually means taking the first quote available instead of comparing options.
- Paying for a large repair on a system near the end of its life can mean paying again when it is replaced a year or two later.
- A heat pump with poorly set backup heat can quietly cost far more to run every winter until someone fixes the settings.
Common questions
Is a heat pump cheaper to run than a gas furnace?
It depends on your local electricity and gas prices and your climate. In mild and moderate climates, a heat pump is often cheaper to run, and it also handles cooling. In very cold areas with inexpensive gas, a furnace or dual fuel setup is often cheaper in winter.
How much does a heat pump cost compared to a furnace?
A gas furnace alone often runs $3,000-$7,000 installed. A ducted heat pump with an air handler often runs $6,000-$14,000, but it replaces both the furnace and the AC. Compared to a furnace plus central AC, at roughly $7,000-$14,000, the gap is often small.
Do heat pumps work in cold weather?
Yes, but standard models lose efficiency in deep cold and lean on electric backup heat, which costs more to run. Cold-climate heat pumps keep heating efficiently at much lower temperatures. In very cold areas, ask for performance data at your typical winter lows.
What is a dual fuel system?
A dual fuel system pairs a heat pump with a gas furnace. The heat pump handles cooling and most heating, and the furnace takes over when it gets cold enough that gas is the cheaper or more comfortable option.
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Keep reading
- How Do You Clean and Maintain a Mini-Split?How to clean a ductless mini-split filter, how often, when the indoor unit needs a professional deep cleaning, and what mini-split service costs.
- Why Does My Furnace Keep Turning On and Off?Why a furnace turns on and off every few minutes, what to check yourself, and what flame sensor, limit switch, and other repairs cost DIY vs pro.
- Why Is My Thermostat Screen Blank?Why a thermostat screen goes blank, the five-minute checks that fix most cases, and what fuses, float switches, and thermostat replacements cost.
- HVAC Maintenance: What to Do, How Often, and What It CostsThe full HVAC guide hub.